24 October 2003
Abacus International's vice president for North Asia
Patrick Lai considers his posting to China earlier this
year a "homecoming" of sorts. Ten years ago, Lai was part
of the team that made Abacus' first foray into China,
signing up mainland Chinese carriers for the global
distribution system (GDS).
Today, Lai is impressed at how much the Chinese market
has learnt about GDSs since then, even though the market is
still closed to full foreign participation.
"They have learned very fast in the last 10 years. The
Chinese know the business well - I have been quite
impressed," said Lai.
His impressions of the China market since moving there
from Singapore in April are also about how diverse and big
the market is. And how much potential business there is to
glean from it.
Recognising that has resulted in the setting up of the
regional office when Lai moved to Shanghai. The new office,
staffed currently by four, complements the other two
existing offices in Beijing and Guangzhou.
In a market that is still not open for full
participation by international GDSs, Abacus has had to find
other ways to establish itself in China.
"We are here to give agencies a sense of what Abacus is,
and what we can offer. We are doing a lot of training and
education - not just for agencies but also the airlines,"
Lai is also focusing his team on learning the
"We are trying to understand the market conditions here.
The agencies here have very unique and different
practices," said Lai.
The Chinese government has yet to fully open the market,
allowing only foreign GDSs to establish their presence in
China in a very limited scope. To date, foreign GDSs such
as Abacus are not allowed to participate in the Bank
Settlement Plan, which is, said Lai, "still the biggest
Abacus has a minority investment in TravelSky, China's
own GDS, which it sees as a likely local partner.
"TravelSky could be seen as a competitor, but of course,
it is still not an open market. TravelSky is definitely a
potential cooperative partner for us in China," said
Lai said Abacus works very closely with TravelSky and
the latter is already using some of Abacus' technology and
solutions, such as its net fares solution FareX.
Because of the BSP limitations, Abacus does not do many
actual sales in China. But hotel sales are picking up, said
"Corporate agencies here are starting to use the GDSs
for hotel bookings. We have seen a strong interest in the
market to use GDSs to book hotels, so we are doing a lot of
education and training with the hotel chains," said
One likely sector that will take the lead in cultivating
a "GDS culture" in China are the corporate agencies, but
there is still a lot to be done before it happens.
"Travel management is still quite underdeveloped here in
China. Most agencies here do everything - from corporate
ticketing, to tours, to leisure groups. It is still the
beginning stages here in China," said Lai.
He said corporations in China still did their travel
bookings through their secretaries and it is very
decentralised. "They don't practice centralised
purchasing," said Lai.
He said before Abacus could even introduce their
corporate technology solutions, it must first focus on
helping the industry develop a stronger TMC culture in