China, global markets spur Priceline deal
Updated: 2014-08-13 10:36
By Jack Freifelder in New York(China Daily USA)
Priceline Group Inc's $500 million investment in the Chinese online travel firm Ctrip.com International Ltd fortifies an existing bond between the two companies and gives "great potential" for future cooperation, according to Priceline's President Darren Huston.
"Chinese bookers are one of the fast growing [groups] on all of our properties, and we think that this will only accelerate," Darren Huston, who is also CEO of The Priceline Group, said on Monday in an earnings conference call. "Of course tapping into China is going to be a huge benefit, both because [China is] a great source of bookings, but also [because] we are running a global business."
Under the deal, which includes enhanced cross-platform promotional efforts, the two travel-booking sites will offer the other's travel packages "in a reciprocal fashion," Huston added.
The deal between Priceline and Ctrip will give customers worldwide access to a pool of more than 600,000 travel accommodations - upward of 100,000 of which are located in the greater China Region.
In an Aug 6 press release, James Liang, co-founder, chairman and CEO of Ctrip, said: "The Priceline Group is the global leader in online accommodations, and as such, a key strategic partner for us as we look to expand our global footprint.
"Both our companies operate on the same philosophy to deliver exceptional products and seamless online booking experiences for our customers and we are eager to jointly invest in improving the experience for travelers worldwide," Liang said.
Priceline, founded in 1998 with its headquarters in Norwalk, Connecticut, is the world leader in online travel reservations and serves customers in more than 200 countries through six primary avenues: Agoda.com, Booking.com, KAYAK, OpenTable, priceline.com and rentalcars.com
Shanghai-based Ctrip, which started operation one year after Priceline in 1999, is one of the leading Chinese providers of online travel accommodation.
Henry H. Harteveldt, founder of the Atmosphere Research Group, a boutique research and travel advisory firm based in San Francisco, said he is "not surprised" about Priceline's decision to expand its partnership with Ctrip.
"We've seen Priceline make investments in a variety of different businesses to make it a stronger digital commerce player, and I view this as a logical continuation of Priceline's strategy," Harteveldt told China Daily on Tuesday. "Ctrip is an established brand and one of the two largest players in consumer travel with China."
"What this will do is give Priceline a meaningful stake in one of the largest travel markets in the world, but I think it's important to understand that this is not a merger or takeover and Ctrip is still very much independent," he said. "Ctrip is set up to do business the way Chinese consumers like to do business and Priceline will learn from it."
China accounted for more than 1.8 million visitors to the US in 2013, according to the latest full-year data from the National Travel and Tourism Office. And a 23 percent climb in Chinese visitor volume was far and away the largest increase among the top 10 international visitation markets.
Priceline's Huston said this collaboration will bring more guests to China and more Chinese to the rest of the world.
"Both sides retained a lot of flexibility in running our own businesses and [the deal] gives us a lot of options going forward but it comes down to a cultural match and whether we can work together to build trust," Huston said during Monday's conference call. "Five or 10 years down the road it would be hard to say you are global if you are not in China."
(China Daily USA 08/13/2014 page2)
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