Online tourism market because Priceline and Ctrip hand in the news and a stone stirred thousand layers of waves

Absrtact: Online tourism market because Priceline and Ctrip hand in the news and a stone stirred thousand layers of waves. Not only has Priceline become the focus of Wall Street and Bloomberg in the United States, but the collaboration of online travel boss Ctrip has also become an important event in interpreting its future trend.

Online tourism market because Priceline and Ctrip hand in the news and a stone stirred thousand layers of waves.

Not only has Priceline become the focus of Wall Street and Bloomberg in the United States, but the collaboration of online travel boss Ctrip has also become an important event in interpreting its future trend.

In hand talks, Ctrip announced the second quarter of 2014 earnings. Carrying Chengying received 1.72 billion yuan, an increase of 38.4% per cent, but net profit of 110 million yuan, down 40.5% year-on-year.

Revenue growth, a sharp decline in profits, but also highlighted the passive role of Ctrip in hand Priceline: Priceline coveted China's huge market potential, and Ctrip is the profit growth of the helpless bitter.

Priceline needs

Priceline is the American Jay Walker, founded in 1998 by a C2B business model tourism Service website, has developed into the world's largest online travel service provider.

Since November 2007, Priceline has been eyeing the Asian market. However, there is a point of view, Priceline in the Chinese market is not too big, mainly because the domestic high-quality travel resources are still relatively scarce, these resource owners relative to the consumer bargaining power higher.

At the same time, because the Chinese travel time is relatively concentrated in the statutory holidays, paid leave system has not been popularized, the consumer end of the Priceline "self-service pricing" mode of demand for power shortage. In addition, the travel product provider's operation refinement degree is not high, as well as the country to the related travel product such as the ticket price control, has caused the Priceline pattern in the domestic market development obstacle.

As a result, Priceline urgently needs to find a "partner" in China to serve as a springboard and spokesperson. You know, in the next five years, China's online tourism market demand is expected to continue to maintain double-digit growth, this cake who dare to give up.

and volume of Ctrip, by virtue of the previous years as the industry boss save the capital, although the profit growth rate in a row, capital operation space is not much, but still enough to support the next few quarters. Therefore, compared to other online travel companies, Ctrip walked into the Priceline vision.

For Ctrip, the overall operating profit decline is tantamount to the most drastic. Under pressure from a continuous slowdown in overall profit growth, especially in the holiday business, Ctrip seems to need capital markets to maintain its share price every quarter.

Earnings Show: "Ctrip first quarter net profit of 115 million yuan, the same period fell 25%." Operating profit for the first quarter was 71 million yuan, down 56% from a year earlier. ”

This is the four quarter of 2013, Ctrip has once again a sharp decline in net profits, the huge recruitment of people and the large rebate of wireless projects such as subsidies, so that Ctrip's financial situation has deteriorated.

At the same time, Ctrip's 2014 earnings show "holiday business income is 259 million yuan, 10% higher than last year", its business slowdown has lasted 4 quarters, year-on-year growth from the third quarter of last year's 43% all the way down to the first and second quarter of this year 10%, far below the overall industry growth level.

Air tickets, vacations and other key business of the continued slow growth so that Ctrip has to pay for the competition in the peer "investment comfort", hoping to maintain the existing market share. Last quarter, the surprise shares of the same journey and the cattle, and easy to use cars, Cicada travels and other competitors with money, the original issue of the 800 million U.S. dollar corporate debt estimates have been left.

"Global Travel" special commentator Li talk about Ctrip Non-stop and a lot of domestic and foreign buyers to talk about investment, said: "Ctrip is talking to Expedia and Priceline talk." Today, Ctrip's profits have slipped too much and cannot be dragged too long. ”