Confident of the long-term prospects of China's online tourism market, but because of the fierce market competition

Morgan Stanley reported today that it is confident about the long-term prospects for China's online tourism market, but that NASDAQ:CTRP, Nasdaq:long and where to go (NASDAQ:QUNR) will face profit margins as competition remains fierce.

The following is a summary of the contents of the report:

The market is still fiercely competitive, with most of its leading rivals vying for mobile market share, such as Ctrip, art dragons and where to go. As investment continues, including brand promotion, mobile applications pre-installed and rebate promotions, these companies have recently been uncertain about their profit margins. Where to go. Cooperation with Baidu (which will come into effect next January) would limit some of the other opponents to winning online users, such as Ctrip and the Art Dragon. Ctrip data shows that its 10% to 15% of online traffic from search engines, mainly for Baidu.

Ctrip, Art Dragon and where to go the current investment in mobile areas is mainly because the market is still in the initial stage of development. These three companies are becoming less dependent on each other's platforms, which means future competition may be more intense. Where to go, for example, has said that its revenue from the Arts dragon and Ctrip has taken a small percentage.

Currently, about 4% of total revenue comes from the art dragon, compared with 5% to 6% in 2012. And from Ctrip's revenue ratio is lower than the art dragon, because until September this year to where to cooperate with Yi Ctrip.

In the mobile market, the Art Dragon is no longer in cooperation with where to go. Since the beginning of this year, where to contribute about 10% of hotel bookings for the Arts Dragon, but this year has been in a downward trend. In terms of mobility, the art dragon has not cooperated with where to go, because the art dragon does not want users to complete the transaction on other platforms other than their own platform.

Where to go has indicated that is willing to restart the rebate preferential measures, this may affect Ctrip's profit margin. Where are we going? The rebate was introduced in the second quarter of this year, shrinking the scale of activity in September. But the company has said it will consider restarting the activity. Ctrip's hotel bookings are several times higher than where they are, so providing the same level of return activity means a high number of times the cost.