Online travel continues to be high in tempo, burning money and competing fiercely

March 6 News, March 4 night, the passers-by released the fourth quarterly report and the full year earnings, and convened an analyst conference call. According to earnings data, in 2014, the net income of the cattle was 3.5 billion yuan (569.7 million U.S. dollars), an increase of 81.3%. But at the same time, total losses in the four quarters of the year, the net loss of 2014 reached 447.9 million yuan (72.2 million U.S. dollars), and 2013 only 79.6 million yuan (12.8 million U.S. dollars).

 


's previous earnings report also showed that, despite earnings in the first two quarters of last year, the same net loss of 269 million yuan in 2014 years, compared with a net loss of 168 million yuan in 2013. Ctrip and where to go have not yet released the 2014 annual report, but from two executives in the three quarterly conference call to see where to go last year four quarter and the whole year will continue to lose money, and has been profitable ctrip in the four quarter will also join the loss ranks. This means that four of online tourism companies will all enter the era of loss.


 


"The 2015 loss rate is expected to be narrower than the loss rate in the second half of 2014, the overall improvement in 2016." "March 5, Yang Jiahong, the CFO, said in an interview with the 21st century economic reporter, explained that last year, the cattle increased the brand investment and accelerated regional expansion, and will spend two years to maintain this input, once the important points are layout, investment will be correspondingly reduced, while maintaining a high level of growth. Where are you going? NET Chief Strategy Officer Zhao Yilu in the 2014 quarterly analyst conference call, also said where to go to the net is expected to turn around at the end of 2016.


 


However, an online travel company executive told the 21st century economic reporter that 2015 will be the darkness before dawn, the entire industry will continue to be 2014 years of fierce competition, the major online travel companies will not be less than 2014 investment. Udunder CEO in the Analyst conference call also said, because the high guest unit price attribute to the brand requirements are relatively high, so the 2015 will continue to be in advertising marketing and regional expansion of continued investment.


 


continued high input rhythm


 


Yang Jiahong said that the capital markets focus on growth, gross margin and loss rate, the current domestic online tourism development stage, the most concern is income and growth.


 


It is still the development logic of the online tourism industry in the 2015 to enlarge the market share by the strategic loss in time space. But slightly different is that, compared to the previous two years, mainly for front-end users of the contention, several companies will simultaneously expand upstream resources and peripheral resources competition. In fact, in 2014, companies have quietly completed the layout, 2015 will be the focus of the full advance of the year.


 


's earnings show that as of the end of 2014, 75 regional service centers have been set up in 73 cities nationwide. It is understood that the main areas of the pedestrian cattle have three major functions, service users, such as processing visas and deposit certificates, such as the procurement of resources, such as air tickets, now many two or three-line cities open non-stop overseas routes, marketing, advertising in the local media and so on.


 


last year, the Regional Service center became one of the biggest inputs to the cattle, and this approach to resources and users under the line has already been in effect. Yang Jiahong said that in 2014, 58 new regional service centers in the city in the fourth quarter contributed to the total turnover ratio from the previous 1% to 8.7%, this year December turnover ratio is more than 12%. It is expected that the regional service centre will be increased to 120 by the end of 2015.


 

Where's
going? NET last year began also no longer limited to only as sales channels, began to dabble in hotel self-management, set up a destination division, and Ctrip in the Hotel field to rob suppliers. And Ctrip is more generous, only last September, Ctrip announced strategic investment in Huayuan international travel company and become the largest shareholder, Huayuan is a European-oriented wholesale company; November, Ctrip and international well-known cruise company Royal Caribbean Cruise company to establish strategic cooperation, and jointly funded the establishment of a sea-day cruise joint venture.


 


According to the 21st Century Economic report reporter learned that 2015, Ctrip and where to continue last year's rhythm, in the supply chain continued to invest. In the future, the more resources there is, the stronger the discourse power and the more stable the barriers will be.


 


funds determine market position


 


like the Battle of the Electric dealers, the online travel companies to compete for market share, but also have to face the fact that huge losses.


 


The net loss of the whole year to 447.9 million yuan, according to this level, will generate financial pressure? In this respect, Yang Jiahong said that the cash flow is very good, the model is a pre-payment model, and Jingdong similar, from the user to the pre-payment to the vendor settlement there is a time lag; Meanwhile, since 2013, The bull has carried out a total of more than 300 million dollars in financing. But he did not respond to a new round of funding for 2015.


 


It is worth noting that the online tourism industry is experiencing a "burning money" war, 2015 still did not cool trend. For example, the cost of the last year significantly increased, earnings data show that 2014, the operating costs of the year-on-year growth of 222.1%, sales and marketing costs of 434.2 million yuan (70 million U.S. dollars), but also 294.5% per cent, the highest in several costs.


 


But this is also the current stage of online travel companies have to invest. Different from the electric business industry, the pattern is basically determined, for the situation is in a free-for-all, the pattern of the online tourism industry is undecided, the cessation of investment is almost tantamount to abandoning the "card position." Yi Long is an obvious example, last year, Art Dragon 2014 year sales and marketing spending fell 1% Year-on-year, its net income growth of only 8%, the third quarter even showed only 2% of revenue growth. Revenue growth has lagged far behind the four companies mentioned above.


 


therefore, in the next competition, the financial competition determines the company's future position in the market. Last December, the industry leader Ctrip CEO Liang Jianzhang even publicly announced that it would invest 1 billion yuan in price war, trying to intercept opponents.


 


It's not hard to understand, last December, Dang cattle and the same process set off the "war", the passers-by accepted the investment of Jingdong, Ctrip, its earnings data show that, as at December 31, 2014, the owner of the cash and cash equivalents, restricted cash and short-term investment of 2 billion yuan (317.6 million U.S. dollars), Compared to the end of the three quarter, an increase of 500 million yuan. According to industry rumors, the same process this year may restart the financing plan, but the news has not been confirmed.


 


as Yang Jiahong said, we are still in the pursuit of market share, short-term competition is still fierce.