According to study of Analysys, in the 2017Q3, the size of China’s online tourism market reached RMB244.084 billion, representing a year-on-year growth of 17.14%. In the opinion of Analysys, benefiting from the peak travel season in the third quarter, the transaction scale of China’s online tourism market recorded new heights this year, and the market still stood at the stage of stable growth.
1. Competition is severe in traditional peak seasons, and profit is the key consideration of commercial value
In summer vacation, all vendors increased competition for standard goods, such as air tickets, hotels, etc., and also made great efforts to expand new domestic and foreign tourist destinations and enrich SKU of local recreational products, thus upgrading their products and structures of online vacation tours.
In the 2017Q3, all major OTA set profit-making as KPI, whereby the market competition reached the stage of more rationalization. In aspect of market, vendors enhanced repurchase rate of new and old consumers through user refinement; regarding channels, vendors reduced supply chain costs by strengthening direct purchasing. In this quarter, such vendors as Tuniu and Ctrip realized quarterly profits.
Analysys insight showed that, in the wave of consumption upgrading, user demand has transformed from price orientation to product/service orientation. OTA strengthened user refinement and enhanced integration efficiency of industry chain. Such practice could help reduce marketing input and price subsidy, and enhance profitability while satisfying user experience and demands for excellent products and services more effectively.
2. All vendors overweighed the pattern of outbound tourism market, thus diversifying overseas strategies
On the one hand, vendorsconductedin-depth layout of global destinations through strategic cooperation with foreign travel bureaus; for example, LY.com signed a contract with Visit Norway, and Mafengwo.com jointly formulated official guidance with four travel bureaus in North Europe.
On the other hand, some vendors stimulated and satisfied the personalized tourism demands of users through content promotion of overseas destination based on scenarios and IP; for example, Fliggy created IP for Russian destinations and established the Union of Poles to develop the market of Polar Regions.
Some vendors provide diversified production selection for outbound travel users through big data; for example, UTS and Microsoft join hands to render outbound travel services based on cloud services, and Qyer provides back-office guarantee for route extraction of overseas travel products of tourists through PGC contents and AI algorithm.
As analyzed by Analysys, outbound tourism market has become a target of major vendors in the present market for its high customer price and abundant reserves of new potential destinations. Major vendors are creating the competitive pattern for full industry chain respectively through entering overseas niche markets of air ticket, hotel and vacation product. In future, outbound travel market will become the core driving force to sustain stable growth of online tourism, and also main competition scenario for major players of online tourism market.
1. Online transport booking market: It contributes to main transaction size. Vendors strengthen the supply of international air tickets.
From the aspect of market segment, online transport booking still contributed most to the transaction size, accounting for 69.69% in the 2017Q3.
In the fields of online air ticket, in the 2017Q3, all vendors further strengthened the supply of international air tickets on product and service terminals, and provided special offers of multiple international airlines for users, through launching international airline channels and flagships and establishing strategic cooperation with authorities of overseas hot destinations. For example, LY.com launched COGOO flagship store to provide more diversified resources of air ticket, and Fliggy conducted joint marketing with Hong Kong Airlines.
In the 2017Q3, online train tickets embraced a fast market growth driven by travels in summer vacation and returning to school.
2. Online hotel booking market: OTA made great efforts to provide additional services and frequency of homestay financing helped promote the industry development.
In the field of online hotels, many OTA vendors stepped up exploring consumptionpotential of customers and providing excellent supplementary services, and made in-depth integration of online hotel services and other tourism products, effectively increasing the incomes from cross-selling. For example, Ctrip launched the function of “hotel +X” to help hotels sell other supplementary service products than room booking.
As analyzed by Analysys, hotel booking services are being expanded to a wider and more diversified prospect of consumption. Rendering of supplementary services can, on the one hand, meet the increasingly diversified needs of customers, and on the other, enhance the overall gains of hotels. Accordingly, OTA can strengthen the back-end system reform and iteration efficiency of product optimization match based on increase of order quantity and transaction amount.
In the third quarter, online homestay was still a target of both capital and market. ebnb.com and onehome.me acquired a new round of financing, and zhuna.cn under eLong was launched. Meanwhile, in this quarter, the National Tourism Administration released the Basic requirements and Evaluation for Homestay Inn, and specified the standards for homestay industry as well as administrative norms and conditions for classification.
3. Online holiday tourism market: Travel enterprises and capital enterprises stepped up deploying the outbound free travel market
In the 2017Q3, vendors established overseas service centers, and promoted intelligent upgrading of scenic spots in terms of admission booking, scenic spot electronic information building, etc., which not only satisfied the personalized demands of free travel users better but also provided in-depth concurrent services for tourists in an all-round and professional manner. Besides, vertical startups also attracted capital for segment market of free travel. In this quarter, overseas free travel S2B platforms, Lanzhuxing.com and rruu.com acquired Angel and Round A+ investment respectively.
As analyzed by Analysys, destination tourism resources in the overseas travel market are highly scattered and segmented. Online tourism vendors promoted integration of product resources and optimized the user experience of free travel through technology and service upgrading, which also helped stimulate overseas destinations to enhance their level of Internet-based development.
Ctrip system enjoys leading competitiveness, increasing the competition threshold among channels
From the aspect of market pattern, China’s online tourism market share is further concentrated. Ctrip system represented by Ctrip and Qunar enjoyed a market share of 52.79%. The TOP3 players, Ctrip, Qunar and Fliggy, totally held a transaction share of 67.81%.
Through the study of Analysys, in the 2017Q3, the online tourism market developed rapidly along with the vigorous development of overseas market and increasing refinement of product operations. OTA giants put forth efforts to consolidate the “moat” effect, which increased the competition threshold among channels. Hence, the market concentration has become obvious increasingly.
For instance, Ctrip launched the column “Wan Zhuan Dang Di”, and its application Meishilin established strategic cooperation with “Koubei”, a local life service platform under Alibaba, which successively helped homestay inns along the trips access to Ctrip, Qunar and eLong, and compete for local leisure and recreational consumer market with Meituan Dianping. All indicated that Ctrip is sparing no efforts to consolidate its industry status in online tourism market.
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Industrial analysis provided by Analysys is made mainly based on macroeconomic industrial data, final quarterly user survey data, historical data of the companies, quarterly business monitoring information of companies, etc. by Analysys’s industrial analysis models with reference to market research, industrial research and company research approaches. And such analysis mainly reflects the market status quo, trends, break points and rules as well as the development status quo of companies.
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Analysys is a leading big data analysis company in the Chinese market. Since the establishment, Analysys has established the big data and analysis service ecological system cored by massive digital user assets and algorithm models. Analysys has been dedicated in providing product services such as digital user portraits and competition analysis and assisting in product operation for enterprises; and assisting enterprises in increasing revenues, saving expenditures, increasing effectiveness and evading risks by operation and management on digital user assets of the enterprises. The products in Analysys Family include Analysys Qianfan, Analysys Fangzhou, Analysys Wanxiang and Analysys Boyue. By September 30, 2017, Analysys had covered 2.19 billion intelligent terminals and monitored over 2.51 million mobile APPs.