Ctrip joins Priceline and Expedia as global giant
Leading OTAs Expedia and Priceline registered strong performances, but it was Chinese player Ctrip that achieved the strongest growth to become the third global giant.
The next few years are expected to see the rise of new key players in online travel bookings, such as Google and TripAdvisor, which are currently challenging OTAs in terms of brand loyalty and which are even posing a disintermediation threat in the travel industry. OTAs are expected to respond to this challenge by changing their business models, shifting their focus from that of pure online bookings providers to offering services throughout the travel experience.
The OTA that recorded the strongest performance in 2015 was Ctrip, which grew by an impressive estimated 58%, to reach gross bookings of $27 billion, driven by the booming Chinese domestic and outbound travel markets. Ctrip is today the third global OTA player, and is forecast to be able to challenge Expedia Inc and The Priceline Group for global leadership by 2019.
The rise of Ctrip determines a scenario in which Expedia is the dominant player in North America, The Priceline Group in Europe and Ctrip in Asia. Ctrip has so far been focusing on the Chinese market, which is today the most interesting globally in terms of growth, but in the next few years it could also start targeting international markets, leveraging its strength in the fast-growing mobile channel: according to company sources, in 2015 around 70% of Ctrip’s air and hotel bookings were generated by its app.
Ctrip’s position was further strengthened in 2015 by a share swap with Baidu, which gave the company a 45% stake in Qunar, and by the acquisition of a controlling stake in eLong as part of an investment group. The most important result of these two deals was the end of the price war in the Chinese travel market, which had had a very severe impact on margins until 2015.
Source: Companies’ annual reports, Euromonitor International estimates
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