According to the data in the latest Quarterly Monitoring Report on China's Online Travel Market in 2016Q4 released by Analysys Industry Database, the transaction size of China's online travel market reached RMB 195.97 billion in the fourth quarter of 2015, with an increase of 44.4% over the same period last year.
For integration of online and offline business, Meituan Dianping and InterContinental Hotels Group signed a distribution cooperation agreement to achieve seamless connection of data. Three state-owned airlines resumed cooperation with Qunar.com. Joyu established strategic cooperation with Regalia Group to jointly build online celebrity hotels. Ctrip established strategic cooperation with Greenland Group to develop a self-help hotel brand of "G Hotel". LY.com announced the future merger and restructuring of Wanda Tourism Beijing. Ctrip achieved real-time docking with the vacation product databases and systems of Qunar.com and Travel Bestone and opened up the system of products and sales.
With respect to the expansion of "Travel+", Joyu, Fullshare and other companies jointly launched and established the Respublica Group; Everbright Bank and Tujia established strategic cooperation and jointly launched the "Everbright Tujia Joint Credit Card"; Ctrip announced the introduction of the "Credit Guarantee " service for outbound travel; Shanghai Bank, Ctrip and other enterprises established a consumer finance company; Ctrip entered the travel catering information services industry by launching a separate restaurant brand of "Ctrip Food Forest".
With respect to the upgrade of LiveApps, Alitrip.com launched the "Outbound Supermarket" to create one-stop outbound travel products which are officially selected. Ctrip launched the "First Class" special vehicle services according to the standard of first-class flight services, including high-end luxury car, infinite waiting, pick-up with a placard, one-million-yuan insurance and other four services. Besides, Ctrip launched the "Full-process X Plan" for one-stop linkage services. A user whose orders are packaged into a trip can enjoy one-stop linkage services.
Analysys believes that, due to the continuous improvement of online booking experience and the large-scale investment in marketing and promotion on China's online travel market, there has been a big number of users on the channel side. The process and efficiency of the production and design of offline travel products are improved through Internet technology. The new focus of market development has been the optimization of services. The continued integration of online and offline markets will enhance the Internet level of China's tourism industry as a whole, and will improve the efficiency of the tourism industry and the level of user experience.
In the fourth quarter of 2016, online reservation for means of transport still contributed to the main transaction size, accounting for 74.8%. As a main product type, online ticket booking accounted for nearly 90% of the transaction size of traffic products. Online train ticket booking business enjoyed a rapid development in recent years. On the one hand, high-speed rail construction has achieved the network coverage of tier one and two cities. Convenient, swift and high-density operation of high-speed rail has promoted the rapid growth of railway trips. On the other hand, China Railway constantly provides investment in the construction of the Internet ticketing and supporting system, driving the rapid growth of online ticket booking business.
2. The market of online reservation for accommodation enhanced the user experience by promoting the networked supply side.
The market of online reservation for accommodation accounted for 16.7% of the transaction size. In the fourth quarter, the competition between the main online hotel booking businesses was still very intense. The new Ctrip system occupied an absolute leading position in terms of user number, and their ability to negotiate on the supply side was improved. Besides, PMS and other back-end operating systems accelerated the networking of the hotel industry and provided new competitive pillars for online accommodation platforms. In the future, the competition between Ctrip, Ali and others through Joint Wisdom, Shiji Information and others will be more intense in terms of networking of hotels.
3. The integration of the online vacation travel market was intensified, and the online and offline markets were further integrated.
In the fourth quarter of 2016, the online vacation travel market accounted for 8.5% of the transaction size. After two-year rapid growth of China's online vacation travel market, the user number reached a high level and the traffic competition efficiency was reduced. The core of market competition will shift from the channel side to the resource and service side, and extensive growth will change into refined operation.
With respect to the market structure, the Chinese online tourism market shares have been further concentrated. The Ctrip system of which Ctrip and Qunar.com are the players accounted for 52.5% market shares, basically forming a group of diversified users, a three-dimensional business structure, and an integrated tourism ecosystem with an industrial chain channel side and a resource side which were both highly penetrating. For the shares of the top three, Ctrip, Qunar.com and Alitrip.com accounted for 65.9% market shares. Analysys believes that the overall profit margin of online travel is relatively low and that the user development cost is high. In addition to effective reduction of the average user development cost and improvement of the efficiency of the channels, the attraction of a great number of suppliers and the achievement of mutual business diversion and one-stop shopping through the platform model can achieve economies of scale and have a significant Matthew effect on market competition.
2. Technological innovation and market segmentation expand the space for survival of small and medium-sized enterprises.
China's online travel industry is in a high-speed development stage. Despite the rapid growth of the market size, it is difficult to guarantee the quantity and quality. There are a large number of blank market segments. In the context of consumer upgrade, the requirements for personalized travel modes and high-quality lines are increasingly higher. Thus, small and medium-sized tourism enterprises that focus on custom travel, theme travel and other market segments can avoid the immediate competition on comprehensive platforms and achieve rapid growth by providing services and creating reputation.
Besides, in view of China's widely distributed tourism resources, different levels of operation, low level of networking and prevalent inefficient operation, improving the existing business model and enhancing the efficiency of the industry chain through Internet technology have become a new direction worthy of investment. Venture companies provide solutions to tourism resource operators through technology development. Enhanced efficiency of the industry chain will be quickly transformed into corporate profits. Driven by consumer upgrade and less cost of the operators, the investment in new technologies will be an important way for small and medium-sized enterprises to participate in the online travel market.
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