International business now accounts over 30% of total revenue as demand for customized travel products booms
SHANGHAI, China, May 15, 2019 (GLOBE NEWSWIRE) -- Jane Sun, CEO of Ctrip.com International, Ltd. (CTRP) ("Ctrip"), Asia’s largest online travel agency and the second largest in the world, recently laid out the next stage of development for the leading travel group in an internal letter. Ms. Sun noted that Ctrip is entering the third stage of its strategic development, characterized primarily by the expansion of operations outside China and a focus on serving mid-to-high end travel consumers.
Ms. Sun’s letter marked the announcement of a share exchange transaction between Ctrip and Naspers, in which Ctrip will become the largest shareholder of Indian online travel agency MakeMyTrip post the transaction.
Ms. Sun described how Ctrip was founded 20 years ago with the goal of revolutionizing online travel booking, and entered its second stage of development six years ago as the company adapted to the rise of mobile internet and expanded into a one-stop-shop for travel services. The third stage of Ctrip’s development, she wrote, would be to make Ctrip “a company based in China but with a global vision.”
The MakeMyTrip transaction was hailed in Ms. Sun’s letter as an important starting point within Ctrip’s third stage of development. Ctrip’s confidence in the deal’s potential was based on the company’s deep understanding of the global travel industry.
Remarking on the deal, Ms. Sun said, “Of all the major economies, India has the youngest population and the second largest overall population. With the rise of the Indian middle class and the rising penetration of traditional and mobile internet, India’s tourism market has already become a key area of focus for global Internet giants. Aided by these demographic trends and the strong potential for internet startups in the Indian market, MakeMyTrip has achieved impressive growth over the last few years, with the platform’s gross merchandise volume sustaining a growth rate of 43% in the past three years amid declining losses, making it a very attractive investment for us.”
Ctrip’s financial results for the fourth quarter 2018 showed that the company’s international business accounts for 30-35% of Ctrip Group’s total revenue, with growth in international hotel and air ticket bookings equivalent to three times the industry average. Ctrip’s UK-based subsidiary Skyscanner has also continued its rapid expansion, with revenue from flights booked directly on its platform increasing more than 200% in the fourth quarter of last year, as Ctrip’s international brand Trip.com achieved triple-digit growth in its air ticketing business for nine quarters in a row. The company’s annual GMV is now over 725 billion RMB, larger than global players Booking.com and Expedia.
Ctrip has recently launched a raft of localized initiatives to meet the unique demands of consumers in its home market. Within the last year alone, Ctrip has launched TrainPal, an app for buying train tickets in the UK; opened overseas call centers in Edinburgh, Seoul and Tokyo to improve local service capabilities; and its subsidiary Ctrip Finance partnered with Standard Chartered to launch a virtual bank in Hong Kong. In addition, Ctrip’s international brand Trip.com is now a common sight at tourism fairs across the globe and Ctrip’s train ticketing services have recently been made available to Japanese consumers.
Consolidating a strong position in mid-to-high end travel offerings through international partnerships
In March Ctrip launched a series of high-end customized travel products, covering more than 80 countries and regions, including destinations in Europe, the Americas, Oceania, the Middle East and Antarctica. High end customized travel packages aim to provide high net worth individuals with the ultimate overseas travel experience, in manner tailored specifically to the tastes of discerning clients, with impeccable service quality.
Ctrip’s data shows that since the official launch of Ctrip’s customized travel platform in 2016, demand for these services has increased at a three-digit rate for three consecutive years. CEO Ms. Jane Sun recently gave an example of the popularity of these highly tailored packages in an interview with Fox News, stating, “The most expensive tour we’ve sold costs about $200,000 per person per trip, and it only took us about 17 seconds to sell these packages. That gives you an idea of how exclusive consumers can go when it comes to choosing their package.”
Ctrip has continued to expand its market share in the mid to high-end hotel market, a segment in which the company is growing at twice the rate of the industry average. This growth has been driven in part by the close partnerships forged by Ctrip with leading luxury hotel brands including Club Med, Aman, Rosewood, Shangri-La, Millennium, the Centara Hotel Group in Thailand, the Melia Hotel Group in Spain, the Magnuson Hotel Group in the US, as well as Accor, Hyatt and Radisson Hotels.
About Ctrip.com International, Ltd.
Ctrip.com International, Ltd. is a leading travel service provider of accommodation reservation, transportation ticketing, packaged tours and corporate travel management in China. It is the largest online consolidator of accommodations and transportation tickets in China in terms of transaction volume. Ctrip enables business and leisure travelers to make informed and cost-effective bookings by aggregating comprehensive travel related information and offering its services through an advanced transaction and service platform consisting of its mobile apps, Internet websites and centralized, toll-free, 24-hour customer service center. Ctrip also helps customers book vacation packages and guided tours. In addition, through its corporate travel management services, Ctrip helps corporate clients effectively manage their travel requirements. Since its inception in 1999, Ctrip has experienced substantial growth and become one of the best-known travel brands in China.
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