In 2016 Q3, China’s online travel market realized a transaction size of RM209.82 billion, a rise of 55.6% year on year or 17.0% quarter on quarter, shows the Quarterly Monitoring Report on China’s Online Travel Market 2016 Q3 published by Analysys Industry Database.
1. From the industrial perspective, online-offline integration emerged as the major direction of industrial chain integration.
In 2016 Q3, travel enterprises enlarged the coverage of the industrial chain through online-offline integration. As to travel agency service, Lvmama.com bough the largest Chinese service station in Boracay and changed it to Lvmama Boracay Chinese Tourist Center; as to crossover cooperation, Joyu made a private placement of RMB700 million to Fengsheng Group to build the “tourism + real estate” mode; and as to resource acquisition, Ctrip.com made a strategic investment in Jiuqi Boutique Inn to promote the development of inns and family hotels. Analysys thinks that online tourism enterprises shifted the battlefield from channel to services, and the tourism experience based on online-offline integration will help enhance user retention and sharpen competitive strengths of enterprises.
2. From the market perspective, nonstandard accommodation and vacation tourism were the highlights during the quarter.
In 2016 Q3, the vacation tourism business attracted much attention, affected by the holiday, the Mid-autumn Festival, the National Day and other holidays. At the same time, Tuniu.com, Ctrip.com, Lvmama.com, Ly.com and other online tourism enterprises strengthened their competitive strengths with product discount and scenario marketing, and traditional travel agencies strengthened their business mix by launching segmented products. For example, Spring Tour formally released Spring Tour Customization. At the same time, nonstandard accommodation embraced an explosive growth. Tujia.com acquired Mayi.com, which triggered market competition, Xiaozhu.com, Airbnb and other enterprises all enhanced marketing expenses. In the opinion of Analysys, as Chinese residents earn more and more, tourism consumption has entered a diverse vacation tourism stage with recreation and vacation as the major demand, and nonstandard and vacation tourism with strong personalization will embrace vast growth potential.
3. From the capital perspective, outbound tourism, technology and finance emerged as hotspots.
In 2016 Q3, outbound tourism remained a major area that attracted the attention from investors, and investors made capital injections into The World’s 99, Ckditu.com, Xiyizhan.cn and other sites focusing on outbound free travel; into 8pig.com and Yitu8.cn and other sites focusing on the sharing economy in relation to Chinese special car and guides; and into Jhinno.com and Zhinanmao.com focusing on personalized tourism. At the same time, the investors also invested in Ziztour.com, 8trip.cn and other B2B enterprises; UUT specializing in SaaS; and Qiandai.com engaged in finance. In the opinion of Analysys, the outbound tourism market will grow rapidly in tourist base and spending amount, but Chinese tourism enterprises can’t satisfy the demand in overseas destination resources and service matrix and still need to enlarge the service coverage. Therefore, the tourism industry will accelerate the pace to go to the Internet, and the demand for big data, Internet of things and other new technologies as well as finance and other supporting services will give birth to more crossover cooperation and acquisition.
The online hotel reservation contributed 16.9% of the overall transaction size in 2016 Q3. Competition in the segment mainly broke out among Ctrip.com, Ly.com and Meituan.com. Ctrip.com integrated hotel resources of eLong.com and Qunar.com to increase the resource utilization efficiency and reduce the operating cost, and integrated the information chain in the hotel industry through Joint Wisdom to strengthen the IT application. Ly.com implemented its future hotel strategy and improved the user experience by allying with Beijing Tourism Group and the financial system of Alibaba Group. Meituan.com consolidated its hotel business in tier-3/4 cities and also attacked the medium & high-end hotel market to build a hotel reservation matrix covering consumers at diverse levels. Nonstandard accommodation emerged as a highlight during the quarter. After acquiring Mayi.com, Tujia.com entered into strategic cooperation with Ctrip.com and Qunar.com and obtained the apartment channel of the two partners. Xiaozhu.com and Airbnb also started marketing. Xiaozhu.com entered into cooperation with Meituan to jointly explore the new business format of “local service + accommodation sharing”, released the carefree accommodation, butler service, landlord settlement and other functions, and also did a series of work such as credit system and resource management. Airbnb received a new round of financing up to USD550 million and started building a more powerful local operation team in China. In the opinion of Analysys, users of the vacation tourism service will take a rising proportion of the overall tourist base, nonstandard accommodation will solve the problem of idle guestroom resources and also provide more choices for consumers with personalized accommodation environment and service, and the market will embrace a rapid growth stage.
The online vacation tourism market was the highlight in 2016 Q3 and made a bigger contribution of 12.8% to the transaction size, mainly because the transaction size grew rapidly, spurred by the holiday, the Mid-autumn Festival, the National Day and other holidays. At the same time, the industry integration kept deepening. Ctrip.com and Traveling Bestone became strategic partners to share stock resources, Lvmama.com acquired the largest Chinese service station in Boracay to strengthen ground services, and the vacation tourism startups received a far larger financing than other segments. Analysys forecasts that with the maturity of Chinese vacation tourism enterprises and the explosive growth of user spending, the online vacation tourism market will continuously increase the transaction size. At the same time, industry integration will continuously deepen, the market concentration trend will strengthen in 2017, and leading enterprises will further reinforce their strengths.
Analysys forecasts that China’s online tourism market will obviously go concentrated, major players will integrate horizontal or vertical resources through investment, acquisition, strategic partnership and other modes, accelerate channel and resource integration and thus increase the operating efficiency. At the same time, the industry will obviously evolve in the Internet direction and the online-offline boundary will continuously go obscure. Traditional tourism groups will be more stimulated to reshape their business on the Internet and upgrade their operating system, and market competition will no longer happen only in single dimension but in multiple dimensions.
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