The future of China's online travel market

[Mide Point Network] Ctrip mode, which is mainly based on air ticket hotel agents, is being replaced by multiple online tourism modes, and market competition has entered a fever. According to industry insiders, in fact, currently in...

[Mide Point Network] Ctrip mode, which is mainly based on air ticket hotel agents, is being replaced by multiple online tourism modes, and market competition has entered a fever.

According to industry insiders, in fact, the online travel industry has reached a state of complete competition, and corporate profits are very limited. The high labor cost and the increasingly transparent profit margin make the low grid strategy seem to be the only means of competition, and the final result of the price war may be that a considerable number of enterprises withdraw from the market, which is the inevitable competition of the industry homogenization. result.

The status quo: "Online travel market" is a combination of talents and competitions in the Central Plains"

Industry giants such as Sina, Sohu, Baidu and Taobao all increased their online travel business in 2009;

Qunar.com launched the third round of $15 million in venture capital in November and launched the construction of the world's largest Chinese hotel comment system;

A large number of hotels' self-built online marketing networks have also been doing well.

In August 2009, TripAdvisor, the world's largest travel review site, entered China, and the Chinese name was “to the Internet”.

Taobao officially stated in September: "The personal e-ticket sales section should be fully open to non-registered members."

The hotel “sells through its own website, allowing customers to directly face hotels rather than third-party agents, which is the best way for hotels to reduce costs and increase growth.”

In 2009, the biggest impact on the online travel market landscape was the travel search business. By searching for the price to disperse the source of customers, this will inevitably lead to the reshuffle of the entire tourism industry.

At present, portals, search websites and online travel vertical websites are stepping up the layout evaluation system to cope with more brutal market competition.

For many online travel operators, the "new Ding" attack at this time will undoubtedly increase the degree of competition in online travel competition.

The road to the future: business expansion to open up new revenue growth points

The online agents represented by Ctrip are mainly engaged in hotel reservations and air ticket bookings. They all charge commissions as the main profit model. The business homogenization phenomenon is serious, and the competition among online agents is very fierce. In addition, the strengthening of direct sales of upstream manufacturers in the industry chain and the emergence of vertical search websites have made the transparency of hotel and ticket prices more and more high, and the commissions have gradually declined, which has brought great impact to online agents. Under the dual pressure of channel and competition, online agents hope to expand new revenue growth points through the expansion of other businesses.

Since Ctrip launched the “Minimum Price” commitment in early March, the company has been controversial. From “low price door”, “mouth war” and “monopoly door”, Ctrip has become the focus of online hotel reservation industry. Now, with the emergence of the “zero profit” model, the price war in the online travel industry has reached its peak and “evil state”.

The Ctrip model, which is mainly based on air ticket hotel agents, is being replaced by multiple online travel modes, and market competition has become hot.

According to industry insiders, in fact, the online travel industry has reached a state of complete competition, and corporate profits are very limited. The high labor cost and the increasingly transparent profit margin make the low grid strategy seem to be the only means of competition, and the final result of the price war may be that a considerable number of enterprises withdraw from the market, which is the inevitable competition of the industry homogenization. result.

Looking forward to the new turn "the meaning of drunkenness is not in the wine"

First, integrate upstream and downstream industrial chains and strengthen channel control. Ctrip strengthens its control over hotel channels through the acquisition of hotel shares.

Second, through the acquisition of offline travel agencies and online travel websites, Ctrip's product line can be expanded to improve the holiday product business.

Third, open up new markets.

Ctrip's main business is in mainland China. Through the acquisition of Taiwan Easy Tour and Hong Kong Wing On business, it can help it develop Hong Kong, Macao and Taiwan and overseas markets;

Fourth, build multiple order channels. The mobile website will become another very important ordering channel after the telephone reservation and online booking.

Discover new profit growth points

"Ctrip has always felt that it is to make air tickets and hotel reservations. So far, these two major businesses are indeed the main source of Ctrip revenue, but in fact, Ctrip has two sections of vacation and business travel." Fan Min told reporters that the ticket The hotel business accounts for 70%-80% of Ctrip's overall business, while holiday travel accounts for 8%, but it is one of the fastest growing segments. “Ctrip needs to think about not only the advantages of extending airfare and hotel bookings, but more importantly, discovering new profit growth points.”

Ctrip focuses on expanding the profitability of the holiday tourism business. It plans to make four rounds of ticket booking, hotel reservation, holiday travel and business travel through 2-3 years. Ctrip's ultimate goal is still online - I hope Ctrip will become a large-scale online travel agency in the future.

Concern: Ctrip management interprets first quarter earnings

Yu Jin: What is the specific situation of the hotel booking business in the first quarter? How much has the booking volume increased?

Sun Jie: The hotel booking business increased by about 30% in the first quarter, mainly due to the increase in bookings. The commission for each room is stable overall.

Yu Jin: What is the ratio of online booking business and offline booking business?

Sun Jie: Online booking business is also increasing, accounting for about 1/3 of the total business, and 2/3 is offline booking.

Olsen: Will hotel bookings increase in the second quarter compared to the first quarter?

Sun Jie: Generally we compare year-on-year, so it should be said that it will be stable, at least not down. The economy has warmed up and the amount of travel will increase, so the price will be ideal.

"Competition fights for strength"

Whether it is Ctrip's "lowest price" or Xinding's "zero profit", if there is no core competitiveness to support, I am afraid that it will only stay on the slogan, and will eventually be abandoned by consumers because it cannot fulfill its promise. (Huicong Hotel Network)

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