China’s hotel consolidator DidaTravel raises $8 million
DidaTravel will continue to increase direct procurement of hotel resources, expand overseas sales and domestic offline channels after completion of the current round.
ChinaTravelNews, Yumi Zou - DidaTravel, a Shenzhen-based B2B hotel resource consolidator, announced on April 9 that it had secured 50 million yuan (around USD 7.9 million) in funding jointly backed by Shenzhen Capital and Guolong Capital.
This is the first investment since it was delisted from the New Third Board in October 2017. Weilve Wu, CEO of DidaTravel, told ChinaTravelNews in an interview that, after the completion of the current round, the company would continue to increase direct procurement of hotel resources, expand overseas sales and domestic offline channels.
In H1 2017, DidaTravel officially broke even with a net profit of RMB 4.26 million, up by 373.66% year on year. It also achieved a gross merchandise volume of more than RMB 550 million, representing an increase of 130%.
“Following the offline push in the second half of 2017, DidaTravel now serves more than 11,000 merchants on the street. Compared to having 80% of total turnover from OTA two years ago, DidaTravel’s current sales volume is generated equally through domestic OTAs, domestic offline merchants and overseas merchants (OTAs, travel agency groups, travel agency stores, etc),” said Mr. Wu.
“Overseas merchants want to get more supply in hotels in China,” said Mr. Wu. This is in relation to the recovering inbound tourism market.
China’s Ministry of Culture and Tourism data showed that visitor arrivals in 2017 totaled 139.48 million, an increase of 0.8% from 2016, and that the number of overnight visitors in 2017 totaled 60.74 million, up by 2.5% from the previous year.
A UNWTO Tourism Towards 2030 report has projected that the Asia Pacific region, notably China, will continue to be the fastest growing inbound travel destinations in the coming years. The report claims that China will become the world's largest inbound destination in the near future.
Overseas merchants face obvious challenges in directly accessing hotel room supply in China.
DidaTravel aims to help by connecting hotels and hotel wholesalers worldwide with OTAs and travel agencies via APIs or direct bookings from overseas sites that target corporate users. It also provides assistance in physical operations and IT systems.
Following efforts in the second half of 2017, DidaTravel has deployed a team of more than 20 procurement specialists at major destinations such as Shenzhen, Shanghai, Guangzhou, and Chengdu, and has signed with more than 1,000 hotels.
In addition, DidaTravel has placed direct procurement teams in Thailand, South Korea and Hong Kong, connecting with 2,000 hotels in early 2017.
“At present, direct bookings for local and overseas hotels on the platform is growing at above 30% on a monthly basis,” said Mr. Wu.
In the next two to three years, he plans to build DidaTravel into an international platform for B2B hotel consolidation.