Online tour providers start a war of words around "who is the lowest price"

Abstract: In almost two weeks, people have seen several big online tour service providers around the lowest price to start the war of words. Things originated on March 10, Ctrip (NASDAQ:CTRP) took the lead in convening a double low price guarantee, three times times the commitment to pay the press conference. Ctrip

In almost two weeks, people have seen several big online tour operators around the "who lowest price" of the war of words.

Things originated on March 10, Ctrip (NASDAQ:CTRP) took the lead in convening a "double low price guarantee, three times times the commitment to pay" the press conference. Ctrip announced that in the network booking conditions, to ensure that domestic hotel prices to the lowest market, otherwise compensate three times times the cash difference. The remark, stirred the waves. Six days later, Yi Long (Nasdaq:long) said that as long as the booking price than carrying Cheng, it will compensate 3 times times the difference. and Easy Netcom (AIM:ETC) under the Travel network, but also the hotel and air tickets to the Commission directly returned to consumers, including hotel rebate 8%, each ticket rebate 3% to 6%, to achieve the "lowest price" commitment. So, several large online booking platform around the "Low-cost" war from scratch, intensified.

The frantic parity of Taiwanese businessmen highlights the increasingly pressing transition pressure: The mere Commission model cannot last long, and only by improving the diversity of operational capabilities will it not fall into the mire of price wars.

In the past, Ctrip, art and other companies rely on the mode of innovation to solve the problem of multi-layer air ticket hotel, and got a huge profit. Once too reliant on the distribution platform, increasingly strong platform traders are likely to grow into the tourism of Gome and suning, apparently, hotels and airlines do not want to be led by the nose. In this case, in recent years, the hotel and the aviation industry has increased the intensity of direct marketing, Ping Taiwanese's right to speak is gradually weakened. Ctrip to the "lowest price" weapons, is the hope that consumers firmly in the hands, thereby enhancing the upstream of the right to speak and control power.

In the face of the platform's Low-cost manifesto, the hotel seems to be a little stand by. A Marriott staff told the author that in order to standardize the market needs, the hotel will take the initiative to maintain the price of each channel unified; The hotel will pay a commission for every customer it brings, and it has nothing to do with whether the Commission is returned to the consumer. 7 Days chain Hotel Group CEO Zheng said, Ctrip and the war between the dragon, just to prove its own direct channel is wise, even said, to be with some online travel distributors between the end of the contract, 7 days will be fully realized direct sales.

Ironically, this is supposed to be a tug of war between the platform vendor and the supplier, but it is now evolving into a price battle between the various platforms. However, this is partly reflected in the reality: In addition to prices, the domestic tourism intermediary platform is still lack of other core competitiveness. To know, rely on low prices to attract popularity only in the low-end market, to enhance customer stickiness, must provide more value-added, "Ctrip" transformation has been urgent.

2007, China in the International Aviation Association official record of the air ticket agents about 6,000, to 2009 years, this number has been reduced to 4,000 or so, within two years, about 2000 agents from the field of electronic ticket disappeared. Ctrip and other online platforms offering "price war" is to improve the entire ticket market concentration, however, "kill 1000, since the loss of 800", with the agent link profit space compression, intermediary operators are shifting the focus of the operation to the value-added services, from a single agent into a mixed operation of the product service provider.

In fact, Ctrip began a few years ago, "four-legged walking" attempt, tourism and business travel management can be seen from the air tickets and hotel reservations extended "value-added services." In the eyes of CEO fan, the second journey of Ctrip can walk well, the key lies in whether the company can expand the broad sense of tourism business.

So, Ctrip last year to build a "destination system", covering the road reception, off-site into groups, on-site management and other links, trying to get through the group and operators of the entire industrial chain, to provide one-stop procurement. Not long ago, Ctrip to 88 million of dollars in cash acquisition of the Hong Kong Yongan tourism tourism business, to mergers and acquisitions to accelerate the growth of the holiday business. 2009 earnings showed that Ctrip's income in the holiday business was 177 million yuan, an increase of 62% from 2008, while hotel bookings and airline bookings increased by 25% and 35% respectively over the previous year.

In addition to the expansion of business in the territory, enhance the site's user loyalty is also included in Ctrip's plan. At present, the company is on the homepage to promote the "Tourism Community" channel optimization, to provide travel guide, have asked to answer, together with the tour and other content, to promote popular community, increase the user's active degree.

Still, the share of the holiday business in Ctrip's overall revenue is not in the balance. On the one hand, the habits of online booking holiday products to be cultivated, the network direct marketing model is not high; On the other hand, to carry the existing resource allocation of Ctrip, it is not easy to do the product quickly.

After all, the holiday involved in a complex of catering and entertainment, the number and uncertainty far more than the hotel, even if the information is sufficient, one by one negotiation, the cost and the workload is also considerable; Moreover, if the local travel service provider's IT facilities can't keep up, how can ctrip update information in real time? More importantly, as a tourism referral platform, the expertise of the attractions is essential, such as whether to provide more favorable prices? How to create a richer product portfolio? Ctrip needs further study in these areas.

New products and services are still in perfect, the traditional business has encountered the "Red Sea", with the process, including Art dragon, Mango and other Taiwanese businessmen, all need to face up to improve the diversification of the ability to manage the problem. If the transition is not successful, relying solely on the Commission model, the past performance of Taiwanese businessmen may be unsustainable. For now, it is better for Taiwanese businessmen than they are to let their rhetoric and price wars burn their energies as soon as possible. After all, differentiation is the only way to win users and suppliers.