Ctrip Is Currently Focusing On This European Country For International Expansion

by Trefis Team
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A few days back, we spoke about how China’s leading online travel agency and the world’s second largest OTA (in terms of market capitalization), Ctrip’s investment and acquisition strategies differentiate it from other online travel players. Ctrip follows its unique strategy of acquiring or partnering with entities that complement its existing portfolio and also entities whose growth strategies are in sync with its own. Towards that end, the company generally focuses on domestic companies that help consolidate its position in China, companies that might cater to its outbound Chinese travelers, entities in growing travel markets closer to home, like East Asia, and companies that will add on to its existing market share in a segment where it already has a stronghold (such as Skyscanner for air ticket booking). However, recently, Ctrip seemed to have grown interested in Spain. A couple of developments over the last few days show that Ctrip might be eyeing Spain for further expanding its global footprints.

Ctrip’s Tie Up With Madrid Region Tourism Bureau

In early June, Ctrip signed a strategic alliance with Madrid Region Tourism Bureau to explore further destination marketing and product development scope in the future. Madrid has emerged as a popular travel destination for Chinese travelers and its rich background in football, culture, and history makes it a potentially bigger attraction site for Chinese tourists in the future, as well. Ctrip might help promote the destination even further with resources such as attractive hotel and airfare deals or packaged tour booking options. Currently, Madrid has started making a series of online destination marketing advertisements along with Ctrip, which will be aired towards the second half of 2017. There will also be offline advertisements to attract different strata of the Chinese travelers.

Ctrip Strengthened Partnership With Spain’s Leading Hotel Group, Melia

Also recently, Ctrip announced the strengthening of its existing partnership with the largest Spanish hotel group, Melia, to share expertise and knowledge in areas including big data, product, services, and marketing techniques. Melia is one of the most famous international hotel chains in Europe with around 400 hotels spanning across 40 global locations. The partnership might prove valuable to Ctrip’s Chinese outbound travelers looking for hotel options while traveling in Europe. In the past, the partnership between these two entities has facilitated Melia in opening its first two hotels in China, namely, the Melia Jinan and the Gran Melia Xian. Melia wishes to increase its brand awareness among the Chinese travelers through the strengthened partnership. Ctrip, in turn, will be able to offer better services to both its local and overseas customers through the partnership. More hotels from the Melia Group is expected to be added to Ctrip’s ‘Chinese Friendly’ program in the future. A new program called ‘Friends’ will be launched by Melia Group in order to offer customized services to the Chinese travelers.

Why Is Ctrip Interested In Spain?

According to data gathered by Ctrip, Spain’s popularity as a tourism destination is surpassing that of other European regions such as France and Italy. The above agreements might help Ctrip in capitalizing on Europe’s popularity among its customers, especially Chinese overseas travelers, in order to further build a larger customer base for itself.

Ctrip is especially interested in pleasing its outbound Chinese traveler base which is said to comprise of the largest group of outbound travelers and largest group of spenders, among all countries across the globe. According to the China Tourism Academy, Chinese outbound tourism grew by 4.3% y-o-y to 122 million travelers in 2016. The total spend by these travelers is estimated to be around $109.8 billion. The ease of outbound travel in China is further increased by the ease of visa requirements in many destinations, increased flights, and affordable packaged tour availability.

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