Ctrip Ground sales staff began a large area of the cut

Abstract: In the face of fierce external market competition, the beginning of the year, the supremacy has begun to shake the Chinese online travel service provider (OTA) Ctrip (CTRP,NSDAQ) launched the counterattack. Ctrip's earnings figures for this year are not pretty. February 1, Ctrip's latest release

In the face of fierce external market competition, the beginning of the year, the supremacy has begun to shake the Chinese online travel service provider (OTA) Ctrip (CTRP,NSDAQ) launched the counterattack.

Ctrip's earnings figures for this year are not pretty. February 1, Ctrip released its latest 2012 annual report, 2012, the company's operating income of 4.2 billion yuan, compared with 2011 growth of 19%, net profit of 714 million yuan, compared to 2011 years a sharp decline of 34%.

"Ctrip does make a series of business adjustments. "February 1, Ctrip chief executive fan accepted this reporter interview, said Ctrip 2012-year profit more substantial decline, on the one hand, because the 2012 is Ctrip's intensive investment, these products have not produced returns; second, 2012 hotel booking business 500 million U.S. dollar price war, the return of more money.

Ctrip net profit fell sharply, constantly outgoing Ctrip founder Liang Mountain as CEO, fan no positive response. He said that Ctrip is a team operating in the face of external business changes, Ctrip will set up a new investment company, mergers and acquisitions in some projects at home and abroad, and the upcoming Ctrip will be set up a destination marketing company in 2 March, to create a relatively independent of the tourism media outside of Ctrip.

"We did cut jobs last year," he said. "Fan admits, was cut to continue 10 years of ground sales staff, Ctrip will gradually form a new sales system." And the last six months a lot of hotel business price "Bloody battle" is continuing, and this March Ctrip price bloody battle will also burn to less profitable air ticket booking business.

Profit fell 34%

February 1, Ctrip reported in the fourth quarter of 2012 and the annual report. 2012, Ctrip net profit is 7.14 yuan, compared with 2011 year big decline 34%.

In 2012, the annual income of Ctrip increased, but net profit fell sharply year-on-year. Earnings rose 23.08% in the 2012 quarter, profits fell 25.17, revenue grew 18.33% in the second quarter, and profits fell 55.83%. Revenue rose 21.81% in the third quarter, profit at bottom 39.53%, just released in the four quarterly report, revenue growth of 18%, profits fell 24%.

Taobao tourism, where to go, art dragon, Cool news and the same way network and other markets later are dividing their market share.

Ctrip still keeps a leading position in the air ticket reservation. Fan said: "Ctrip ticket booking business users far ahead of other businesses, for the field ranked second in 15 times times." ”

But the fact is, because the airline itself to do direct sales, Ctrip received in the Ticket booking commission is falling, currently can only be maintained at 4% to 5%, the profit space is limited.

In the major business competition in the hospitality industry, Ctrip has shaken the supremacy of the position. Ctrip internal staff to the reporter said, where to network, Art Dragon is a rapid rise, become its competitors can not be ignored.

According to the key network published in December 2012, the main online travel website Hotel Reservation Business user coverage monitoring, November 2012, online travel website Hotel Reservation Business user coverage of the top 5: Where to go, Ctrip, cool News travel network, art Dragon Travel Network and Mango net. Where to go net ranking has surpassed the long-term ranks first Ctrip, leaped to the top.

Ctrip's business in the interior accounted for the decline. Carry Cheng newspaper show, Ctrip 2012 from hotel booking business revenue for 1.7 billion yuan year-on-year growth of 15%. Ctrip 2012 Hotel Reservation business revenue accounted for 39% of the company's total revenue, 2011 this ratio of 40%.

Marketing costs are climbing behind the market share slide. Earnings show that 2012 Ctrip annual sales and marketing costs of 984 million yuan, compared to 2011 growth of 58%. This directly led to a sharp decline in Ctrip's net profit.

Fan said: "Because 2012 years on a large number of new products, in 2012 only the fourth quarter of the cost of product development is 264 million yuan, the annual product development cost is as high as 912 million yuan. In addition, the hotel business price war, a large amount of cash return, but also to a certain extent affect the performance of Ctrip. ”

"Ctrip has always maintained a good momentum of development." "In the face of the outside of Ctrip," the "downward" query, Fan said, Ctrip has been in the industry leader, ticket booking business, hotel reservations business and other aspects have maintained a faster growth. 2012 National civil Aviation flight number increased by 10%, but Ctrip ticket booking growth rate of 20%, "the competitors always say some sensational words."

Business model Change

January 22, Ctrip in the middle of more than ground sales branch staff to the reporter said, Ctrip ground sales staff began a large area was cut, in addition to retaining Beijing, Shanghai, Guangzhou, Shenzhen, the four major cities 7 airport channels, the other two or three-line city airport, high-speed rail, railway stations, bus stations and other ground sales staff will be all withdrawn, At least 500 more people are expected to be laid off. "Layoff is our normal sales business adjustment." Fan said it was the normal business adjustment of Ctrip at the end of last year.

In the past ten years, Ctrip's ground sales staff all over the airport, train stations, bus stations, this way of sales for Ctrip brought customers. But the business model has changed over the past 10 years.

Fan analysis, not to say that the ground sales do not, in fact, 2012 new customer growth more than 2011 years. But we found that the cost of ground sales is not as good as PC and mobile online sales.

"More than 50% of our business comes from PCs and mobile phones online, while call centers are below 50%." "Fan said. As early as two or three years ago, we laid out mobile phone online sales, mobile phone online sales division was set up three years, more than 20 million people to download, this part of the business has exceeded the PC in sales.

OTA sales have three main entrances: heavy-asset call centers, lightweight-asset PCs and mobile phone sales online. In the United States, there is no system like a call center. Ctrip's heavy assets call center channel mode has been questioned by the outside world.

Ctrip "brandished" ground sales were cut, whether it means that its adherence to a decade of "Cement + mouse" business model has changed? will layoffs spread to the most massive system of Ctrip--call center employees?

Fan said the Ctrip call center will not lay off staff. Tourism online sales, a large number of after-sales service, including regardless of telephone, PC, mobile booking, there are many after-sales service, but also including air ticket delivery services, Ctrip also need these personnel, they have a great value.

Business structure adjustment, Ctrip embarked on another development path. "The previous Ctrip investment upstream and downstream industry chain is quite cautious, holding 900 million of dollars of cash some wait." "Fan admits, 2012 is Ctrip's intensive investment year, Ctrip will be more active after the opening, will hold the cash to use well."

In the second half of 2012, Ctrip "New product" came out intensively, reviews the return function, "Hundred Outbound travel", the car rental platform and the hotel reservation application based on Android system. In addition, with the Czech airlines, the capital of aviation cooperation, customers can directly in the Cheng Ping on the table to book the ticket, and buy air tickets, such as the capital.

Ctrip will continue to buy in 2013. "Last year, the US's largest OTA takeover to the engine company, Ctrip will also acquire search engine companies, will help Ctrip better service." Fan said there would be more moves in the 2013 merger.

In addition, Ctrip's price war will continue to play down. July 2012, Ctrip announced the investment of 500 million U.S. dollars in the hotel booking business for a one-year promotional campaign.

"Price war is not Ctrip picked up, Ctrip passive challenge." Fan said that the number one ctrip hand in hand cash, the most advantage to play price war. "If Ctrip uses 3 years of unprofitable means to fight a price war, kill all the competitors, but this undermines the market rules." Some Up-and-comer, has not done the best, began to clamor to strangle Ctrip. ”

January 30 Afternoon, Ctrip held a mainstream hotel symposium, two-thirds of participants are foreign chain senior hotel executives. In response to this Ctrip price war, these executives to Ctrip said to carry.

A global five-star hotel Mister said that the price should be closely monitored, for abnormal prices, to strictly punish, to maintain the industry continued. "For example, a five-star hotel in Shanghai, the average price of the room is more than 2000 yuan, online sales of more than 700 yuan." This is a lack of business ethics, destroying the hotel industry's ecological environment. ”

The price-monitoring proposal gained the approval of more than 20 executives present.

Ticket booking business will also be involved in the price war. Fan that the ticket booking market more sensitive, more complex operation, discount range has not come out, after the new year. "Ctrip ticket booking business ranked first, ranked second company only we one-fifteenth." "Fan seems to be full of confidence in the new battle.