Sino Express Travel has entered into a formal agreement with International Travel Systems Inc. (ITS), a wholly owned subsidiary of Wing On Travel.Sino Express will acquire from ITS 100% of Guangzhou Travel Information Systems Ltd. a travel technology company based in Guangzhou China. GZTI owns a Business-to-Business e-commerce software, functioning as a product distribution system allowing travel businesses in China to trade inventory online.
Sino will pay US$7.5 million worth of SXPT shares to complete the acquisition. The transaction is expected to close by the end of third fiscal quarter in 2006. Wing On Travel is one of the largest travel companies listed on the Hong Kong stock exchange. It is principally engaged in the business of providing package tours, travel and other related services with branches in Hong Kong, Macau, Canada and the United Kingdom, and hotel operation business in Hong Kong and China.
“The internet has produced tremendous impact and changes in the travel industry. This deal represents a major opportunity for Sino to become the service leader in China’s online travel market servicing the travel agents,” commented Xia Chen, CEO of Sino Express Travel.
A Powerful e-Commerce Platform Filling the Trading Vacuum Between Agents
According to China’s tourism authority, in 2004, there were 14,927 registered travel agents in China (1,460 International travel agents, 13,467 domestic travel agents). Of the 14,927 agents, over 90% are small to medium sized and regional based agents. These agents offer a limited range of local products due to deficiency in marketing resources and negotiation power with product providers. Also, most importantly these agents lack a product distribution system where travel businesses can trade and take advantage of each other’s products and inventory portfolio.
The e-commerce platform, which will be named “Sino Express”, will enable all travel businesses to conveniently trade products with each other online at an affordable rate. The initial launch campaign will include marketing the platform to large travel operators with high average sales volume and high product inventory offering. It is expected that the new relationship formed with ITS, the technology arm of Wing On Travel, will expose Sino to ample network channels in the travel industry both inside and outside of China. Currently the platform has already signed up Travoo.com, one of the largest travel service providers in southern China region. With Travoo.com’s 500+ and growing agency network, Sino Express Business-to-Business Trading Platform expects to capture significant transaction volume in a short period and expand rapidly.
Mr. Chen further commented, “The online B-to-C travel booking sites are increasingly applying pressure on conventional travel agent businesses in China. This B-to-B e-commerce platform will help these conventional businesses by increase their competitiveness in product offerings and reduce their marketing cost.”
Aaron Au, COO of ITS, commented, “ITS is delighted to be working with Sino Express to create a powerful product that fills an industry vacuum. The synergies and opportunities that will arise from this cemented relationship will enhance both companies’ shareholders value.”
Sino Express Travel Limited ( www.sinoexpresstravel.com ) together with its 100% owned subsidiaries, GS Travel (Hong Kong) Ltd, NSIBC Ltd, YTD Ltd, www.v222.com is an international travel company with operating offices in Hong Kong, Beijing, Guangzhou, Vancouver, Toronto and Seattle. Sino intends to grow its business by acquiring and operating a diversified travel business portfolio, seeking to invest in profitable travel related companies with reputable management and high growth potential.