Qunar sparks another OTA price war with hotel booking cash back
Qunar will undercut competitors by at least 10% in all their hotel prices via cash-back promotions, adopting a new slogan “one cent hotel”.
ChinaTravelNews –Qunar’s hotel operations are stirring things up with a price war yet again. It is revealed in a Qunar internal email that it will undercut competitors by at least 10% in all their hotel prices via cash-back promotions, adopting a new slogan “one cent hotel”.
Investigating Qunar’s price slashing
Expected to be the biggest giveaway ever in the industry, Qunar’s new online cash-back scheme, a follow-up to its previous customer poaching activities at hotel front desks to take customers from rivals, gives users a 30% cash back on their first online purchase with Qunar.
Figure 1: Qunar internal email outlining “one cent hotel” cash back strategy with price comparing chart
A chart in the Qunar email compares its lowest room prices with rivals eLong and Ctrip but our reporter found discrepancies in the figures.
Figure 2: Ctrip app displaying room prices for Modern Classic Hotel Shenzhen
Our reporter found the lowest room price, RMB915, at the Modern Classic Hotel Shenzhen on Ctrip’s app was much lower than the RMB1,200 cited in the email. It’s likely that Ctrip’s monitoring system discovered the price gap with Qunar and adjusted accordingly. For its part Qunar only lowered its price by RMB2 to RMB911 over a 13 day period.
This shows that Qunar’s rivals are reacting quickly to the high-profile challenge from day one. Qunar's move has triggered a tug of war that will escalate the price war among OTAs.
Qunar ready to pay any cost for high growth
Qunar refused to comment on the company email when contacted by ChinaTravelNews but a media source told our reporter that Qunar has leaked the information themselves to the press.
One industry observer said: “Qunar is marking Chinese New Year by once again targeting its rivals Ctrip and eLong in its aggressive bid for the lucrative hotel business. Qunar desperately wants to keep up a war of attrition at all cost to wear out its rivals and hopes to ultimately destroy them in a bloody ‘Gettysburg’ type battle. Qunar’s has never cared about losses. It only wants rapid growth.”
“What’s more, Qunar is even lowering commissions for its partner hotels, who in turn will introduce more guests to Qunar’s booking service they will also help push up their own rankings with the OTA,” he said.
(Translation by David)
(Reporting by Xianhao Zeng)
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Read related article: Qunar’s customer poaching riddled with “phantom sales”