ChinaTravelNews - Chinese OTA LY.com has announced it will set up a joint venture with Japanese tour operator HIS. The new company will focus on consolidating and procuring local tourism resources in Japan in order to become a supplier of overseas destinations resources for LY.com.
LY.com and HIS JV to enrich local resource procurement for products targeting Chinese
LY.com’s CEO Zhixiang Wu said its partnership with HIS is extremely important for its outbound tourism industry distribution and is yet another significant advancement in the cooperation between Chinese OTAs and overseas tour operators.
Japan-based HIS was established in December 1980 with registered capital equivalent to RMB580 million. It is presently the second largest tour operator in Japan and is listed with an estimated market value equivalent to RMB15 billion. It started out by offering discount air tickets and now has an extensive range of subsidiaries – 66 tourism-related, 13 in transportation, seven in insurance, four in hotel and four theme park-related. It has reported steady annual growth in revenue and net profit for the past three years.
The Japan market that HIS operates in provides plenty of development opportunities, as statistics show the number of Chinese visitors to Japan grew 84% y-o-y from 1.31 million in 2013 to 2.41 million in 2014, and the number is expected to go up by 87% this year to reach around 4.5 million. “LY.com is the third largest OTA in China. We send a significant number of travelers abroad, and we are extremely optimistic about the Japanese market,” the company said.
The joint venture will concentrate on improving the quality of operations in Japan and enriching local resources through procurement. Meanwhile, the new company will consolidate local resources in Japan and strengthen links with Japanese land operators and hotels to ensure quality service for tour groups and independent travelers.
One industry observer thinks that LY.com can leverage the joint venture to enrich its destination offerings and better understand customer needs in the area of resources. LY.com can offer users more reliable and better quality trips by addressing the fundamental issues facing travelers in the entire outbound travel service process.
LY.com has also stepped up its emphasis in word-of-mouth from marketing to management and is devoting its energies and a large amount of capital to creating quality tourism products in the third quarter. The initiatives include a line of luxury products dubbed “Out-of-the-ordinary Trips Abroad”. The first trip in the series is “Out-of-the-ordinary Hong Kong”, featuring an itinerary with hotels and attractions personally selected by the director of hit comedy “Lost in Hong Kong”, Zheng Xu, to show Chinese tourists a different Hong Kong.
LY.com said: “We will be able to offer our users traveling overseas a more convenient way to purchase products and a greater variety of choices by enriching our destination offerings. This in turn will improve our word-of-mouth reputation and customer retention as well as create an ideal environment to encourage more purchases and higher spending.”
LY.com certainly isn’t stopping at its partnership with HIS. It will be looking for more opportunities to acquire hotels and other destination resources in Japan.(Translation by David)