Yi Long lost, Ctrip is opponents, but not the future

November 16, 2012, the Arts Dragon announced the third quarter of 2012 earnings. Earnings showed the third-quarter revenue reached 31 million U.S. dollars, an increase of 20%. Hotel customers between 4.6 million nights, an increase of 70%. However, the Arts Dragon Quarterly loss, net loss of 5.27 million U.S. dollars. It is the first time that Art Dragon has lost money since the fourth quarter of 2008. November 19, 2012, Art Dragon CEO Cui received the micro-interview with Snowball finance netizens. Some netizens ask the price of Ctrip to participate in the post-war period, art dragon this quarter loss; Cui answer the first goal of the Art Dragon is to win online hotel reservations, we will continue to increase marketing efforts. In the short term, profitability is not the goal of the Art Dragon. In order to gain long-term market share, we are willing to pay the price of short-term losses. We can look at the factors leading to the loss of the Arts Dragon. After analysis, the individual believes that the factors leading to the loss of art dragon are mainly two. One is the hotel reservations on the Unit Room Night Commission decline. The table below reflects the changes in the Unit Night commission of the Art Dragon in the last few quarters. From the table can be seen in the third quarter of 2012, Art Dragon Unit night commission fell more severe, only 34 yuan/room night. And last quarter there are 42/night, last year unit Room Night Commission also stable at 47-53 yuan/night. This year is slipping all the way up to the present 34 yuan/night. Arts Dragon in the third quarter reported that the decline in the Unit night Commission is mainly due to the increase in membership rebate and the number of group buying hotel to increase the amount of wine room night. Third-quarter bookings overnight growth of 24%, but the Hotel Commission has only increased by 2%, and the Unit Room Night Commission has fallen by 19%. Another reason is that the promotional costs of the art dragon have increased dramatically. Art Dragon Sales cost in the third quarter of 2012 reached 144 million yuan, an increase of 74%. The following table is the Art dragon in the past two years to change the cost of sales. Arts Dragon in the third quarter of 2012 sales accounted for 68% of total revenue, while the last fiscal quarter was only 46%. Art Dragon in the third quarter earnings reported that the increase in sales costs is mainly the growth of online market costs and some marketing activities growth. Therefore, in simple terms, the art of the third quarter loss is mainly due to online and offline marketing efforts to increase, as well as the increase in the rebate of member services. This is also the main reason for the substantial increase in the third quarter hotel bookings. These are related to the recent OTA price war. In recent months, online travel service providers (OTA) hit the price war, as early as June, Ctrip, Yi Long, mango nets, cool news travel network, cattle nets, the same way network and other online tourism companies have launched rebate promotions and other concessions. July 9, 2012, the traditional model of vested interest in the representative Ctrip announced a high-profile investment of 500 million U.S. dollars to carry out low-cost promotions, promotional activities from July onwards for a year, involving hotels, air tickets and tourist tickets. The art Dragon then declared war on its official microblog. Art Dragon'sPromotional ads also confront Ctrip, Ctrip buy No, we have, Ctrip buy some, we all hit 90 percent before minus 1 yuan. Art Dragon in this price war will carry Ctrip as an imaginary enemy, it seems to be a few years ago by Ctrip to defeat the disgrace, to regain lost ground, regain everything. Art Dragon Heart Has a knot, is Ctrip. Art Dragon people think, as long as they run Ctrip, they will be able to live a happy life. Ctrip, the boss of online travel, has recently faced a series of challenges stemming from the emerging patterns of online tourism that have hit its existing models. The rise of online travel search, which is represented by the Web, is based on the customer's specific needs and uses its search technology to search for results in suppliers, travel agencies and other sites. Users can also book directly on the online travel search site. The online search business model provides users with detailed search results, including user-specific needs, to meet user needs more clearly. So online search can get a larger share of the search traffic to the supplier or directly on the online search platform, and it is possible to bypass OTA directly. In addition, with the popularity of smartphones and ipads such as android,apple, mobile Internet generates huge traffic and business opportunities. Mobile Internet to create a lot of mobile applications, such as Hotel Flash shopping. Group buying business arose, but also provide hotel reservations group buying, to provide users with a lower discount. Ctrip has taken a series of corresponding measures to cope with the rise of the new online tourism business model. Hui-selected hotels on line; Independent Ctrip Hotel reservation application based on Android system; with the star air cooperation, customers can be directly in the Ctrip platform booking Jie star ticket, and the Capital Airlines launched a group purchase ticket service, hand booking to kill into the International hotel reservation field, on the line of the car rental platform; ...... The advent of new products is often greater. Of course, at the same time Ctrip also launched a price war 500 million dollars big rebate. If the single from Ctrip 500 million dollars big rebate, this is undoubtedly like the Qing government in the destroy all over the constant shape of the Revolutionary Party forces. But considering the price war and other Ctrip movements, the price war is just a small part of a big combination of thread's impact on the emerging online travel business model. Ctrip on the one hand through the price war to stabilize the morale, so that its market share will not fall badly, and on the other hand Ctrip actively seek to change, with a positive attitude to accept the emerging model, will own resources and emerging models of integration, to seek a smooth transition. When the opaque travel model is impacted by the transparent comparison search mode, the cement + mouse mode is not adapted to the new development, such as emancipating the mind, accepting things, seeking change, or having life. Such changes, such as the Russian serfdom reform, Lincoln abolished the serfdom, and eventually the transition of feudal system to capitalism, without the need for the so-called revolution and war to achieve. Anti-view, art Dragon Net, facing Ctrip price war, posing as a positive battlefield decisive battlePosture, vowed to fight the Life-and-death. Yi Long Network too much attention on the price, a short time may be effective. But the happiness brought by victory will not be long, happiness needs to find ways to retain. Art Dragon needs in the product and business model under the foot Kung Fu, do a good job of innovation, should carry Ctrip on the internet and the combination of the new business model, and will now put some lofty, do not need to focus on Ctrip, from the whole OTA development perspective to see the problem is to retain happiness. Art Dragon's three-quarter loss may be an accident, but if Ctrip led by the nose, the lack of a strong response measures, the loss will become inevitable from accidental. Quit, be careful!