Travel providers shift strategy

Updated: 2015-04-03 11:31

By Li Xueqing in Shanghai(China Daily USA)

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Chinese tourists will make up Priceline Group's top market amid an explosion in outbound travel, the US online travel provider said.

They currently rank No 7, up from 20th place a year ago, as they increasingly turn to sites like Agoda.com and Booking.com rather than relying on organized group tours.

"The Chinese traveler is the future," said Darren Huston, president and CEO of Priceline Group and CEO of Booking.com. "Ultimately it will become No 1."

He visited Shanghai on March 25 to meet business partners including Shanghai-based Ctrip.

Travel providers shift strategy

Darren Huston, president and CEO of Priceline Group and CEO of Booking.com

The group announced a $500-million investment in Ctrip last August. According to the deal, Ctrip merchandizes Booking.com's inventory for outbound travel, and Priceline Group merchandises some of Ctrip's inventory for inbound travel. In other words, they provide their hotel inventories to one another's customers.

Collaboration in car-rental and dinner-booking services is also included in the deal.

Priceline Group, founded in 1997 and headquartered in Norwalk, Connecticut is the world's leading provider of online travel and related services. It operates in over 200 countries and territories with six primary brands including Agoda, Kayak, OpenTable and RentalCars.

Ctrip is the largest Chinese online travel firm. It reported a net operating income of 7.3 billion yuan ($1.18 billion) in 2014, up just over one-third from the previous year.

The Chinese online travel market was worth 74.16 billion yuan as of the third quarter of 2014, up 25.7 percent from the corresponding period in 2013, according to Enfodesk, an Internet data-analysis service provider.

"In China, there are so many things moving in the right direction. In the West, about half of all travels are booked online. In China, it's 10 to 15 percent, and that's going to grow," said Huston.

Priceline Group is by far the largest online player for Chinese outbound travel among those who don't travel on a package tour, said Huston.

It has eleven offices in the country including a customer service center in Shanghai to provide around-the-clock service to its Chinese customers.

The group advises hotels outside China on what Chinese travelers expect, such as their preference for Chinese TV channels and electric kettles, said Oliver Hua, managing director of Booking.com for Asia-Pacific.

"They are excited," said Huston. "They hear the Chinese will start coming. They are wondering, do they have to change breakfast, or do the guests need tea instead of coffee?"

Ctrip is not Priceline Group's only partner in China. The group is cooperating with different companies including Mafengwo.com, a travel-oriented social media, and Baidu, the leading Chinese search engine.

"The Chinese outbound market has entered the outbreak period. No single channel can meet all the demands of the market. That's why we are cooperating with all types of channels," said Hua.

Huston also mentioned Priceline Group's interest in the Chinese domestic travel market.

"Finally, we also want to be successful among Chinese people traveling to China."

Chinese domestic travelers made an estimated 3.6 billion trips in China in 2014, according to the China National Tourism Administration. The number of trips overseas was recorded at 109 million, up 11 percent from 2013.

lixueqing@chinadaily.com.cn

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