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Expedia Eyes Smooth Landing in Asia

Basking in the glow of its recently reported 3rd-quarter profit news, Expedia Friday said it will expand into Asia by the end of 2003.

James Vaile, vice president of Expedia Asia-Pacific, told Reuters the online travel concern plans to have operations in Hong Kong, Australia and Singapore by the end of the first quarter next year.

Vaile did not specify which of the three areas his firm will first touch down in and Expedia did not return calls seeking comment as of press time.

"Twenty-nine percent of the global Internet population is located here in Asia," Vaile told Reuters. "The online travel market for the Asia-Pacific region is estimated at approximately US$8.3 billion by 2004."

Vaile indicated that Expedia would have to feel business in Asia out for at least four years to gauge what most appeals to consumers, as well as to see what kind of partnerships the company can ink with hotels and airlines.

Of course, Expedia faces the same competition in Asia as it does in the U.S. -- in the form of Priceline.com, who pushed into Hong Kong this past year. In fact, Priceline.com Friday announced the expansion of its Name Your Own Price hotel service to major cities in China, Singapore and Thailand.

Last week, Priceline.com teamed with MSN to offer portal services to Expedia customers. Native to Asia, another rival-to-be is Zuji, a service operated by a group of major regional airlines including Cathay Pacific and Qantas.

Clearly, Expedia will have its hands full with competition, but that isn't the only obstacle, according to Jupiter Research analyst Jared Blank.

"Expedia will be making a slow, careful entrance into the Asia-Pacific market over the next four years or so," Blank told internetnews.com. "Expedia understands early on that the Asian market has been difficult for US companies to crack online. In fact, eBay's biggest struggle has been in Japan. That said, Expedia understands the difficulties associated with translations for these markets, and has set realistic expectations that should set them up for success there down the road."

Bellevue, Wash.-based Expedia is hardly a stranger overseas: internationally, it has expanded its market coverage to include Britain, Germany, France, Italy and the Netherlands over the last four years.

Despite sluggish sales for dot-coms across much of the board, Forrester Research said more and more travelers are turning to the Internet for bargains, "fueling the competitive battles between travel suppliers and Web agencies to gain consumers' attention and dollars."

The research firm said 43 percent of North American Web travel households will book leisure travel online -- 12 percent more than in 2001. In 2002, when Web travelers will spend just under 30 percent of their leisure travel budgets online, leisure travel will drive $22.6 billion in revenue. By 2007, 32 percent more households will spend 39 percent of their travel budgets online, generating $49.7 billion.