Asiatravel.com Holdings Ltd - MANAGEMENT REPLY: Can TripAdvisor's instant booking feature boost revenue?

21/11/2014 – Leisure and business travel service provider, Asiatravel.com Holdings Ltd, says it is confident that participating in TripAdvisor's instant booking feature will boost its bookings by monetizing its 140,000 global hotel inventory.

Executive Chairman Boh Tuang Poh says it is the first online travel agency in the Asia Pacific region to use the feature.

Senior Vice President of TripAdvisor, Adam Medros, says the instant booking feature will remove 'friction' from the booking process and benefits AsiaTravel.com by improving downstream conversion.

Meanwhile, AsiaTravel.com sold 40 mln shares to a Chinese firm, ZhongHong Holding Co Ltd for S$9.6 mln in October.

It intends to use the net proceeds for general working capital purposes.

AsiaTravel.com says it believes the synergy with the theme parks and malls developer will benefit stakeholders of both companies.

Investor Central. Asian insights for global investors. We ask the tough questions of Asian companies which global investors need answers to.

Question

1. Can TripAdvisor's instant booking feature boost revenue?

AsiaTravel.com believes this partnership will boost its bookings as it will utilize its 140,000 global hotel inventory.

But we would like to know the positive impact on revenue from this relationship with TripAdvisor?

Q3 revenue improved 4.6% to S$22.9 mln but it made a loss of S$2.5 mln in Q3 FY14, wider than the loss of S$1.2 mln in the previous year.

Management Reply: Our decision to participate on TripAdvisor is strategic; firstly to expose Asiatravel.com, invite first time bookers and then secure repeat usage. It’s an investment that will generate returns over a certain period.

Question

2. What are the terms of commissions paid to TripAdvisor?

Currently, Asiatravel is working with TripAdvisor on a cost per click model (CPC) for hotels within Asia.

With the commission based model of instant booking, Asiatravel says it is confident it can expand the number of hotels available beyond Asia on the TripAdvisor site.

But the company did not disclose any details about the commission arrangement.

Management Reply: Commissions are confidential information but the commission model pays on transactions which we believe is more viable than a CPC or advertising model.

(Read the full story to get all 5 questions)

We thank Fred Seow, Vice President - Marketing & B2B, for his response.

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