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Hospitality October 12, 2012 | 0 Comments

Fly with me: China’s online travel goes social

China's social travel.

China's social travel.

China (and Buy Buy China) just celebrated Liberation Week with the help of China’s online travel industry. Getting in, out, and around contemporary China is not easy. Commentary depicts the fury of peak season, while state media declares a “golden harvest” of tourist activity. Domestic travel is still driven by physical tickets sales, especially for rail and bus. But the rise in leisure and business travel brought about a variety of online booking and fare-comparison sites, often integrated with social media. Here’s what you need to know. 

Online travel sales in China are predicted to triple from $15 billion USD in 2010 to over $45 billion USD in 2016. It is remarkable stat given that even in the mid-90s, 90% of mainland Chinese had not traveled more than 30 miles from their homes. Ctrip.com is one of China’s earliest and most influential online travel agents (OTAs). The site was established in 1999 and remains the market leader in terms of revenue. In terms of market share, Ctrip is not as dominant as it once was, faced with competitions from the likes of eLong and Qunar. Still, between them, Ctrip and eLong bring in more than half of China’s overall e-travel revenue.

As e-Commerce goes social, so does e-travel, and established operators like Ctrip are being pushed aside or integrated into horizontal social e-co-systems. These days, China’s most visited travel site is the recently launched go.qq.com. Owned by the ubiquitous Tencent, the site targets hundreds of million of users on the company’s QQ and Weixin platforms. Tencent’s success with both desktops and handheld apps make them well positioned to get information about fast moving ticket prices to their users. Tencent is also a major shareholder in eLong, and a bump in traffic from go.qq.com helps explain the site’s rising share of OTA revenue.

The second most visited travel site, Qunar, is backed by Baidu, China’s largest search engine and an aspiring e-tailer. Baidu provided Qunar with 300 million USD and, more importantly, gives it access to hundreds of million of users. eLong has already voiced concerns that Qunar will receive preferential treatment within Baidu’s “competitively priced” search rankings. While Baidu’s search products have taken heat from CCTV and netizens for perceived shady dealings, the company’s mapping and location services may be more crucial to successful integration. While Baidu search is losing ground to Qihoo, its maps are trusted and popular, especially on mobile platforms, and are gaining steam.

The future of China’s online travel agents seems bright. Outbound travel is expected to double over the next decade, and Chinese travelers are heading abroad for anything from luxury shopping and education, to cosmetic surgery and even childbirth. The domestic business travel market is poised become the world’s largest by 2015. OTAs not only make money off ticket commissions and hotel bookings, but are expanding their services to handle point of purchase for foreign hospitality giants like Wyndam and Best Western. And on top of all the new services and opportunities, a lot of value is still hidden in China’s traditional travel habits, most notably in the country’s infamous government-operated train ticketing service. As private travel sites handle more of China’s traffic, the People’s progress might finally move forward at an agreeable speed.

Image Source: JJ831

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