Deep dive into APAC online travel agencies – Part 1

There are 4.3 billion active internet users in the world. Over half of them or 2.2 billion are from Asia. A growing middle and upper class with travel as a popular lifestyle choice, mobile penetration, emergence of low-cost-carriers and smartphone adaption has made the region the fastest growing online travel market across the world.

With over US$386.4 billion in gross travel bookings, APAC has long been the largest regional travel market with online booking expected to grow upward of 10% for the next couple of years. With 40% of the bookings coming from online, no wonder this is the hottest market for the online hospitality players. According to a recent study by Allied Market Research, Online Travel Agencies (OTAs) are expected to grow higher over the next 5 – 6 years, even as direct travel suppliers, such as hotels, airlines and car rental companies are increasingly adding booking facilities on their website.

Consider this – according to IBEF, digital is expected to account for around 40%-50% of the total travel transactions in India by 2020 – for hotels, every third booking will be made online, predicts a report by Google BCG.  The market is presently dominated by MakeMyTrip-Goibibo – which accounts for 45% of all transactions, followed local players like Cleartrip, Yatra and global majors like Booking.com and Agoda. In China, Ctrip and Qunar combined control 53.6% of the total online travel market, followed by Fliggy with a share of 14.7%. The top three altogether took 68.3% shares of the online travel market.

Clearly online travel agencies are playing the dominant role in this unfolding story. In this multi-part series, we take a deep dive into OTAs in the region who are playing vital role in shaping the digital travel.

Ctrip

Over 180 million Chinese travellers are expected to take an international trip this year, and most of them are likely to book through Ctrip – the largest OTA in the country, and a global player in its own right. According to PhoCusWright, Ctrip is almost at par with Expedia and Booking.com in terms of gross bookings, and controls over half of online travel market in China. In a country with 100% mobile penetration, and 772 million mobile internet users, Ctrip’s app with rich content and location-based information has led the mobile booking revolution – 80% of its transactions are from the mobile platforms. The channel has over 300 million subscribers, lists 700,000 overseas hotels and as many within China. With its acquisition of budget OTA Qunar, Skyscanner, Trip.com and stake in Elong and India’s MakeMyTrip, Ctrip has emerged as the dominant player in Asia Pacific.

Agoda

Agoda, which has been one of the most popular online travel agencies in the region, started with discounted leisure hotel bookings across Asia, and continues to be a hotel-focused OTA. Headquartered in Singapore, and operating largely from Bangkok, the channel, owned by Booking Holdings, lists out 1.8 million properties including vacation-rentals and BnBs. With 22 million reviews from customers who have stayed at properties, Agoda is way ahead of its competitors on user-generated reviews, which can only be matched with Google or TripAdvisor.  In sync with the mobile-savvy APAC population, the channel has invested heavily into mobile app which currently accounts for half of all bookings made on the channel. The channel also shares its inventory with sister companies like Booking.com and Priceline to expand its global reach. However, unlike its parent brand, Agoda primarily relies on the merchant or wholesale model – where the property sets the net rate with OTA adjusting the markup.

Make My Trip

The earliest entrant to Indian online travel market, Make My Trip has been a dominant player since its inception. The recent acquisition of Ibibo Group’s travel business has made it the largest player in online air ticketing and hotel booking business. Leveraging big data and machine learning, the company has recently introduced an artificial intelligence-based chatbot Gia, which is serving up to 5,000 unique users post sales query daily. Last year, the company introduced Goibibo Express, a conversation-based app targeted at the entry level internet user which accounts for close to 100 million. The app available in both Hindi and English, allows users to book hotels, trains and buses. The Make My Trip loyalty programme, which has close to 800,000 subscribers is also driving repeat bookings.

As hoteliers, are you ready to tap into the Asia Pacific market? Are you managing these channels well and keeping them updated with rates and availability on a regular basis?

Reach out to us for your connectivity needs to make the most of your online revenue- https://goo.gl/3gKUJZ

Know your Chinese Guests


133 million Chinese travelers took international trips last year thats more than the population of Japan the worlds 10th most populous country. And if we consider the spending of Chinese travellers who spend nearly equivalent to what American, German and British tourists spend, its no wonder globally hotels are focussing on China specific marketing campaigns.
Chinese free independent traveller (FIT) has become the talk of every trade event and conference. With affluence and sophistication, more and more travellers are seeking experiences, and shedding tour operators. More than 70 percent of Chinese outbound travelers now plan and travel independently, a huge shift in their travel behaviour. According to a recent report, about 68% Chinese Independent travelers are millennials with high disposable income and education degree. And predictably, they prefer online.
Ctrip rules, and rules big
While traditional tour operators still get the biggest share of the pie, about 20% of all travel bookings are made online. That makes it about 26 million people who usually book online. After Ctrips partnership with Qunar, the local OTA giant – Ctrip now controls about 60% of China’s online travel market, well ahead its closest rival Alibaba Travel with 15% market share.
Mobile Booking
Internet in China is led by mobile, with about 731 million  people  using it to go online and that somewhat explains the emergence of mobile as a serious booking channel. According to a survey by 
Travelzoo, over 85% of their Chinese members rely on travel apps for the easiest way to book a holiday, and over 70% plan to book flights, cruises, package holidays and hotels via apps  a stark contrast from their European counterparts who have shown resistance to adapt to mobile.
The Social Network
Chinese have their own social network, and they are in love with them. Chinese Internet users spend majority of their time on social networks so if you are not visible in Weibo or Wechat, chances are that you are unlikely to capture their attention.
As China starts expanding its tourism industry, catch them early. The potential is enormous.
To reach out to Chinese Travelers, connect with us. We offer 2-way XML connectivity with all leading Chinese OTA and metasearch sites.

More power to Ctrip as Expedia exits China

With over 1 million transactions everyday makes Ctrip the largest OTA in China and a serious player in the online travel sector.  But with the latest news of Expedia selling its stake in eLong, China’s second largest OTA, shows that even a global giant is no match for the mighty regional online player. 

Last week, Expedia announced that it is selling off its entire stake in Chinese online travel company eLong to rival Ctrip.com International Ltd and other interested parties.  With Expedia’s share in eLong being 64%, this acquisition means Ctrip will have over 37.6% stake in eLong, making it the majority shareholder in the second largest OTA in China after CTrip.



In picture Fan Man (left), Co-founder, Vice Chairman and President of Ctrip; in a discussion with Vincent Lo, Chairman, Shui On Group at Fortune Global Forum 2013
To put things in perspective, Ctrip has a market share more than 6 times the size of eLong. After the acquisition, Ctrip with eLong will control over 60% of the Chinese online travel market, which according to PhoCusWrightestimates is pegged to be over USD 30 billionin 2015 excluding call center bookings. With online travel expected to grow in double digits, and accounting for only a quarter of total travel bookings, the scope of growth, needless to say, is enormous.

With Priceline’s$500m investment into Ctrip, the focus for Ctrip now shifts to newer and fast-growing rivals such as Qunar, Tuniu, and Alitrip, the travel arm of China’s largest e-commerce company Alibaba. Meta-search engines continue to be the greatest lead generator for Chinese OTAs and this causes concern even for Ctrip. Qunar – owned by China’s largest online search engine Baidu Inc – is considered the market leader in meta-search and the fastest growing travel channel and in 2014, Ctrip ended its strategic relationship with Qunar and prompting a price war between them.



For Ctrip, a strategic partnership with both Expedia and Priceline means access to broader inventories, which will help the channel to meet its objective of having wider product coverage. Already Ctrip has seen over 200 million downloads of its mobile application so far. Ctrip’s aim at the broader market has been quite visible for a while now. Earlier this year they entered into an agreement with Amadeus, whereby the GDS will provide content to Ctrip in international markets outside of China. With Chinese outbound travel growing at 20-30% buoyed by an increase in disposable income by the Chinese traveller and more flight routes and hotel inventory in new destinations will all help Ctrip capture the majority of these outbound bookings.

Over 100 million cash rich Chinese travelers are set to travel aboard this year in 2015. As more Chinese travelers travel beyond Asia, with strong branding and being a well-established online and offline channel make Ctrip best poised to benefit from the growing travel demand in China.  For the hotel industry trying to capture a piece this high growth Chinese market makes working with Ctrip a must.

Image Courtesy: FortuneLive Media, Ctrip
John Seaton is VP Sales, EMEA & APAC at eRevMax.  He can be reached at johns@erevmax.com