Which Two Segments Are The Biggest Contributors To Ctrip’s Growth?
The hotel and air ticketing segments are expected to contribute to over 80% of Ctrip’s top line growth till the end of our review period.
Ctrip’s Recent Efforts To Boost The Two Most Important Sectors:
Let’s take a look at how Ctrip is boosting the growth in its two leading divisions.
Hotels:
- In order to consolidate China’s domestic online travel market, Ctrip bought a ~40% stake in its erstwhile rival eLong from Expedia. It also entered into a partnership with Expedia to expand its global reach.
- Ctrip also completed a share exchange transaction with Qunar’s backer, Baidu. Ctrip can own a 45% stake in one of its biggest rivals, Qunar, post the completion of the transaction.
- The company’s partnership with Priceline had strengthened in 2015 and Priceline currently has the option of owning a ~ 15% stake in Ctrip. This alliance further bolsters Ctrip’s global expansion plans.
- In January 2016, Ctrip made an investment of $180 million in India’s largest OTA, MakeMyTrip, through convertible bonds. In addition, Ctrip can acquire MakeMyTrip’s shares in the open market and own up to a 26.6% stake in the company.
Air Ticketing:
- In April 2016, Ctrip entered into a strategic partnership with China Eastern Air Holding Company, one of China’s biggest air transportation groups and the parent company of China Eastern Airlines. Ctrip invested RMB 3 billion in China Eastern Airlines. The Chinese OTA might increase its ownership stake in the airline over the next twelve months and might be in a position to appoint a director to the airline’s board.
Have more questions about Ctrip? See the links below.
- What Is Ctrip’s Revenue And EBITDA Breakdown?
- How Has Ctrip’s Revenue And EBITDA Composition Changed Over 2012-2016E?
- Ctrip Q4 2015 Pre-Earnings Report
- What Drove Ctrip’s Revenue Growth And Led To Its EBITDA Decline Over The Last Five Years?
- Ctrip: Year 2015 In Review
- Ctrip Q1 2016 Earnings Preview
- Where Can Ctrip’s Growth Come From In The Next 5 Years?
Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Ctrip
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