August 3, 2007

The online and offline travel experience in China

Many things make living in China harder than living in the US — breathing the air, drinking the water, driving the roads — but here is one exception: taking a domestic air trip. Having logged more than a dozen flights throughout China during the last year, I declare without hesitation that flying in China is a much more pleasant experience than flying in the U.S. has been over the previous five years.

Maybe I’ve been extraordinarily lucky, but here has been my experience. I challenge you to compare this to your own in the US.

In China, my average check-in time, in an ordinary non-elite line, has been under 10 minutes; security line 10 minutes too; hot meal on every flight, including those of under 90 minutes; free beer; seat reasonably comfortable; bathrooms reasonably clean; attendant service invariably pleasant and bilingual; baggage handling 15 minutes; taxi lines from 10 minutes at big airports to 40 at smaller ones. And the clincher: cost routinely lower. For example, last week a non-advance purchase weekday 90-minute flight from Shanghai to Beijing cost $153 and the weekend return (on an Air China Boeing 747) cost $108. It is no wonder that so many of the newly-middle-class Chinese are taking to travel and even booking online.

In 2006, 2.75 million Chinese booked travel arrangements, including hotels and planes, over the internet, according to the Shanghai-based marketing research firm iResearch. On the one hand, that is a very small number, amounting to a scant 2% of the 137 million internet users in China, reported at the end of 2006 by the China Internet Network Information Center. On the other hand, iResearch reports that this represents a 72% increase over 2005. Either way you look at it, it will take a while before the share approaches the 63% of US internet users who said in August 2006, that they had “bought or made a reservation for travel” using the internet, according to our own statistics.

One ingredient that makes online ticket booking more popular in the US is an easier “fulfillment” system. Online payment systems are just starting in China. Payments directly from banks are costly to travel agencies, and credit cards are still relatively new and rare among the Chinese. As foreigners, we do what most Chinese customers also do: we rely on the traditional wad-of-cash system. Our travel-booking system is thus a strange combination of very new and very old technology: we go online to quickly and efficiently book our tickets, then we book a window of time for the motorcycle messenger to zoom over to our apartment and trade our e-tickets for a wad of renminbi, the People’s currency.