Analysys: Continuously Deepened Integration of Upstream and Downstream of Tourist Industry and Outbound Travel and Theme Travel Products Coming under the Spotlight in Q1 2016
The Quarterly Monitoring Report on Online Holiday Tourism Market in China for Q1 2016 published by the Analysys industry database shows that the transaction size of the online holiday tourism market in China in Q1 2016 reached RMB 16.67 billion, with an increase of 28.3% compared with last period, and an increase of 50.7% compared with the same period of last year.
The Quarterly Monitoring Report on Online Holiday Tourism Market in China for Q1 2016
published by the Analysys industry database shows that the transaction size of the online holiday tourism market in China in Q1 2016 reached RMB 16.67 billion, with an increase of 28.3% compared with last period, and an increase of 50.7% compared with the same period of last year.
Analysys analysis shows that, in Q1 2016, the online holiday tourism market in China maintained a stable growth; the integration of industry’s upstream and downstream was deepened continuously; the internet penetration rate of tourist industry increased continuously; and the outbound and theme travel market came under the spotlight.
1. Pilot projects for systems of online comment and management of tour guides and leaders, and enhancement of internet application by government’s supervision
Since the beginning of this year, the National Tourism Administration requires that guarantee, training and management of tour guides and leaders should be comprehensively promoted and that the pilot projects for reforming the system of management of tour guides and leaders should be carried out through combination of internet and tour guide supervision. At present, Tuniu, Lvmama, Ctrip and other main online travel platforms have established a platform for making comments on tour guides online, so as to provide a reference for users in selecting a tour guide and to compel tour guides to improve their service. Analysys analysis shows that tour guides, as the front-line person dealing with tourists, often lead to damage to user experience and tourism management disorder due to their insufficient service ability, non-standard service behaviors, etc.; and that, tour guides in question cannot be treated in a timely and effective manner, and it is hard for excellent guides to win public praise due to the feature of low frequency of tourism consumption; while with the online tour guide comment platform, the service level becomes the determiner for selecting a tour guide, thus emphasizing and increasing service value and enhancing the overall service level of the industry.
2. Horizontal integration of the tourist industry chain and concentration trend of industrial resources
In Q1 2016, horizontal integration of upstream resources of the tourist industry chain of China was carried out to enlarge the territorial coverage. The competitiveness was enhanced by improvement in the resource use efficiency. For example, Beijing HaiTao International Travel Service Co., Ltd. acquired Japan Service Company at the price of Yen 0.112 billion to enhance its outbound travel business planning; UTour International Travel Service acquired Huayuan International Travel Service to strengthen its wholesale businesses of outbound travel, thus forming the strong cooperation of “UTour + Bamboo Garden International Travel + Huayuan International Travel Service” and further enhancing the concentration of the wholesale market of outbound travel. UTour leads the wholesale market of outbound travel; in the downstream of the industry chain, JD Finance makes strategic investment in down payment paid travel, so as to enrich the usage scenarios of financial businesses via the tourist industry and enhance tourism finance experience.
3. Outbound travel and theme travel become focuses of the market
Under the background of increase in the tourist spending power of the Chinese tourists, the outbound travel market grows rapidly; meanwhile the theme travel market which focuses on segmented demands of users also comes under the spotlight.
In terms of funds, in the financing environment of fund tightening, most investment was made in outbound travel in Q1 2016. For example, Fxtrip, an outbound self-service traveling platform, obtained over USD 10 million in Series B funding; 6renyou, a customized outbound travel platform, obtained investment from Fortune Capital; Zouke was listed on NEEQ. In terms of theme travel, wandehai, a self-driving travel project owned by Imaitu obtained funds from Pre-A; Yoyoer (a platform providing travel service for the middle aged and the aged) and Shanghai Yousheng Internatinal Travel Service reached an agreement on merger; Aiwan Information owned by Ctrip obtained over USD 10 million in Series A funding; Laipao8 (a running service platform) obtained investment of RMB 50 million from UTour, Yaochufa, etc.
In terms of products, main online holiday tourism enterprises further enhance outbound travel market planning. Lvmama announced signature of a direct purchase strategy cooperation agreement with Costa, Royal Caribbean, Princess Cruises, SkySea and Star Cruises, so as to expand the cruise business. At present, it has 26 chartered voyages, so it is in the leading position.
4. Deepened self-service travel market planning of online holiday tourism service providers
With more experience of Chinese tourists in travel and improvement in transportation convenience, the self-service travel has become the main travel method. From the beginning of 2015, the online holiday tourism platform has continuously enhanced construction of regional service centers and destination product systems. Tuniu has 170 regional service centers in domestic destinations and 8 overseas service centers. At present, Lvmama has 64 regional branches and 1,000 stores in large and medium size cities in China, so as to provide support for purchase of destination products and users. Online holiday tourism enterprises continuously enhance construction of big communications product systems. In Q1 2016, Tuniu implemented the bus ticket channel, and deepened the strategic planning in the air ticket field with the help of capital combination of HNATOUR. It takes “air ticket + X” as the breakthrough point, enhancing the air ticket booking channel, meanwhile, the car rental channel of Tuniu was implemented on App. Tuniu has completed planning of “Last Kilometer” of the big communications, realizing full coverage of air ticket, railway ticket, bus ticket and bus rental.
In Q1 2016, Tuniu and Ctrip were still in the leading position, in terms of market share. Tuniu ranked first with the market share of 23.2%, while the market share of Ctrip was 22.4%. The total market share of Tuniu and Ctrip reached 45.6% in Q1 2016, showing a significant advantage compared with other service providers, so they were at the first tier.
The transaction size of Tuniu infor Q1 2016 was RMB 3.87 billion, with an increase of 80.0% compared with the same period of last year, maintaining strong growth, and its market share increases from 19.4% infor Q1 2015 to 23.2% infor Q1 2016. In 2016, Tuniu continuously enhanced construction of the ecological supply chain system. It implemented an open platform strategy for air ticket, hotel and theme travel businesses. It provided suppliers with data, technology and operation analysis and other supply chain services, by establishment establishingof lease finance companies, researching and developing into N-booking system (a supply chain management system), etc. In terms of integration of offline resources, HNATOUR completed the USD 0.5 billion strategic investment transaction with Tuniu in January 2016. Based on the strategic purchase agreement, Tuniu will obtain preferential prices for aviation, hotel, business airplane and other high-quality tourism resources owned by HNATOUR, meanwhile, Tuniu will continue to implement the direct purchase strategy to enhance resource infiltration. In terms of client, Tuniu continuously increases the product types, creating an online tour-ecology system covering big communications, self-service travel, package tour, consumer finance and other product types, meanwhile it enhanced brand building in market segment. After the launch of “Guaguo Family Travel” (a family travel brand), it created the brand of “Lekaihua Bama Travel” which is tailored to the needs of the aged for travel. Based on aviation resources of Capital Airlines, its strategic partner, it launched the “air ticket + pickup” product - “Capital Airlines - Tuniu Holiday” brand; in terms of customer service system, Tuniu created the “Tuzhi” brand, and will establish a membership service team consisting of 10 thousand members within 3 years and comprehensively upgrade the membership service system in terms of system.
The transaction size of Ctrip infor Q1 2016 reached RMB 3.74 billion. Ctrip mainly invested in outbound travel and global planning, infor Q1 2016. In January 2016, Ctrip made a strategic investment of USD 0.18 billion into Make My Trip, an Indian online travel company, as it regarded as important the high-speed growth potential of the tourism market of India and made early planning for the emerging tourist destinations under the background of the tourism year of China in India and the tourism year of India in China; In March 2016, Ctrip and UTour entered into a share exchange agreement. UTour acquired Huayuan International Travel Service, while Ctrip became a shareholder of UTour. Cooperation of Ctrip and UTour represented enhanced cooperation between resource providers represented by the online holiday tourism platform and traditional travel agency, thus completing the closed loop of the industry chain. As a result, Ctrip further deepened infiltration on the resource side.
The trade shares of Tongcheng and Lvmama in Q1 2016 were respectively 13.9% and 13.6%, with an increase of 4.2% and 5.7% compared with the same period of last year, so they were at the second tier.
In the second half of 2015, Jingyu Culture, the parent company of Lvmama, was listed on NEEQ. After that, O2O system construction and brand building were the main focus offor Lvmama development strategy. In terms of supply chain, Lvmama announced enhancement of the direct purchase strategy and further strengthened direct purchase and pre-control of scenic spot ticket, hotel, cruise, air ticket, railway ticket, pickup and other resources; in terms of cooperation with scenic spots, it interacted with nationwide scenic spots closely and frequently by cooperation with scenic spots in creating a festival, etc., so as to improve tourism experience. In terms of O2O system construction, Lvmama enhanced construction of offline branches. It carried out centralized purchase with the help of its online platform and offline subsidiaries, making full use of the advantage of synergy, while providing tourists with an integrated service from online booking to the destination; in terms of product system, Lvmama created a product system which focuses on self-service travel, based on IP and branding. At present, it has formed a product mix covering scenic spot ticket, resort hotel, vacation tour package products, air ticket, railway ticket and other product types of big communications, and offered Xiaolv Baitiao, Jinlvbao and other consumer finance services; in terms of brand promotion, Lvmama adopted the T2O strategy to enhance brand building, successively sponsoring Mamma Mia
, Funny Comedian
and other hot television programmes, meanwhile, Lvmama obtained RMB 0.8 billion through a private placement from Huace Film&TV and other organizations in February. The space brought about by capital connection has a large potential for integrating the “Film and television IP + tourism + internet”.
Analysys analysis shows that, competition in the online holiday tourism market in 2016 extends to the whole industry chain; the ability of the online holiday tourism enterprises to permeate the resource side and refined response to segmented demands of users are the core of market competition. Industrial consolidation will be continuously deepened towards the upstream of the industry chain.
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