5 years ago

Deregulation of the air distribution in China and how agents can capitalise

NB: This is a guest article by Jack Zhai, chairman of Abacus China.

Today’s travel agency environment is both dynamic and turbulent.

The recent deregulation instituted by the Civil Aviation Administration of China (CAAC) now allows other GDSs into the market, and may be the right first step in a series of anticipated changes in the Chinese travel market to benefit key industry players including travel agents.

[Here is what it means for airlines and others]

In a changing and perhaps vulnerable time, agents must keep their heads afloat and look to adapt their methods of doing business with airlines and distribution partners to deliver the best products and services for their customers, the traveller.

The current Chinese agency market is at the moment highly fragmented and dominated by regional players.

With the deregulation, local players can expect greater support to bring the standard of retail travel technology practices up to par with the global market to better deliver benefits to the travel industry as a whole.

With the total Chinese travel market expected to nearly double between 2009 and 2013 to exceed US$105 billion and the online travel market to quadruple over the same period to exceed $15 billion (according to PhoCusWright), travel agencies are poised for significant growth and expansion in China.

However, due to the highly fragmented nature of the travel agency market, many agencies struggle with limited technology infrastructure in all aspects, from back-office systems to mid- and front-office solutions for shopping, booking and reporting.

Opening up

Much of this stems from the lack of competition and urgency in the market, affecting the pace of change and development that is sorely needed to stay on par with global standards.

Abacus already has several leading technology solutions in place to help airlines, agencies and agents improve their operations.

This is especially imperative in a market that is calling increasingly for players to adapt to full-service retail and corporate service models that look to reduce agent compensation.

Travel agencies are now in an enviable position and can look forward to becoming primary beneficiaries during this liberalisation that will see a great deal of change both in existing systems and processes.

They can also look forward to vast improvements in IT infrastructure.

Most importantly, the traveller can look forward to an enhanced booking and travel experience, with the right content, technology and infrastructure in place to seamlessly simplify and deliver what is needed in an efficient manner.

Travel agencies vying for the corporate business travel market will be able to use this new freedom to make special deals with airlines for exclusive corporate business.

Larger agencies especially can look to negotiate with an airline to have the reduced-rate fares it receives integrated into its travel management systems.


Even local player TravelSky is making swift moves now to improve its service quality and system functions. Abacus is already working with TravelSky and appreciates the value of working collaboratively to ensure consistency and quality of technology supporting the anticipated travel growth spurt over the next few years.

Everything, from front-office shopping, BSP data service and business support solutions to content availability and real-time access are important developments that Chinese travel agencies can expect in the near future.

External companies need to understand the importance of working together not only with the airlines and travel agencies involved with this new legislation, but with key player TravelSky so that travel industry stakeholders can benefit in the end.

Deregulation will accelerate the market to be more competitive and balanced globally, providing travel agents with a wider range of technology and content.

Allowing foreign GDSs can only help to bring together the key components necessary for travel agents to succeed in providing an integration of seamless and personalised content delivery to travellers.

NB: This is a guest article by Jack Zhai, chairman of Abacus China.

NB2: China ticket map image via Shutterstock.

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About the Writer :: Viewpoints

A founding principle of tnooz was a diversity of viewpoints from across the spectrum. Viewpoints are articles by guest contributors from around the travel and hospitality industries.



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