Online travel price war upgrades

Absrtact: The price war in the online tourism industry is still continuing, and before the relatively passive price war is different, Ctrip has tried to take the initiative of price war in their hands, and the threshold of investment is also increasing. Recently, Ctrip announced the high profile will be smashed

Online tourism industry's price war is still continuing, and before the more passive price war is different, Ctrip has tried to seize the initiative of the price war in their hands, and the threshold of investment is also increasing.

Recently, Ctrip announced a high-profile announcement will be smashed 500 million yuan to create a "double 12" tourism shopping festival, Mr., a senior vice president of Ctrip, said in an interview with the 21st century economic reporter that the company's investment in expanding the market share, is the hope to be able to through a series of marketing costs of input, driving the current company is the main push of the "thumb + Cement "strategy, at the same time can consolidate Ctrip in the wireless side of the status and market share.

The Art Dragon, one of the leading players in the price war, also said it was preparing for a "double 12" promotional campaign, and the amount of money invested was also very impressive.

"Double 12" for mobile end

"Ctrip in hand, said go away." "This is the latest issue of Ctrip ads, and the company also first selected the domestic front-line star Chao endorsement company ads." According to the reporter understand, chao advertising fee has reached tens of millions of levels, and this is only ctrip this big wave marketing plan part.

In the "Double 11" day, tasted the number of hotel reservations and bookings between the night volume doubled the sweetness of Ctrip, planned in December to prepare a larger promotional activities.

Ctrip revealed that the information revealed, compared to the "double 11", Ctrip "double 12" the biggest difference is to be in the mobile end and the site to launch a one-month promotional activities, the content covers almost all the air tickets, hotels, tourism and other categories of vacation. According to Mr. 's description, in the one months of the hotel ticket included in the total advertising will be around 500 million yuan.

According to the Convention, the large-scale promotion of electronic commerce, flat Taiwanese businessmen will coordinate with suppliers, the effective integration of resources to achieve the best results, but "double 12" but it appears very hasty.

Mr. pointed out, "because the preparation is more hasty, and a lot of suppliers have not communicated contact, we first carry, do it first, I believe that next year if we do it in advance, we and suppliers, hotels will have better resources integration, next year, the activities will be bigger." ”

"There is no need to worry about money, more money can be a price war, or advertising." Mr. Admits.

In 2012, when Ctrip announced the cost of the war, the pocket was carrying a 500 million-dollar authorization line, the earnings show from the third quarter of 2012 to the third quarter of 2013, Ctrip from the 500 million U.S. dollar authorization has invested 1.5 billion yuan. Not long ago, Ctrip issued 800 million-dollar convertible bonds.

Whether it is 800 million U.S. dollars of convertible bonds, or invest 500 million yuan for one months of promotional carnival, Ctrip do all of this point to the "thumb + cement" strategy.

April 25 this year, the 6-year absence of Ctrip Liang Jianzhang again as Ctrip CEO debut, released a new version of mobile phone clients. At the same time announced that the Ctrip model will be from the previous "Mouse + cement" to "thumb + cement", gradually skip the PC side.

Since then, Ctrip has been a series of movements around the mobile end of the expansion.

"Double 12" activity is no exception, Mr. Frankly, the whole "double 12" promotion in the wireless end will have more activities to launch, hope that the activities through the mobile phone clients to increase the booking to facilitate the promotion of the company's wireless clients.

The price war will continue

Not only Ctrip, as Ctrip, one of the largest competitors of the art long network, is also closely preparing their own "double 12" activities. According to the company's sources, the art of investment in the dragon can not be small.

Ctrip into the price war also from 2012, when June, Ctrip, art dragon, mango nets, cool news travel network, cattle nets, the same way network and other online tourism companies have launched "rebate promotions" and other concessions.

The scale of the price war has escalated, and the direct reaction to the earnings is the decline in profits. From 2011 onwards, Ctrip income growth and net profit fell, 2011 and 2012 net profit margin of 31% and 17% respectively, the first quarter of this year, its net profit margin fell 26%, art Dragon is a continuous loss of 5 quarters.

But such a price war to consolidate the status of Ctrip, hotel overnight growth since 2012 began to grow, since the 2012 three quarter has been five consecutive quarters to maintain the rapid growth of about 40%, ticket business more than two consecutive quarters to maintain more than 30% high-speed growth.

The decline in net profits began to reverse as the share of subscriptions on the wireless side widened, with year-on-year growth of 76% and 92% per cent in the second to third quarter.

Ctrip from the challenge to the initiative, the attitude of change also indicates that the price war in the short term will not stop.

"Now is watching when the competitor stops, but I believe it will not be so easy to stop, if it can not survive, back to reduce strength, we will also reduce, from now on, next year's price war will continue to play, consumers will receive more concessions." "Mr. points out.