Hotel distribution firm HaoQiao raises RMB 120 million
International hotel distribution company HaoQiao.cn announced that it has received RMB 120 million in its latest round backed by National Small- and Medium-sized Enterprises Fund and China Merchants Capital.
ChinaTravelNews, Yumi Zou – HaoQiao.cn, a B2B international hotel distribution platform, announced on February 21 that the company has secured 120 million yuan in its latest round participated by National Small- and Medium-sized Enterprises Fund and China Merchants Capital.
The announcement came a year after the Beijing-based company’s 60-million-yuan financing round last February. HaoQiao’s CEO Mr. ZhangTao Yu told ChinaTravelNews that the latest round was completed late last year.
HaoQiao, which still maintains a consumer booking channel on its website, shifted its focus after launching its B2B platform in April 2015 and worked on improving distribution efficiency to alleviate the procurement difficulties for small- and medium-sized travel agencies in China.
“HaoQiao.cn currently has about 550,000 hotels for booking, listed by more than 200 suppliers including hotel wholesalers, distributors, online travel agencies (OTAs) and ground handlers. These properties cover nearly 90% of the travel destinations worldwide. On the demand side, the company services about 6,500 distributors, mainly Chinese travel agencies, some travel management companies (TMCs) and some OTAs,” said Mr. Yu. The company intends to increase the number of distributors in its network to 10,000 this year.
Some analysts suggest that B2B-focused startups will be at the mercy of the OTA giants if they start out connecting with OTA sites single-mindedly, as the lion’s share of China’s online traffic is concentrated on the channels of the Big Three players – Baidu-invested Ctrip, Tencent-backed Meituan-Dianping and Alibaba-affiliated Fliggy.
In HaoQiao’s case, it chose to link up with small- and medium-sized travel agencies instead of the OTAs on the demand side. Mr. Yu said that the company’s platform revenue reached RMB 900 million in 2016 and nearly one million room nights were booked on the platform during the year.
“We are still in the red but we expect to break even in 2017,” Mr. Yu told ChinaTravelNews.
After Spain-based travel distributor Hotelbeds Group announced its plans to merge its bedbank unit with rival Tourico Holidays, an undisclosed Chinese OTA giant is also in talks to acquire UK-based B2B travel distributor GTA, ChinaTravelNews has learned recently.
An analyst commented that distribution platforms such as HaoQiao could be under pressure if the wholesale supply of overseas accommodation is centralized, giving the suppliers stronger bargaining power. As well, if a Chinese OTA acquires GTA and gains access to supply, the OTA that already has strong consumer traffic may become a de facto wholesaler and squeeze out these B2B businesses. (Translated by Jerry)