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Travel Agencies

Domestic trips, booked
on mobile, drive value
 
Driven by the sharp brand value rise of Ctrip, the online travel site, the travel category increased 46 percent, tying it with the education category for value appreciation leadership in the BrandZÔ Top 100 Most Valuable Chinese Brands 2017.
 
The category value growth resulted from the 32 percent value rise of Ctrip, China’s travel agency leader and a pioneer on online travel services. Chinese tourists spent $87 billion on online travel purchases in 2016, up 34 percent year-on-year, according to Ctrip. And most of the online transactions happened with mobile devices.
 
In addition, a new travel brand, Caissa, entered the BrandZÔ China Top 100, this year, based on its success meeting the travel aspirations of China’s rising middle class. Owned by the same corporate parent as Hainan Airlines, Caissa focuses on serving Chinese travelers seeking a more personalized experience rather than the traditional group tour. It intends to integrate Hainan flights with upscale accommodations and entertainment, particularly for outbound travel.
 
Outbound slowed to 4.3 percent growth in 2016 because of China’s weaker yuan and the threat of terrorism abroad. Domestic tourism spending increased 3.8 percent in 2016, according to the China National Tourism Administration (CNTA). Domestic tourism is one of the government’s levers for driving consumption, a national priority. Initiatives including rapid rail connections, budget airlines, and improved tourist facilities support this goal.
 
Ctrip acquired the UK-based Skyscanner, an online travel booking service, to help strengthen its overseas business. Almost a third of Ctrip’s ticket sales are to international destinations, but customers are much less likely to use Ctrip to book overseas accommodations. Ctrip bought rival Qunar in 2015. Revenue increased substantially based on this purchase, the acquisition of two American agencies, and investment in India travel site MakeMyTrip.
 
These acquisitions, and the fact that Priceline.com holds a large stake in Ctrip, positions the company to be a global competitor, perhaps specializing in Chinese travelers, but not serving them exclusively. CITS, a State Owned Enterprise (SOE), with tourist offices throughout China, declined in value.