Ctrip shows how to attain multiple benefits from superlative service quality
The Chinese online travel giant has taken a series of initiatives to support a traveler’s journey, and this is also helping in cutting down on cost of revenues.
ChinaTravelNews, Ritesh Gupta – Online travel company Ctrip is taking unprecedented initiatives to stand out in the arena of service quality.
Acknowledging its responsibilities that go beyond offering product choice and a frictionless sale, Ctrip’s senior management is focused on ensuring that its people and technology is there to support travelers post any transaction on its platform. So the focus is on being an ally during the consumption phase of the travel, too, being there even when something goes awry and helping out travelers diligently.
Ctrip is making efforts around putting in place a mechanism for customer suggestions and taking action and introducing traveler-friendly cancellation and refund policies.
Speaking during Ctrip’s second-quarter earnings call, Jane Sun, CEO of the group, stated, “Unrivaled service quality is the key differentiator between Ctrip and other players.”
As an established travel brand that would be completing 20 years in a year or so, Ctrip believes that it also faces more responsibilities. Considering the complexity associated with travel shopping, Ctrip has chosen to raise the service quality, first by admitting that travel, as a product, is time-sensitive and inter-connected. Second, travelers need to be assured about their safety, and third, by relying on 50TB of daily travel data the team makes diligent moves to ensure travel ends up being more convenient and enjoyable (for instance, cutting down on time need to search for suitable products).
The company claims that it answers around 95% of traveler inquiries within 20 seconds. Also, according to Ctrip, all of its customer service representatives are in-house travel specialists, rather than outsourcing call center operations to a 3rd party. Ctrip provides its customers sales and support service through mobile applications, by websites, by telephone or via e-mail.
Explaining the same, Sun said, “We have upgraded our service guarantee across a number of products.”
Citing a couple of initiatives, she shared:
• Ctrip is promising full refund for visa and even related air ticket fees in case a traveler’s visa application is rejected.
• The company’s air and hotel protection program supports free cancellation of hotel bookings, due to flight delays and cancellation. “If customers book both hotel and flight ticket from Ctrip under our platform, then they are fully supported (for cancellation),” said Sun.
• Going a step further, Ctrip has also chosen to support travelers, even if it is not contractually Ctrip’s responsibility. “Recently, we announced that when a customer’s booking cancellation policy state it’s a non-cancellable hotel room on our platform we will provide a refund assistance, which Ctrip will negotiate with the hotel to reduce the loss on behalf of our customers,” Sun mentioned.
Importantly, these initiatives are also helping Ctrip to cut down on cost of revenues, which has come down significantly from 25% in 2016 to 17% of net revenues last year. Enhanced efficiency of customer service is playing a major role in this, according to Ctrip’s senior management.
It is imperative for 3rd party online transactional platforms like Ctrip to stand out for customer support. In an earlier interview with ChinaTravelNews.com, Meituan, too, acknowledged the significance of service. “China (travel market) is a huge industry, very well-developed. How we can provide the best service would be a key factor. Meituan realizes that there is passion for travel, willingness to spend and there is a demand for high-quality experiences,” explained Steven Shu, CMO, Meituan Dianping.
Setting high standards in the customer service arena is understandable. Earlier this year, there were issues around online check-in via OTA sites, and this definitely cuts down the role of intermediaries in the journey. China Southern clarified that its decision to stop 3rd party sites from offering services such as online check-in is well within the ambit of what a contract entails and the decision to stop third party sites from offering advanced seat selection and online check-in services was misunderstood.
Still, for their part, OTAs like Ctrip are looking at playing a bigger role in the travel planning, buying and consumption phases. Other than customer service, another integral part of optimizing customer experience is the wide range of offerings to meet all trip essentials.
Sun referred to the recent addition of local activities and airport transfer services in certain markets and this initiative would be expanded soon. “This takes Trip.com another step closer to realizing one-stop trip shop capability and offering its customers a seamless end-to-end travel experience,” said Sun. She further added that
Skyscanner is already one of the largest travel platforms in the world. “Despite its large base, it saw nearly 25% global MAU year-over-year growth in the quarter. Growth in direct booking of Skyscanner continued with 600% year-over-year growth,” she said. Product development expenses for the second quarter of this year went up by 11% to US$340 million when compared with last year.
Ctrip has also expanded its multi-mode transportation offering - air plus train, air plus bus, train plus bus and other car services etc. for a seamless door-to-door travel, said CFO Xiaofan Wang.
Despite that the growth rate of the Chinese economy is slowing, Ctrip’s James Liang, Executive Chairman of the company, sounded confident. “(We are) still very optimistic the overall travel consumption,” he said.
In its annual report, Ctrip mentioned that China’s domestic travel spending grew to RMB4,566.1 billion last year, representing an annual growth rate of 15.9% when compared with 2016.
Ctrip expects net revenue growth to continue at a year-on-year rate of approximately 13%-18% in the third quarter.