FAQ - Frequently Asked Questions 1. How can the company compete against household names? Who are your competitors? In-Bound reservation is our business. As an in-bound agent, we service USA and Europe travelers coming into Asia. Out-bound agents bring travellers out of the countries. We are destination-driven while out-bound agents are departure-driven. Hence, we do not compete directly with household names or other out-bound agents. Our competitors are wholesalers in USA and Europe. Our edge is in direct dealings with hotels in Asia and we provide customer service on the ground. These wholesalers cannot reach our supplies or service their customers effectively without on the ground presence. 2. Where is the company's value add? What is so unique about the company? Asiatravel is unique because it has access to both demand and supply side of the value chain. Traditional agents are either strong in demand or supply but not both. For example, retail agents or out-bound wholesalers deal with customers - hence they have demand but not supply. They depend on overseas wholesalers in the countries of destinations to supply them. In short, Asiatravel has the combined strength of demand and supply. We perform the roles of retail agent, out-bound wholesaler and in-bound wholesaler and make it more efficient online. 3. Why do you focus on Asia only? Why focus on hotel reservations? We focus on destinations with high in-bound traffic. Thailand was our first base as it is the favorite destination in South-East Asia. In the past 6 years since 1995, we have built up 22 destinations in Asia, Pacific and Middle-East. Our next focus is to strengthen our presence in North Asia. Why hotel reservation only? Hotel reservation is a highly fragmented business and the traditional distribution channel is not efficient. Hence, our competitive advantage is highest in this segment of the travel business. We do offer other travel services like sight-seeing and selected air-ticketing in our destinations but as a complement to our core hotel reservation business. 4. What are the industry characteristics / outlook? According to Forrester Research, travel is the single largest product sold online accounting for one-third (1/3) of all transactions done over the internet. This is due to the nature of travel product that is information-intensive at the point of purchase. Internet has evolved to be the most ideal media to deliver information. Forrester also forecasts that by 2003, the number of online households will increase to 183 million worldwide. In US alone, the amount spent on online travel sales will reach USD29 billion by 2003. 5. Compared with other dotcoms, your company has no burn rate. Why is this so? One of the largest cash outlay for dotcoms is customer acquisition cost. Internet is a new channel and being a new channel, marketing dollars and promotion is needed to attract eyeballs / increase visibility. Asiatravel has been fortunate in that we started our presence way back in 1995 before everyone elsewhere. We have been able to list over 20,000 of our web pages into search engines. Search engines have now stopped listing new entry and some have even switched to charging on "pay-per-click" model. We estimate that the replacement cost to acquire our volume of traffic now on "pay-to-click" model would cost at least half a million SGD per month for any newcomers. This is the benefit of first mover's advantage. 6. How are your rates compare with other players? Our rates are very competitive for long-haul reservation. The long-haul reservation channel has inherently more intermediaries in-between. As Asiatravel uses the direct channel, the amount of saving from by-passing the intermediaries' markups are passed back to customers or to the hotels. For long-haul travelers coming to Asia, we offer consistently one of the most competitive packages. For this reason, Asiatravel has a niche position in the provision of long-haul reservation. 20% and 30% of our customers come from USA and Europe respectively. 7. Any risks of your business? Asiatravel is in the travel industry and we are exposed to adverse risk facing the travel industry as a whole for example natural disasters and political unrest. Fortunately for us, we are not overly concentrated on certain destinations. Going forward, we are opening more destinations in North Asia, USA and Europe to help cushion against risks in any specific region.

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