Hutchison Whampoa, Priceline Revolutionize Travel Industry
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Hutchison Whampoa Ltd. and priceline.com Incorporated, have come together to form Hutchison-Priceline (Travel) Ltd., a multi-language transactional website that will allow Hong Kong's leisure travelers to dictate their own prices for hotel rooms and air tickets over the Internet.
Hutchison will own 65 percent stake in the new company while priceline.com holds the remaining 35 percent.
Priceline.com, a renowned Internet brand with a customer base of about 12 million and selling more than 20 million units of travel products through its U.S. website since 1998, said that the partnership will allow them to leverage Hutchison Whampoa's deep knowledge of Asian markets and an embedded supporting business infrastructure that includes Internet, telecommunications and retail stores.
"This will enable us to begin with a strong footing," said Richard S. Braddock, chairman and CEO of the US company.
In return for big savings, buyers agree to be flexible with their travel plans. To protect the retail pricing systems of airlines and hotels, Priceline does not reveal the suppliers' names until an offer is accepted.
"We are confident that Priceline, which offers smart travelers significant savings on air tickets and hotel rooms, will help to grow the travel industry in Asia. In addition, the model represents a revolution in consumer empowerment and buying patterns and will help solve a major problem for airlines and hotels: how to deal with the thousands of seats and rooms that go unsold every day," said Canning Fok, managing director of Hutchison Whampoa group.
Company officials have confirmed that Priceline's operational testing in Hong Kong is in the final stages, and that results to date have been encouraging. A test audience of about 2,000 has warmed to both the Chinese and English sites, and focus group feedback has been positive.