Japan Travel Trade Weekly News
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Japanese travel and tourism industries.
News consolidated by Travel Vision, Inc. updated every week.
Rakuten Travel Moves from Accommodation Sales to Total Travel
Arrangements; President Okatake Poised to Compete with Real Stores
Mid-February, 2008
At the Rakuten Travel's New Year Conference on February 12,
President Masashi Okatake spoke proudly, "The number of customers who
bought accommodation from us in 2007 became equivalent to 85 percent
of those handled by JTB and is expected to reach its 96 percent level
in 2008, that is, 24 million people. This means we will take No. 4
place following JTB, Kinki Nippon Tourist, and Nippon Travel Agency."
He admitted, however, that his company is much inferior in group
sales to these leading agencies and pledged to compete with their
"real stores." The company's strategies from now are directed to the
objectives of (1) total travel arrangements, (2) output of highly
valued services, and (3) multiple sales channels.
The Dynamic Package "ANA-Raku Pack," for instance, is currently
sold in a form of simple combination of air ticket and hotel, but
Okatake wants the system to be capable of incorporating transfer
service to and from airports, rental car arrangement, and tour escort
service so that it can rival the standard package tours sold in the
market. Sales staff are already working along these lines, eyeing
creation of necessary database by the end of this year and, if
possible, launching the new system within a year.
The company's sales target for 2008 is set for a 30 percent
growth over 2007, and the results of January and February seem to
outpace the target.
With regard to the room inventory, the company changed its policy
three years ago so as to give a purchase guarantee to suppliers at
peak seasons instead of buying rooms on consumption basis.
This change was made because the space for the seasons of high
demand is often allocated to other major travel agencies than Rakuten
despite the fact its share is steadily going up throughout the year;
so Rakuten decided to take risks and buy them up so that its supply
is ensured for any time of the year for the benefit of customers. The
company assigned the purchasing job to the staff called Internet
Travel Consultant (ITC) and they will increase buying of rooms at
facilities that are gaining popularity.
Rakuten, being in the process of developing new features of
products, tries to promote these features to produce bigger sales. In
addition, it is going to increase ITC staff from 87 members to 113 to
reinforce business relations with suppliers.
Regarding sales channels, new channels such as car navigation
system and mobile phone are already in place. Moreover, the company
is setting up a call center, expecting it to become another main
track of business transactions after personal computer and mobile
phone.
In fact, Mr. Okatake say, Expedia has a workforce of 2,000 at its
call center and gets 60 percent of leisure-related bookings via call
center. So he hopes to make 10 percent of Rakuten's total business
through call center operation by providing group travel arrangement
capability and concierge-like functions.
* Rakuten to Incorporate Thai Company in March, to Seek Opportunities
for Korea-based Travel to China and Business inside China
Rakuten is going to set up a subsidiary company in Thailand in
March, making it a base for the ITC members' activities. At Thai
hotels, the staff in charge of room allocation change so frequently
that it felt the need to have the base in the country to ensure
stable sourcing.
It already has subsidiaries in Korea, China, and Guam. The one in
Korea is now engaged in tourism between Japan and Korea, and is
planning to promote traffic between Korea and China in the future. In
China, overseas travel is not fully liberalized yet, so the company
also seeks business opportunities in domestic travel there for the
time being. It is trying further to tap the Philippine and other
Southeast markets where many Japanese travelers come and go.
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