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Qunar’s “customer poaching” heats up cutthroat OTA war

12/15/2014| 11:14:36 AM| ChinaTravelNews 中文

Qunar is tempting hotels’ with zero commission and e-currency for every converted booking. Customers and hotels stand to benefit from the campaign and Qunar will gain room nights, albeit at heavy campaign cost and no additional revenue.

ChinaTravelNews – Qunar is undertaking a “RMB1,000 gift” campaign to boost its room night booking volume by converting customer bookings to its network as they are checking in at hotel front desks. ChinaTravelNews found from the campaign’s promotional SMS that it targets hotels’ direct sales customers and sets out to convert those who have made bookings via rival OTAs Ctrip, eLong and Meituan.

Benefits outlined in Qunar’s “RMB1,000 gift” Promo SMS

When asked by ChinaTravelNews about the campaign, Qunar’s PR department denied any knowledge. ChinaTravelNews understands that the “customer poaching” is conducted with Qunar providing an e-booking QR code for partner hotels’ back-end systems that customers can scan when checking in. This code will bring users to Qunar’s HTM5 booking page where they can enter the hotel name and the agreed room rate. Upon check-out, they will receive the bonus coupons(including RMB30 for accommodation, RMB10 for attractions and RMB60 for taxi fare).

Qunar’s e-payment page

Poaching target: three Ctrip or eLong customers a day

As hotels’ collaboration is vital to this audacious campaign, Qunar is tempting them with zero commission and e-currency, redeemable for free communication and advertising on the Qunar platform, for every converted booking. Customers and hotels stand to benefit from the campaign and Qunar will gain room nights, albeit at heavy campaign cost and no additional revenue.

Yet this is merely a Trojan horse ploy to infiltrate the sales channels of hotels and rival OTAs and to incite mass defections of customers to its own booking channel. “Qunar’s destinations division has ordered staff to station at hotel lobbies and meet the daily target of converting three Ctrip or eLong customers,” a senior hotel source involved in the project told ChinaTravelNews.

Qunar set up its destinations division in January this year with the task of recruiting offline hotels. The division’s rank has swollen to 2,000-strong, comprising mainly sales staff hired locally.

The source said the campaign began in early December and covers pay-as-you-go and pre-paid payment models. The former model targets hotel guests who book low- to mid-end hotels in second- and third-tier cities through rival OTAs. Check-in guests scan the QR code to make online booking but payment is still made at the hotels’ front desks. The pre-paid model targets guests who book guesthouse rooms in destinations or third- and fourth-tier cities through group-buy sites like Meituan. Guests scan the QR code at the front desk and pay online through Qunar’s booking page. As customers receive no penalties for canceling group-buy bookings, the conversion cost for customers for the latter model is lower than the former.

Hotels’ walk-in guests are also becoming a new target customer source for Qunar. ”We are not stealing business from other OTAs but cultivating offline customer sources,” Qunar’s CEO CC Zhuang said at the Q2 fiscal report telephone conference. “Walk-in guests generally make up 30%-50% of hotel business and presents a sizable market for us to tap,” he said.

Ctrip sees few cancellations yet

Ctrip questions the legitimacy of Qunar’s move. “Qunar sent their promotional information to hotel front-desk staff and managers offering them ’benefits’ like e-currency. It is a form of bribery,” a Ctrip spokesperson said. As to the impact of Qunar’s campaign, the spokesperson replied in writing: “Not many hotels are participating in Qunar’s campaign now and we are not seeing a big change in cancellation rates. But we will continue to monitor the situation and will decide on counter-measures in view of market reactions.”

(Report by Jianjun Yao)

(Translation by David)

Read related article: Qunar's customer poaching riddled with phantom sales

TAGS: OTA | Qunar | price war
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