In the online hotel/ryokan (Japanese style inn) booking services in Japan, the internet specialized "Rakuten Travel" has been far ahead of the online booking service offered by general travel agencies such as JTB. Recently, another online specialized "Jalan" is in hot pursuit of Rakuten Travel and they both have become the two major online hotel reservation websites today.

Comparing each website's total sales, Rakuten Travel in the fiscal year 2003(April 03-March 04) was 95.7 billion and Jalan was 27.3 billion yen. In the
FY 2006(April 06-March 07), Rakuten made 163.1 billion while Jalan reached 110.5 billion yen. Considering that Rakuten's total sales includes overseas hotel booking since the FY 2005, the real gap between the two could be even narrower.

In 1996, "Tabi no Madoguchi", the forerunner of Rakuten Travel launched a new business called "space rental" for online hotel booking, offering web space for accommodations seeking clearance of their last minute leftover rooms. The space rental also responded to the demand of small sized accommodations that had no regular contracts with travel agents. Rakuten experienced a drastic growth by the space rental which numerous other online booking services also encountered. However, hardly any caught up with the results of Rakuten.

Jalan, in the meantime, started out as the Internet version of a travel information magazine "Jalan". Its online hotel reservation service began in 2000, primarily offering line-ups of the magazine's advertisers such as minshuku (Japanese style Bed and Breakfasts) and pensions. Instead of directly competing with better lined up of business hotels* on Rakuten, Jalan first targeted on magazine readers, mostly young with leisure purposes. The strategy resulted in Jalan's leading position ahead of other online booking services. Jalan later concentrated in enlisting ryokan and business hotels while Rakuten did so in ryokan, minshuku and pensions to increase the number of accommodations registered on their websites. However, the expansion of both websites appears to have reached its peak.

It is often said that Jalan's rapid growth owes a lot to its more than 200 sales staff placed throughout Japan. Originally engaged in advertisement sales for the magazine "Jalan", they are also active in cultivating new accommodations to be enlisted on the website and strengthening communications. Facing little increase in the newly listed accommodations, Jalan recently renewed its website. Expecting that the key element for further growth is to have each accommodation offer more diversified package plans, Jalan now approaches them more intensely. Hotels and ryokans appear to credit Jalan’s industrious and devoted sales activity.

As for a successful model case in restriction-free online "space rental" business for hotel booking, both Rakuten Travel and Jalan have gone far ahead of existing travel agencies' websites in Japan.  On the other hand in 2005, Rakuten applied to some accommodations the "block contract" just as general travel agencies and raised the transaction fee rate for those which chose to remain dealing with space rental. However, it can also be regarded that application of block contract enables Rakuten to obtain options such

as "on-day"(designated peak days) and future stocks, both being space rental business 's weak points. Jalan,
in contrast, stays focused on the existing space rental.
The question lies how will the difference in direction between Rakuten Travel and Jalan affect their business result? Will it bring about a further expansion of either one of the company’s online accommodation booking?  
*Simple and functional hotels often used by business travelers