Ctrip PK to where, online tourism rush

Daily economic News (blog, Weibo), securities daily

Before and after the spring Festival is usually online tourism industry (OTA) busiest time, booking air tickets, hotels and many other business will usher in the peak. However, this year's Spring festival, for Ota Big Brother Ctrip, but added two things: first, was a huge cut ground sales staff, and second, where the opponents to the network blamed "profiteering". Ctrip shares fell by as much as 15% per cent on the same day in Friday. Ctrip said that layoffs are the original ground sales channels for optimization, and to where to go to the network of accusations of "no response."

500 people were laid off, Ctrip said it was a transformation

Ctrip since the second half of last year began to cut the ground sales staff, in addition to retaining Beijing, Shanghai, Guangzhou, Shenzhen, 7 major 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or three-line city airport, high-speed rail, railway stations, bus stations and other ground sales staff will be all withdrawn, is expected to lay off at least 500 people. From more than Ctrip internal staff of the explosion, the two or three-line city of the ground sales staff, only a small part of the arrangement of internal transfer.

Ctrip related Responsible person said, Ctrip 2012 at the end of the original ground sales channel optimization, the staff involved, are given proper placement. But the call center doesn't have any compression or redundancy plans.

A person in the industry said: "Ground sales is the most important way for Ctrip to start." Whether Ctrip is the optimization or layoffs, at least the channel transformation is the fact that the traditional offline channel is shrinking rapidly, the proportion of online channels will increase. ”

Another media burst, the deep reason for layoffs is because of Ctrip internal competition, line online under each other grab resources. In the actual operation, some guests have already subscribed to the online Ctrip service, but offline sales staff through lobbying to make the guests cancel the original online order, so that the line staff can increase the Commission. However, the line personnel to eat the business of online personnel will inevitably cause online business dissatisfaction, resulting in unnecessary internal friction. At the same time, the existence of institutional loopholes makes it possible for the offline personnel to breed larger corruption through large travel agencies. The layoffs fully explain that Ctrip's business is not enough to support both online and offline teams. Ctrip has realized that offline sales have hindered the rapid development of Ctrip, began to change the destination.

To go to war with the net, to be accused of "profiteering"

In Ctrip also for the above "channel optimization" to clarify the occasion, January 25, where to go to the net issued an open letter, accusing Ctrip from where to buy Low-cost hotel after selling, diverted when "flips".

Where to go? The net in the open letter, said Ctrip before quietly online supplier hotel reservations, its price than Ctrip normal booking price of nearly half. Ctrip used to where the network of hotels low-cost advantage, from where to buy Low-cost hotels, and then to increase the price of reselling to consumers, this behavior has been for some time. Where are you going? The net related official said: "Where to go the network is investigating the incident, will retain the right to legal proceedings." ”

To where to go to the net of the above accusations, Ctrip related responsible person said: "This is where to take the speculation, we do not respond." ”

Recently, the tourism industry revealed that a number of international hotels under the pressure of Ctrip, collective refusal to come from where the net and Taobao orders. The industry pointed out that OTA competition has become an indisputable fact that multi-channel sales strategy in the hotel to harvest a large number of orders, but also make the contradictions between the various channels increasingly intensified. And the rise of platform mode and mobile Internet channel makes hotel revenue and channel management become more uncontrollable. In the online tour business price war, the merchant needs to purchase the cheap hotel, the air ticket and so on, the hotel side's price system was disrupted, more and more hotels began to the online tour merchant price war to have the conflict.

In this connection, Ctrip said, the hotel wholesalers through Taobao, to where to sell the flat price of the room is always the phenomenon. "With so many hotel groups adjusting some prices, we think it may be the hotel in the Spring festival season, based on seasonal characteristics and its own sales strategy to make decisions." ”

[Extended reading]

By peer siege, ticket business advantage no longer

If the layoffs are from Ctrip's "internal", then the share price falls more because of "aggression".

In the past 10 years, the online tourism industry has been gathering the art dragon, Mango nets and other leading position in the industry site. However, with the advent of vertical search engines, so that the original trade balance has been broken, many traditional channels of vendors must face the competitive pressure from the online platform, Ctrip's market share is gradually eroded.

Ctrip is most dependent on hotel reservations and air tickets booking two major business, in the airline ticket booking business, domestic airlines to do their own direct sales, commissions continue to decline, Ctrip profit also showed a significant downward trend, which is directly contributing to the stock price of Ctrip.

Analysis points out that the air ticket booking service accounted for about 40% of the total revenue of Ctrip, so the ticket discount plan may result in the airline ticket booking service revenue and profit margin pressure. T.h.capital, an independent securities research service provider, also reported that price competition had unexpectedly spread from the hotel reservation service to the ticket booking service. Ctrip's official website has now played "ticket full back to the countdown" ads. Because Ctrip every time the ticket discounts service will burn money, the first quarter Ctrip margin may bear pressure.

In fact, last July, Ctrip announced that it would invest 500 million of dollars in a one-year low price promotion. This makes Ctrip profit a lot of decline, Q2, Q3 earnings profit year-on-year drop 55% and 40% respectively. Ctrip, which was listed in the US in 2003, was once as high as $80, and is now hovering at $23 trillion.