Ctrip plans to compete in US against Expedia, Priceline
Breaking into U.S. through acquisition would be an obvious strategy although it’s unclear whether that’s actually part of Ctrip’s seemingly very active strategic plan.
The world’s second largest online travel company Ctrip behind Priceline Group and ahead of Expedia Inc. is working on a plan to sell tours from the U.S. to destinations worldwide. It would start with excursions from the U.S. to China and Southeast Asia, according to a Skift report citing words from Tao Yang, a Ctrip senior vice president and head of its vacation business.
Ctrip held a North America partner summit on October 26 in New York, attended by bus operators, tour companies, hotels and attractions to mark Ctrip’s acquisition of major US-based Chinese tour operators this week.
Yang revealed that Ctrip took a majority stake in each of these tour operators for what the online travel agency describes as a marriage to form a Quartet focusing on Chinese travelers’ touring and visiting attractions in the U.S.
But that partnership is distinct from Ctrip’s strategic plan to create a U.S. point of sale to sell travel globally, and this would put Ctrip in competition in the U.S. with partners such as the Priceline Group and Expedia, Yang said.
Priceline has a 9.3% stake in Ctrip, has the right to bump that up to 15%, and provides Ctrip with hotel inventory to enhance Ctrip’s offerings to outbound Chinese travelers.
Expedia sold its majority stake in China’s eLong to Ctrip and other buyers in China in May 2015, and Expedia continues to have commercial agreements with Ctrip in certain markets.
Asked whether Ctrip would partner or compete with the Priceline Group and Expedia in the U.S. to further Ctrip’s U.S. point of sale strategy, Yang said the relationships would include elements of both partnership and competition, as is common in the travel industry.
Breaking into the U.S. through acquisition would be an obvious strategy although it’s unclear whether that’s actually part of Ctrip’s seemingly very active strategic plan.
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