Here’s Why Ctrip Invested In Three U.S. Tour Operators
Just a couple of months since its CEO hinted at a possible entry into the U.S., Ctrip had made strategic investments in three tour operators based in the region. Along with expanding its global footprints in the world’s largest online travel market, the move will boost Ctrip’s offerings in terms of destinations to its Chinese outbound travelers. Ctrip is the second largest OTA in the world currently with a market capitalization of ~$25 billion, exceeding Expedia’s market capitalization of around $19 billion.
The tour operators in which Ctrip invested are: Universal Vision, a bus tour operator and travel agency based out of New York, Ctour, a Los Angeles-based wholesaler and China group-tour operator, and Tours for Fun, a Los Angeles-headquartered online travel agency that concentrates on destination travel in the overseas regions. The possible reasons for Ctrip’s investments are as follows:
- According to Ctrip, Universal Vision and Ctour enjoy over half of the North American market share for Chinese travel. Tours for Fun is also a leader in its segment.
- As per the agreement, the four companies will work together in receiving customers, in supply and distribution of inventories, and in helping each other with their expertise.
- This is one of Ctrip’s moves to form alliances with global hotels, airlines, and tour operators to improve the quality of destination travel for its outbound travelers. In the past, it has entered into such agreements in regions including Asia, the Middle East, and Europe.
- Besides these recently formed partnerships, Ctrip has existing partnerships with both Priceline and Expedia in hotels, packaged tours, and airline services.
- The services provided by the tour operators will not only help travelers with their tour reservations in North America but they will also provide assistance with other services and help they might require in a foreign country.
- Ctrip is a market leader in China. In one of our previous analysis, we’d shown how its geographical expansion in regions such as the U.S. can bring about a significant upside for its stock price estimates.
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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?
- Which Two Segments Are The Biggest Contributors To Ctrip’s Growth?
- How Fast Is Ctrip’s Hotel Revenue Growing?
- How Can Ctrip’s Expansion In Geographies Like The U.S. Impact Its Share Price?
- How Did The Brexit Decision Impact Ctrip So Far?
- Ctrip Q2 2016 Earnings Preview
- Ctrip Continues Growing Though Its Bottom Line Remained Dampened Due To Investments
- What Drove Ctrip’s Packaged Tour Business In Q2 2016?
- Reasons Why We Upgraded Ctrip’s Stock Price By Almost 20%
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