Ctrip wastes no time bringing Skyscanner centre stage

Ctrip‘s better-than-expected first quarter earnings also reveal its commitment to developing Skyscanner‘s direct booking and marketplace capabilities during the year.

Skyscanner was bought by Ctrip last November for $1.75 billion.

Speaking to analysts, executive chairman James Liang said in his prepared remarks:

“We are working closely with [Skyscanner] to develop its direct booking capacity for air ticketing. In the future, Skyscanner will collaborate more closely with its business partners by allowing them to operate storefronts on its platform.

“The new approach will bring a seamless booking experience. The results of the early trials have been encouraging. Skyscanner has seen strong uplift in conversion rates, ancillary upsell and mobile bookings for all the partners.

“The direct booking facility will be fully available in the second half of the year. Ctrip will leverage Skyscanner platform to better serve travelers around the world.”

In the Q&A, CEO Jane Sun added that its work with Skyscanner “is moving much smoother and faster than originally planned”.

During the call, execs talked up Ctrip’s international expansion in context of the Skyscanner investment but also referenced its relationship with Priceline Group and MakeMyTrip.

Priceline Group, which has an investment in and commercial relationship with Ctrip, will help it with hotel inventory outside  Asia. Ctrip’s similar set-up with MakeMyTrip seems a long-term play, with Liang noting similarities between India and China, and between MakeMyTrip and Ctrip, both of whom are dominant in their respective markets.  The pair are sharing “knowledge, product and experience.”

India, Sun noted, is “10-20 years behind China”, and is currently the world’s second most populated country after China.

Its international ambitions appear secondary to the growth it still sees in China. Ctrip, he said, has always been strong in the major metropolitan areas of Shanghai, Beijing, Guangzhou and Shenzhen, but as China’s economy grows, so does the demand for travel in the so-called lower tier cities.

A big part of its presence here is offline franchised stores which sell inventory from Ctrip and other suppliers. It currently has around  5,500 outlets, and plans to open another 1,000 this year.

During the quarter, Ctrip’s net revenues were RMB6.1 billion (US$884 million), up 46% compared with the same quarter last year.

By business unit – accommodation  was up 28% at RMB2.1 billion (US$301); transportation ticketing up 48% at RMB2.9 billion (US$418 million); packaged tour revenues up 26% at RMB702 million (US$102 million); corporate travel up 25% at RMB144 million (US$21 million).

And it expects overall net revenue growth for the second quarter to grow 40-45%.

Ctrip didn’t give much away about its M&A strategy, other than the usual line about its willingness to partner with and invest in technology and product providers. When and if it does make another move, its “cash and cash equivalents, restricted cash and short-term investment” at the end of the quarter was $5 billion.

Related reading from Tnooz:
MakeMyTrip expands war chest by $330 million (May17)
Skyscanner’s take on the future of distribution (March17)
Is there any travel sector that Ctrip isn’t investing in? (Jan17)

NB Image by BigStock

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