Priceline Launches Online Asian Travel Venture

HONG KONG— Aiming to cash in on Asias undeveloped online travel market, Priceline.com has launched its name-your-own-price air and hotel booking service in Hong Kong, backed by the financial muscle of the regions richest businessman, Li Ka-shing. The joint venture between Lis Hutchison Whampoa Ltd and Priceline.com said it has signed up 25 airlines and 8,000 hotels to sell seats and rooms via priceline.com.hk. But with many local consumers reluctant to buy online, and a growing list of failed online retailers casting a long shadow, the venture will also operate a call center to take bids on airline tickets and hotel rooms over the telephone. In a recent survey by ACNielsen eRatings, Hong Kong Internet users grew 24% to 1.8 million last year out of a population of nearly seven million. But only 4% of local Internet users had actually shopped online, compared with 12% in South Korea, 14% in Australia and 9% in Singapore. But Priceline is betting that in Hong Kong, where shopping and haggling over price is the citys favorite pastime, local consumers will be attracted by the prospect of a bargain. “We will offer significant savings to consumers, up to 20 to 30%,” said Alfredo Gangotena, Hutchison-Priceline chief executive. Hutchison Group Managing director Canning Fok said the new company, 65% owned by the conglomerate and 35% by Priceline.com, had set a goal to break even within two years. Fok added that Hutchison had invested about US$20 million in the venture. SOURCE: Reuters