Ctrip into a loss, will not trigger the capital market worries?

Absrtact: The fragile order established in the online tourism industry in the past two years is in jeopardy. Giant collective losses mean more brutal competition, the line of OTA platform blurred constantly break down the pricing system and cooperation mode of the hotel, traditional travel agency suppliers in the platform Bo

The fragile order that the online travel industry has built up in the last two years is in jeopardy. The giant collective loss means more brutal competition situation, the line of OTA platform blurred constantly break down the pricing system and cooperation mode of the hotel, traditional travel agency suppliers in the platform game to regain the right to speak, and the new pattern finally formed still need a long time.

As one of the most important, Ctrip's next development trend, the impact on the evolution of the pattern is self-evident.

Previously, Ctrip in the third quarter of this year after the announcement of the conference call, said the company will be listed in the four quarter of the first loss in 11 years, the loss amount of up to 400 million to 500 million yuan. Ctrip CEO Liang Jianzhang said the fourth quarter will be a large-scale promotion, set aside the marketing costs, so forecasts may face large-scale losses.

Strong Team Consulting CEO Wei Changren that in order to expand market share, Ctrip investment in various aspects and the basic equivalent of competitors, the loss is inevitable, Ctrip is expected to lose, is a passive defensive strategy, but also the initiative to continue to lead the competition action. But once the losses, from the current competitive posture, it is expected that the next year or two will be very difficult to achieve scale of profitability.

If Ctrip into a loss, will not trigger the capital market worries? In this respect, Liang Jianzhang has said to Tencent technology, the market share of the Internet companies and short-term profit analysis is more rational, many loss companies can get high valuations.

However, compared with December 1, Ctrip's current share price of 45.12 U.S. dollars, the market value of 6.167 billion U.S. dollars, has fallen by about 16%.

"Where is ' barefoot ' is not afraid of shoes," but Ctrip profit to the next step, the market needs to respond, after the market fully adjusted, if Ctrip can prove their high growth, then the market will revalue its value. "The investment manager of a foreign fund company that has long been concerned about tourism told Tencent Technology. Where to go previously also long-term losses, stock prices have been floating up and down 30 yuan, obviously the market to go to where the model has been enough to anticipate and judge.

Price war is a helpless move?

Ctrip and where to go this month all claimed to be launching a more violent "price war". Liang Jianzhang said Ctrip will take out 1 billion dozen price war, the introduction of different grades and areas of 0 profit tourism products, where to go network CEO Zhungchengsu said, where not afraid to play price war, and can be protracted competition.

Zhungchengsu think, where the competitive advantage is the cost, "such as ctrip every 100 dollars in the transaction cost of income is four yuan, where to network support transaction costs is a dollar." For us, we make a profit on the price of two dollars, and the competitor's price is three dollars or a loss. ”

However, from where to the current focus on the hotel direct sales business, responsible for the market development of the destination division has reached thousands of team, where to find the urgent need to look for effective passenger flow to support the high input hotel "direct" system operation.

It is understood that where to? Recently besides with Liu Yan and Tong greatly cooperation for star marketing, but also through the "Thousand Yuan Gift package" activities to pull up the night amount, through the Free Commission strategy to encourage the hotel directly in front of the conversion door-to-door, as well as through Ctrip, Art Dragon, the United States and other sites booking user traffic.

Ctrip quickly responded, adjusted a number of high-star hotels in the list page price display, the hotel is paid directly for the price of the return immediately after the price, Ctrip is clearly in order to make Ctrip price more competitive, it is noteworthy that Ctrip has announced the introduction of hotels and other fields of comparison products, To expand the online hotel booking product size.

Some analysts believe that Ctrip hotel revenue in the long-term price war continues to decline, the introduction of the hotel price Ctrip introduced new strategies, the hope side to promote direct sales and price system was disrupted by the High star hotel pressure control Ota and where to return, ease the pressure of their own competition.

As early as this year before the National Day holiday, China, such as home, Jinjiang Star, pudding and other major domestic chain hotel groups have teamed up to Ctrip, where to put pressure on the latter to stop the relevant promotional activities on the site.

Budget hotels do not hesitate to stop the threat of "return", from "return" broke the price system of the budget hotel, and eroded the interests of members and profits. Through the return, OTA offers the purchase price will be far more favorable to the hotel directly to provide their own members of the price, resulting in the loss of hotel members into OTA users, and the future of the budget hotel to provide OTA more and more commission, depress their own profits.

However, the chain Hotel line under the direct sales channel sold in the number of rooms in the 80%-90%,ota distribution ratio is usually only around 10%, for more single hotels and higher-star hotels, OTA has more control over the word.

The price war is the competitor Challenge Ctrip's main competition way, from the ctrip angle, obviously hoped that the high star hotel controls the third party channel to return, maintains own previous competitive advantage.

Multi-line operational worries

There is news that, although Liang Jianzhang said Ctrip will take out 1 billion dozen price war, but the fourth quarter of the huge deficit to Ctrip caused no small pressure. Ctrip has been on the Commission to maintain the same situation under the request of cooperative hotels to reduce sales prices in order to ensure their own profits in the price war,

In a sense, ctrip from the traditional call center model to accelerate the transition to the mobile Internet, doomed to the loss of pressure will gradually increase. The reason is that, in addition to the company's original including call center twenty thousand or thirty thousand employees caused by personnel costs, Ctrip online booking ratio of the larger, the return of pressure, price wars and market input brought about by the loss of the greater, but also face a number of business at the same time the pressure of combat.

The challenges facing Ctrip come from three. From building a one-stop tour and travel service, Ctrip's positive competitor is Baidu's where to go; from the subdivision of the business sector, the front is too long to carry ctrip from Alibaba to Ah, poor travel network, art Dragon Net, with the network and donkey mother, taxi applications and other types of vertical app competition The original market also faces the erosion of local life service applications, such as direct selling platform of hotels and airlines, independent tour app, American Regiment and public comments.

In the past two years, Ctrip investment scope covers short rent, hotels, tourism, community, travel, leisure vacation, car rental, cruise and other tourism eco-chain upstream and downstream areas, however, because the competitors in the subdivision area more focused, concentrated advantage of resources, in the air tickets, hotels, tickets, taxi rental, destination travel and other fields and Ctrip fierce confrontation, Ctrip has to fight more lines, diversify resources and energy.

In each subdivision area, Ctrip will be faced with greater capital and competitive pressure if it is to continue to maintain investment acquisition and high investment in market promotion and price war.

Of course, there is a similar situation where to go, with where to go increase in the field of TTS and direct investment, Ctrip also continue to promote the expansion of the open platform, the business and model of two companies are getting closer and more and more competition between the two sides, where to maintain this year's research and development, sales and marketing fees on the high investment, Also led to where to go today serious loss situation.

It is noteworthy that the same route and the cattle in the leisure tourism market is also increasing competition, for Ctrip, although in two companies have a certain proportion of shares, but not the controlling shareholder, in their own market share is impacted at the same time, how to deal with investment in different companies after the internal friction, better integration is also facing the challenges of Ctrip.

Liang Jianzhang before the Tencent Technology interview, talking about the investment of Ctrip in the external companies using the "small share" way of thinking, he said, in need of two companies to complete the integration of team technology needs to use the holding method, if it is relatively independent line of business, investment small stocks can also maintain the company's independent initiative and innovation of activity, Compared to the total lack of capital relationship between the two sides of the cooperation effect will be much better, such as with passers-by, easy road cooperation, can give customers a better experience.