Asian Online Travel Pioneer Zuji Shuts Down

Asian Online Travel Pioneer Zuji Shuts Down

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Asia’s online travel agency pioneer Zuji is no longer in business, having failed to pay money owed to airlines, and to renew its travel agency licenses in Singapore and Hong Kong, the two remaining markets it operated in.

The International Air Transport Association confirmed with Skift that it had terminated Zuji from in its billing and settlement plan, the clearing house for payments between travel agencies and airlines.

A check with the Singapore Tourism Board showed Zuji’s license ceased on January 1, while in Hong Kong it expired on January 9, according to the Commerce and Economic Development Bureau.

Zuji’s websites in both markets also return an error message instead of the earlier “New site coming soon” that was shown in December. Jacob Jiang, commercial director of Uriel Aviation Holdings, Zuji’s parent, did not respond to Skift’s questions.

While the airline group would not reveal the amount owed to airlines, the Travel Industry Council in Hong Kong reported that it had received over 50 cases involving refunds totaling $32,000 to-date.

Zuji was launched in 2002 by 16 leading airlines operating in Asia-Pacific – All Nippon Airways, Cathay Pacific Airways, China Airlines, EVA Airways, Garuda Indonesia, Hong Kong Dragon Airlines, Japan Air System, Japan Airlines, Malaysia Airlines, Northwest Airlines, Philippine Airlines, Qantas Airways, Royal Brunei Airlines, SilkAir, Singapore Airlines and United Airlines – and Travelocity, at the time owned by Sabre Corporation.

Their investment was believed to be in the range of $50 million to $100 million (2001 figures). Online travel in Asia and China was seen as the new gold. The airlines also saw Zuji as a means to cut distribution costs and bypass travel agencies.

“Once you hit break-even, the cost of selling that extra ticket is nearly zero,” Tim Fitzsimmons, general manager e-business for Cathay and acting CEO of Zuji, said in an interview with South China Morning Post in 2002. He said Zuji was expected to reach profitability in five to six years.

Zuji’s first CEO, Scott Blume, who came on board in January 2003, said in a press statement at the time, “Zuji’s mission, as I see it, is to lead the evolution of online travel sales in Asia-Pacific.”

“From the initial results, it is clear that there is demand out there for a region-wide one-stop online travel portal. Looking at Zuji’s product development plans, including the roll-out of a state-of-the-art air booking engine and a tours and packages capability, I have no doubt that we will be in a position to change the way customers in Asia-Pacific buy travel, leveraging the advantages of the Internet for the benefit of consumers and travel suppliers alike.”

That was not to be. Zuji’s pattern of changing hands every three to four years — fully acquired by Travelocity in 2006, sold to Webjet in 2013, which sold it to Uriel in 2016 – was a telltale sign not all was well with the company.

It is not difficult to imagine why its current owner, Uriel, would rather focus on its major venture, HK Express Airways, Hong Kong-based low-cost carrier partly owned by HNA, and U-Fly Alliance, the world’s first low-cost carrier alliance, than to try to compete in the Asian online travel space which by now are filled with well-funded start-ups such as Traveloka in South-east Asia and Ctrip in China.

Travel

via Skift https://skift.com

January 14, 2019 at 11:36AM

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