With the rise of the electricity quotient, each family is willing to pay big price war

However, the industry said that although the price war to allow each OTA (online tourist) bookings for 100% or even 200% of the growth rate, but with the price war caused by the decline in profits, loss of risk will follow, OTA is falling into a profit and market choice problem.

"From August 1 onwards, we will invest more than 80 million yuan, double the size of the hotel, launched the second round of promotional offensive." "Mango Net Hotel Department general manager Gaogo yesterday announced. July, Mango net has thrown "80 million yuan Hotel reservation subsidy" program.

Mango net of this promotion is directed to Ctrip and Art Dragon, will be fighting from low-cost budget hotels, burning to higher prices and higher profits of the star hotel.

In the face of such an offensive, Ctrip put down the "monopolist" posture for the first time, following last month's high-profile announcement of the "500 Million dollar big promotion" plan, Ctrip announced yesterday, Ctrip tourism products officially launched "Reviews return", free line, short-distance, self-driving products per night cash return of up to 101 yuan, plus the previous 1 Yuan pick-up, tickets " Buy one to get one "and other projects, Ctrip mainstream products. The art dragon followed up the price war.

Three big online travel giant pitched affect the entire industry's nerves, Taobao travel also in the recent launch of a large-scale online tourism promotion, to where, cool network, such as cattle network, such as the company successively joined.

Reporters interviewed learned that after the July low price war, some of the industry's booking growth is obvious, Mango net July hotel bookings increased by 260% Year-on-year.

However, a person familiar with the situation told reporters that the current mango, Ctrip and other published promotional investment quotas have been billion, in order to calculate, even if the hotel book volume doubled up also difficult to offset costs. Mango and Ctrip, arts and crafts promotion will lead to a decline in profits, or in the promotional period at a loss or at most flat, making money is difficult.

"The rate of commission for the average online travel business is around 15%, of course, Ctrip to higher, the previous promotions are hotel side funding, but now because OTA competition is fierce, so these rounds of promotions are OTA own money, so equal to sacrifice the Commission, to the above 15% average commission to see, Now the number of OTA's price wars has given an average return of more than 20%, that is to say, they should lose an average of 5% per cent of each room they sell. "said the person.

Mango, Ctrip, etc. also admit that the low price war does affect profits, sales promotion is hard to say. With Cheng reported that the first quarter of this year, its total operating income of 964 million yuan, an increase of 18%, but operating profits fell 33% Year-on-year, the chain fell 23%. With gang released in the second quarter results, the total operating income small growth, the net profit has been halved to 120 million yuan, a sharp decline of 55%, the level of Mao's interest rate continued to decline slightly, and operating cost rate continues to rise, overall profit margin is declining trend.

In addition to profits, there is a big question about the huge promotional budget from where?

"We see that in 2011, Chengying received 3.7 billion yuan, net profit of 1.08 billion yuan." If true as Ctrip said put in 500 million dollar promotion, is equivalent to Ctrip a year's revenue, this number is too high? Snowball Financial analyst Wu Sanmao pointed out.

In this respect, Ctrip said August 2, 500 million dollars refers to its current available reserves of cash, this money can be used as marketing expenses, but not now immediately to spend all the money, but in the future for a long time to support a variety of promotions.

"Under the loss of profits, but also to continue to invest, the key to see who's capital strength, simply to see who can support to the end." In fact, is very simple, in the past is a single ctrip, the situation, now more and more competitors, and we all learn smart, no longer with Ctrip recklessly, but do differentiated market segments, will be a piece of the market share of the loss, so that the share of Ctrip 1.1, so the major OTA in order to protect their customers, Have to knowingly lose money also want to promote, for IS Rob Guest and increase user stickiness. "Huamei chief knowledge expert Chang analysis.

Zhang Junlong, the relevant head of Jinjiang electric power, said price war is only a short period of time in the rapid attraction of a number of users of the marketing means, simple price war attracts only a group of unstable consumer groups, how to through the late good product experience and quality customer service to truly transform the consumer group into a brand loyal followers, This is what the OTA website really should consider.

Industry estimates that the price war could last until the end of the year. (Text/Le King)

With the rise of the electric business, the online tourism market also changed the previous Ctrip a single big situation, back to the "savage era", the families at the cost of a big fight price.

However, the industry said that although the price war to allow each OTA (online tourist) bookings for 100% or even 200% of the growth rate, but with the price war caused by the decline in profits, loss of risk will follow, OTA is falling into a profit and market choice problem.

"From August 1 onwards, we will invest more than 80 million yuan, double the size of the hotel, launched the second round of promotional offensive." "Mango Net Hotel Department general manager Gaogo yesterday announced. July, Mango net has thrown "80 million yuan Hotel reservation subsidy" program.

Mango net of this promotion is directed to Ctrip and Art Dragon, will be fighting from low-cost budget hotels, burning to higher prices and higher profits of the star hotel.

In the face of such an offensive, Ctrip put down the "monopolist" posture for the first time, following last month's high-profile announcement of the "500 Million dollar big promotion" plan, Ctrip announced yesterday, Ctrip tourism products officially launched "Reviews return", free line, short-distance, self-driving products per night cash return of up to 101 yuan, plus the previous 1 Yuan pick-up, tickets " Buy one to get one "and other projects, Ctrip mainstream products. The art dragon followed up the price war.

Three big online travel giant pitched affect the entire industry's nerves, Taobao travel also in the recent launch of a large-scale online tourism promotion, to where, cool network, such as cattle network, such as the company successively joined.

Reporters interviewed learned that after the July low price war, some of the industry's booking growth is obvious, Mango net July hotel bookings increased by 260% Year-on-year.

However, a person familiar with the situation told reporters that the current mango, Ctrip and other published promotional investment quotas have been billion, in order to calculate, even if the hotel book volume doubled up also difficult to offset costs. Mango and Ctrip, arts and crafts promotion will lead to a decline in profits, or in the promotional period at a loss or at most flat, making money is difficult.

"The rate of commission for the average online travel business is around 15%, of course, Ctrip to higher, the previous promotions are hotel side funding, but now because OTA competition is fierce, so these rounds of promotions are OTA own money, so equal to sacrifice the Commission, to the above 15% average commission to see, Now the number of OTA's price wars has given an average return of more than 20%, that is to say, they should lose an average of 5% per cent of each room they sell. "said the person.

Mango, Ctrip, etc. also admit that the low price war does affect profits, sales promotion is hard to say. With Cheng reported that the first quarter of this year, its total operating income of 964 million yuan, an increase of 18%, but operating profits fell 33% Year-on-year, the chain fell 23%. With gang released in the second quarter results, the total operating income small growth, the net profit has been halved to 120 million yuan, a sharp decline of 55%, the level of Mao's interest rate continued to decline slightly, and operating cost rate continues to rise, overall profit margin is declining trend.