However, the solemn fact remains that few foreign travel outfits have actually been successful in China, especially online. Just ask Expedia about how its China acquisition eLong is doing… Despite being the country’s number two OTA, eLong is still struggling with profitability given its huge marketing expenses. To be fair, foreign web companies have a difficult stand in China in general, and Expedia is in good company with businesses like Google and eBay – both struggling to gain market share. Nonetheless, Expedia’s or rather Tripadvisor’s latest foray into China with its platform daodao.com may actually have a good shot of succeeding, but it’s still too early to tell.

Overall, when talking about travel in China, there are 3 main market segments:

1. Inbound travel
2. Domestic travel
3. Outbound travel

Previously, all market segments were dominated by (formerly) state-owned travel agencies such as CTS or CITS, both due to regulations and learning-by-doing expertise. Inbound travel is probably the market area that is the most competitive with foreign companies such as Gray Line being quite successful here. However, because of high market fragmentation and low entry barriers, this is not a market with large opportunities to be reaped.

The domestic market, despite being fairly open, is dominated by local players given their expertise about local consumer behavior and their ability to adapt quickly to changing market conditions. Foreign companies have little competitive advantage here except for their financial clout (see Expedia) and technological edge (which is eroding quickly).

That leaves the outbound market, which has been the most regulated market segment due to fear of unlawful emigration. However, regulations have changed recently and now foreign companies are allowed to offer outbound services to Chinese customers without going through the hassle of finding a Chinese partner with a valid and costly license. Given Chinese traveler’s interest in traveling abroad, this is without doubt the new big opportunity for suppliers of destination activities around the world (think of a Chinese couple booking a Venice gondola ride). And, of course, we at GetYourGuide strive to be at the forefront of it all.

The Chinese travel market is huge. Domestic travel takes the lion’s share of the market with over 1 billion travelers per year although inbound travel with 50 million travelers in 2006 (WTO) and outbound travel with 41 million travelers in 2007 (ChinaContact Outbound Travel Handbook) are no slouch either. The WTO predicts that by 2020, China will become the biggest travel reception country and fourth largest outbound travel country in the world. Inbound travel is favoured by the government because it brings in foreign exchange.

There is huge potential for online travel but also barriers. According to Web 2.0 Travel Tools the Chinese online travel market, valued at US$204 million and growing at a breathtaking speed (72% in 2006), is still puny compared to the American market (US$83 billion in 2006). The biggest obstacle seems to be online payment as Chinese are still wary about online transactions and the use of credit cards. This, however, should change over time as both consumer perceptions changes and Alipay, the Chinese version of PayPal, is becoming more and more widespread. We also noticed that Chinese still like to use the phone. Pretty ladies with phone receivers in their hands take up the best real estate on most Chinese travel websites. It says something if Ctrip, the leading online travel giant in China with over fifty percent market share, also operates the largest call center in Asia’s travel industry. Not surprisingly, the most common form of booking a trip in China is still via calling a local travel agent.

Chinese are bargain hunters. Two of the most successful online travel sites are vertical search engines akin to Kayak: Kuxun and Qunar (Chinese for “Where to”). The latter even boasts cool features such as tracking and predicting prices over time.

Adding a social touch. China Web 2.0 Review compared a few travel 2.0 websites last year and it seems that there is still huge potential for travel websites with a social touch in China. In the meantime, online forums still dominate the internet landscape. 

Western companies don’t have it easy here. There are licenses for everything and in most cases cooperation with local partners is mandatory for success. We also noticed that marketing strategies which may work abroad, may not necessarily work in China. After pretty much botching a campus promotion campaign at several Beijing universities, we went back to the drawing board and came up with other promotion measures that would most certainly fail in Europe. But we are consoling ourselves that even Google is having a hard time here.

Tens of billions of dollars have been spent, hundreds of thousands of police, soldiers and volunteers have been mobilised, and more than 4 billion people are expected to follow the Olympics on TV. With an event of such magnitudes coming up, let’s take a look at some of the other superlatives surrounding the Beijing Olympics so far.

Most surprising: Olympic village facilities. There are many things to love about China but clean facilities is not usually one of them. Surely, the authorities gave their all but to hear statements such as “best Olympic village I have visited” from Norbert Littkopf, a six-time Olympic Games attendee and coach of the German female judo team, is still positively surprising.

Most problematic: Weather and environment. Be it the terrible heat or the still-not-so-great air quality, athletes are going to have a hard time beating world records under these conditions. Despite adding more and long overdue subway lanes and implementing an odd/even faceplate rule for cars, there are still too many cars on the road.

Biggest fear: Rain on the day of the opening ceremony. Despite sophisticated chemical gadgetry to prevent rainfall one can’t help but to imagine the disastrous consequences a major downpour would have on the multi-million dollar publicity event directed by movie director Zhang Yimou (Raise the Red Lantern, To Live, Hero).

Under most pressure: Liu Xiang. Nowadays you can’t walk 100m in Beijing without seeing the face of 2004 Athens man’s 110m hurdles winner and the bearer of the hope of an entire nation. For a country without a single Olympic track and field gold medal until 2004, Liu Xiang was a first. Add the two facts that his world record was just beaten this year by Cuban national Dayron Robles (12.87s) and that Li Xiang himself has failed to break 13 seconds this year, you probably wouldn’t want to be in his shoes right now. Fortunately, he’s not only fast but also a smart guy: he doesn’t read the news and when interviewed about his goals for the Games, he said he just wants to “have some fun.”

Most disappointing: Inbound travel. Tight visa regulations have caused a lack of foreign travelers. This has forced hotels and tour operators to bring prices back to sane levels.

Most innovative: Style guides. Chinese are not famous for their sense of aesthetics, so this latest action by the Chinese government to distribute an etiquette and style guide to over 4 million Chinese households is both innovative and, most likely, futile.

Most cheesy: Chinese flags on cars. A friend of mine derived a simple rule of thumb: the cheaper the car, the more eye-catching the flag will be. Whether that is due to a correlation of income level and nationalistic fervour, or merely for decorative reasons, I do not know.

Most hopeful: Sports. Now that the political and journalistic overtures are coming to a close, I hope the Olympics Games will finally shift its focus towards its original purpose, the celebration of sports. And lucky me who got tickets for the track and field finals.

The Beijing Olympics are coming up in August. With thousands of travelers flocking to Beijing this summer, we want to use this opportunity to spread GetYourGuide in cities like Beijing, Shanghai and other Chinese cities.

Back in 2007 we traveled to China ourselves and experienced first hand how local guides could make traveling easier and more fun. Therefore we are very excited about coming back to China and creating our presence here.

Exactly one month before the start of the Olympics and with the help of our Beijing team, we have launched an online competition for the best tour in China. We have also started contacting local guides and agencies in various Chinese cities. With all this activity, we’re looking forward to a very exciting summer!

after a longer break in the Blog, we are all back now. As you can see on the GYG website we have been coding and constructing quite a lot in the past. Currently we are recruiting guides to our plattform and try to improve our design and usability. Promotion in China has also come off the ground (you can see GetYourGuide is even translated into Chinese by now), so there is a lot of things going on.

But most important of all: Euro 2008 is only less than a week away and we are all SO excited. In fact we have programmed a little Facebook application that we think you will like. It is called Euro 2008 Your Bet and you can place bets on every game and compare your result with your friends. FUN! The golden rule is that everyone at GetYourGuide has to bet and the worst bet has to pay the beer for the next day :-)

In terms of who is going to win, I think this is all crystall clear by now. Even the Austrian railroad figured it out and they are usually quite late at getting things done…