ASSIGNMENT

ON
HUELLA ONLINE TRAVEL

Submitted to:-
Dr. VSR VIJAYAKUMAR
By:
Pallavi Bizoara
Section D
Roll No: 2013183
(BUSINESS RESEARCH METHODS-Term III)

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 CASE ANALYSIS OF HUELLA ONLINE TRAVEL

1. Give a brief description of travel industry and the business model adopted by the industry
*TRAVEL INDUSTRY – In 2006, the travel industry was booming around the world, particularly
in the Asia Pacific region. Despite the dampening effects of events such as 9/11 and SARS on global
tourism, the industry enjoyed a spectacular rebound in 2004 and had been growing ever since. It was
growing despite downside risks due to terrorism, health scares due to avian flu and rising oil prices.
The world average of tourist arrivals globally was 842 million, with maximum in Europe and
minimum in Middle East. Three main functional roles in the tourism industry:
(1) Direct Travel Service Providers (Suppliers) (2) Distributors (3) Travel Agents

*BUSINESS MODEL ADOPTED BY THE INDUSTRY

CONVENTIONAL

Earlier manual booking were done in which physical “cards” were used
to represent seats on the airplanes. Things changed when „Flight Booking System‟ came into picture.
This system was intended to integrate and automate the company‟s reservation and ticketing
processes. The various Airline Reservation System (ARS‟s) soon evolved into single Computer
Reservation System (CRS) which expanded into Global Distribution System (GDS).
The travel industry was one of the earliest to go online. The advent of online travel had
revolutionised the travel industry by offering a cheaper alternative to CRS/GDS technology for travel
service providers. According to new business model adopted by the industry there were three types
of online travel agents:
(i)Online stores set up by brick-’n-mortar agents –an extension of traditional travel agents.
(ii)Online travel portals that not only sold travel products and services but also offered destination
information and other services. Some of these were “pure” online travel agents without any physical
stores.
(iii)Online travel bidding sites

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But because the companies had to pay these agents commission which were major part of
distribution costs, they intended to make the customers buy the tickets directly from the company‟s
website. These were the business models adopted by the travel industry.
NEW BUSINESS MODEL

2) How do you see the performance of Huella Online Travel Ltd (HOT) and what are its
current concerns?
* Huella‟s performance in Hong Kong had been lower than its other markets. After the launch of the
company‟s Hong Kong site in 2000, its market share had been stable around 5%. Its total revenue
across all the markets had reached US$100 million. The company has been enjoying growing
revenues since inception. Its market share for airline travel in Hong Kong was very low compared to
other countries. The performance of HOT was poor in Hong Kong whereas it was above average in
the other countries because its growth rate in other countries exceeded the revenues of the respective
countries. Current concerns include:
(i)Though the internet penetration in Hong Kong was one of the highest in the world city‟s online
travel had not picked up with the city‟s adoption of online shopping for flights being one of the
lowest in the world.
(ii)Many respondents considered HOT as risky and unreliable.
(iii)There were many concerns regarding the security in the usage of credit cards.
(iv)People were used to traditional, brick-„n-mortar agents, which disallowed them to travel air
tickets from the company‟s websites.
(v)The company‟s site traffic was not resulting in the purchases but they were just using it as an
information provider and would purchase from traditional, brick-„n-mortar agents instead.
3) Define the marketing management problem faced by HOT?
* Different marketing management problems faced by HOT are as follows:

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(A) BRAND AWARENESS: A majority of the respondents were not aware of the brand and few
who have heard about it tend to have vague impression about it.
(B)BRAND IMAGE: As per collage technique Huella was perceived as risky and unreliable, mainly
due to the concerns about the security and stability of Huella‟s website.
(C)BRAND POSITIONING: The customers were well acquainted with the traditional online travel
agents who saw HOT different from these agents and were averse in using HOT‟s website for
purchasing the travel tickets
(D)USAGE PATTERNS: Due to the low brand awareness, many people had never used the site
before, nor had they used any other regional sites of the company.
Among the few users who used the website, used it only to gather the information and then would
purchase from traditional agents.

4) As a business research consultant what could be your research objectives?

A) As a business research consultant my objective would be to see what are the various factors on
which the growth of HOT is based upon and also the factors which are hindering the progress of
HOT. My objective would be to decide the various independent variables which are affecting the
growth and their effects on the dependent variables. To know the interactions among various
variables. To test the kind of relationship between the variables (whether positive or negative) and
whether the research objectives are in sync with the company‟s objectives.

5) What type of information you would like to collect to answer your research objectives?
A) I would like my information to be more qualitative as well as quantitative because quantitative
information without quality would mean nothing. Information which is not related to the research but
which is quantitative would lead the research nowhere. Quantitative data is not characterized by
numbers, and instead are textual, visual, or oral; focus is on stories, visual portrayals, meaningful
characterizations, interpretations, and other expressive descriptions. Both qualitative as well as
quantitative data would be helpful to answer the research objectives.

6) Formulate a research program to help solve marketing management problems faced by

HOT.
A) Research program to help marketing management problems faced by HOT:

QUANTITATIVE RESEARCH:
STEP 1:
HYPOTHESIS: Global tourist arrivals impacts the revenues of HOT

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Year Arrivals(million) Revenues of HOT
2000 687 48.4
2001 687 51
2002 707 57.4
2003 694 52.3
2004 765 68.1
2005 806 75.2
2006 842 80.7

From the data in the table it‟s obvious that global arrivals are the independent variables and revenues
of HOT is the dependent variable. As we see the arrivals has affected the revenues of HOT from the
data given. Revenues of HOT are positively correlated with the global arrivals. If we calculate the
correlation between the two we find it to be 0.99 which is highly positively correlated

RESULT: Hence, the hypothesis that global arrivals has affected the revenues of HOT is true.
If we observe the internet penetration in Hong Kong was 59% but it contributed only 8.8 million to
the overall global arrivals which clearly indicate that though people are used to internet they don‟t
use the HOT site often. This problem can be solved by using the Qualitative research
QUALITATIVE RESEARCH
Qualitative research involves Focus Group Interviews, Depth Interviews, Conversations, Semi
Structured Interviews, Sentence Completion, Observation, collages, Cartoon Tests.
In this we can use the Focus Group Interviews which are basically small group discussions led by a
trained moderator. Through this we can gain multiple perspectives, It can be done quickly and is also
flexible. This also may produce piggyback which is a procedure in which one respondent stimulates
thought among the others: as this process continues, increasingly creative insights are possible.
The focus group should consist of 7-10 people who are averse in using the HOT site and the
moderator can question the group and hence can know their reasons of not using them. And by
knowing the reasons the moderator can work upon the perceptions or the areas of improvement of
the Brand. As per say the company can work upon improving its Brand Awareness.
Remove the preconceived notion in the minds of customer that HOT is risky and unreliable by
explaining them that their sites are Verisign secured and that it also offers verification by Visa and
MasterCard Secure Code services as an additional security measure.
It can improve the Brand positioning by explaining the simplicity and offers in online transactions by
explaining them the advantages of online transactions over traditional online travel agent
It can also make the people who are accessing the site to actually use the site to make transactions
rather than just using the site to gather information by explaining them the advantages.

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