On May 3rd, the Ministry of Culture and Tourism released travel data for the holiday period, showing that domestic tourists reached 274 million and the domestic tourism revenue hit 148.06 billion yuan (US$21.41 billion), both surpassing the same period in 2019.

Online travel platforms, including Ctrip, Tongcheng, Tuniu, and Fliggy, also reported record-breaking data for the Labor Day holiday.

Scenic spots saw a 9-fold increase in ticket sales compared to last year.

According to Ctrip’s “2023 Labor Day Travel Data Report,” the top five popular scenic spots were Shanghai Disneyland Resort, Humble Administrator’s Garden, Huangshan Scenic Area, Mount Emei, and Mount Hua.

Family tourists, particularly those with children, contributed significantly to the surge in visitors, with theme parks, zoos, and museums accounting for more than half of the top ten popular spots.

The preference of tourists diversified during this year’s Labor Day holiday, with a more robust demand for high-level cultural products. Museums such as the Palace Museum, the National Museum of China, Shaanxi History Museum, and others saw their ticket sales fully booked for several consecutive days. Immersive performances, river cruises, and intangible cultural heritage shows were also in high demand.

Cross-provincial travel accounted for more than 70% of hotel bookings, with the average distance traveled by tourists increasing by 25% compared to last year. This year’s holiday saw a trend towards longer trips, with group tours lasting five days or more making up 30% of bookings, up from 20% in 2019.

Besides traditional popular destinations like Beijing, Shanghai, and Hangzhou, smaller destinations like Zibo also witnessed a surge in popularity.

Driven by the phenomenal popularity of “Zibo Barbecue,” hotel bookings in Shandong Province increased nearly threefold compared to the same period in 2019, with Zibo’s hotel bookings increasing more than tenfold.

Experts predict that while the domestic tourism market will stabilize after the Labor Day holiday, the summer peak season will see another surge in student and family travel. However, as some tourists opt for outbound travel during the summer, the domestic tourism heat is expected to be less intense compared to this Labor Day holiday.

To maintain the positive momentum in tourism consumption, local authorities must continue to innovate their offerings, implement more precise branding and marketing strategies, and continuously upgrade their service levels to promote the role of tourism consumption in economic growth.

Gen-Z Insights: capturing attention of China’s post-95s consumers

Domestic tourism revenue during this period reached 375.843 billion yuan (US$73.29 billion), up 30% year on year, and recovered to 73.1% in the same period of 2019.
During the CNY festival, 10,739 A-level tourist attractions were opened normally, accounting for 73.5% of the total number of A-level tourist attractions in China. About 110,000 mass cultural activities were held nationwide, with about 473 million participants.

The 243 national-level night culture and tourism consumption clusters have 52.122 million visitors, with an average of 30,600 passengers per night in each cluster.

The number of tourists received by Sichuan province ranked first, reaching 53.8759 million, and the tourism revenue reached 24.216 billion yuan, up 24.73% and 10.43%, respectively, year on year, recovering to 89.73% and 84.75% of the CNY 2019. Compared with the total tourism revenue, Yunnan contributed 38.435 billion yuan of tourism revenue in seven days.

According to Qunar data, each traveler traveled 400 kilometers more than last year, and the outbound air ticket was 6.7 times more than that in 2022.

As of January 26, during CNY in 2023, the number of air tickets booked in popular cities had exceeded that before the epidemic (the CNY in 2019).

In 2023, the average price paid for air tickets during CNY was 845 yuan, the same as before the epidemic.

According to Qunar CEO Chen Gang, there will be more opportunities in overseas markets in 2023. During CNY, outbound air tickets increased by 6.7 times over the same period in 2022. The top 5 destinations are Thailand, Hong Kong, Malaysia, the United States, and Indonesia. With the increase in flight supply, it is expected that the number of international air tickets and international hotel reservations will continue to grow.

Duty-free consumption in Hainan continued to be popular. According to Haikou Customs statistics, from January 21 to 27, Haikou Customs supervised 1.56 billion yuan in sales of duty-free shopping, an increase of 5.88% over the CNY holiday in 2022;

The number of duty-free shoppers was 157,000, an increase of 9.51% YoY; per capita consumption is 9,959 yuan.

According to Ctrip data, this year’s Spring Festival, cross-border ticket bookings increased more than four times year-on-year. Bangkok, Singapore, Kuala Lumpur, Chiang Mai, Manila, and Bali have become the most popular international travel destinations for Chinese tourists.

Mao Ning, a spokesman of the Ministry of Foreign Affairs of China, responded that during the Spring Festival this year, the number of people leaving the country exceeded 2.87 million, with an average of 410,000 per day, an increase of 120.5% over the same period last year. The overall order for outbound travel of Chinese tourists increased by 640% year on year, and the order for air tickets increased by more than four times.

Mobile payment trends in China outbound tourism

Trip.com’s international business maintained rapid recovery, with the overall air-ticket bookings on global platforms increasing over 100% year over year.

Its total net revenue increased by 29% year over year and increased by 72% quarter over quarter to RMB6.9 billion (US$969 million), mainly driven by the robust recovery in China’s domestic market and overseas markets.

• Accommodation reservation revenue was RMB2.9 billion (US$408 million), representing a 32% increase YoY or 114% increase QoQ
• Transportation ticketing revenue was RMB2.6 billion (US$369 million), representing a 44% YoY or 49% QoQ
• Packaged-tour revenue was relatively stable at RMB387 million (US$54 million) compared to the same period in 2021. Packaged-tour revenue increased by 217% from the previous quarter
• Corporate travel revenue was RMB370 million (US$52 million), representing a 9% YoY or 76% increase QoQ

Net income for the third quarter of 2022 was RMB245 million (US$34 million), which improved from a net loss of RMB868 million for the same period in 2021 and a net income of RMB43 million for the previous quarter.

Adjusted EBITDA for the third quarter of 2022 was RMB1.4 billion (US$198 million), representing a 164% increase from RMB537 million for the same period in 2021 and a 300% increase from RMB355 million for the previous quarter.

Adjusted EBITDA margin was 21% for the third quarter, compared with 10% for the same period in 2021 and 9% for the previous quarter.

As of 12:00 on 8 December, the travel search popularity for 2023 last week had increased by more than 900% compared with the same period last year. Within two hours after the release of the New Year’s holiday schedule on 8 December, the search volume of Trip.com’s air tickets and hotel products increased by 6 times and 7 times respectively from the same period the previous day.

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The top three industries that college students expect to apply for jobs are technology, finance, and FMCG.

The five factors that college students give priority to when choosing employers are salary and welfare, personal career development, value realization, enterprise working environment, and enterprise development prospect.

About 52% of college students show a strong willingness to work in the first-tier cities. At the same time, the attraction of the new first-tier cities is closely followed, and the willingness reaches 41%.

Top e-commerce mobile shopping platforms in China 2021

China’s leading OTA Ctrip officially changed its corporate name to “Trip.com Group Limited” on October 25, 2019, and its ticker to “TCOM” on November 5, 2019. Trip.com Group operates a family of travel brands, which mainly consists of Trip.com, Ctrip, Skyscanner, and Qunar.

Income from Trip.com operations increased by 52% year-over-year to RMB2.2 billion (US$314 million). Excluding share-based compensation charges, non-GAAP income from operations increased by 40% year-over-year to RMB2.6 billion (US$369 million) in Q3 2019.

The operating margin was 21% for Q3 2019, compared to 16% in Q3 2018, and 15% in the previous quarter. Excluding share-based compensation charges, non-GAAP operating margin reached 25%, the highest margin over the past 6 years.

Trip.com Group’s international businesses (excluding Greater China destinations) sustained robust growth momentum.

• The year-over-year revenue growth rate of international hotel business (excluding Greater China destinations) reached 50% in Q3 2019.
• Trip.com brand’s international air ticketing volume maintained triple digit growth for the 12th consecutive quarter.

For the third quarter of 2019, Trip.com Group reported net revenue of RMB10.5 billion (US$1.5 billion), representing a 12% increase YoY. Net revenue for Q3 2019 increased by 21% from the previous quarter.

Accommodation reservation revenue for Q3 2019 was RMB4.1 billion (US$576 million), representing a 14% increase from the same period in 2018, primarily due to its brand’s extensive global reach, expansion in the global product portfolio, and provision of diversified accommodation choices to prospective customers. Accommodation reservation revenue for Q3 2019 increased by 21% QoQ, primarily due to seasonality.

Transportation ticketing revenue for Q3 2019 was RMB3.7 billion (US$521 million), representing a 3% YoY, primarily due to an increase in international air ticketing and ground transportation ticketing demands. Transportation ticketing revenue for Q3 2019 increased by 9% QoQ, primarily due to seasonality.

Packaged-tour revenue for Q3 2019 was RMB1.6 billion (US$229 million), representing a 19% increase YoY, primarily driven by a significant increase in traffic generated from offline stores and further penetration in lower-tier cities in China. Packaged-tour revenue for Q3 2019 increased by 56% QoQ, primarily due to seasonality.

Corporate travel revenue for Q3 2019 was RMB335 million (US$47 million), representing a 26% increase from the same period in 2018, primarily driven by expansion in corporate customer base and an optimized product mix trend. Corporate travel revenue for Q3 2019 increased by 9% from the previous quarter, primarily due to seasonality.

Trip.com gross margin was 79% for Q3 2019 , which remained consistent with that for the same period in 2018 and the previous quarter.

Product development expenses for Q3 2019 increased by 12% to RMB2.8 billion (US$390 million) from the same period in 2018 and increased by 6% from the previous quarter, primarily due to an increase in expenses relating to product development personnel.

Product development expenses for Q3 2019 accounted for 27% of the net revenue for the same period. Excluding share-based compensation charges, non-GAAP product development expenses for Q3 2019 accounted for 25% of the net revenue for the same period, which increased from 24% in Q3 2018 and decreased from 28% in the previous quarter.

Sales and marketing expenses for Q3 2019 decreased by 8% to RMB2.5 billion (US$347 million) from the same period in 2018, primarily due to a decrease in expenses relating to sales and marketing activities. Sales and marketing expenses increased by 18% from the previous quarter, primarily due to an increase in expenses relating to sales and marketing activities.

Sales and marketing expenses for Q3 2019 accounted for 24% of the net revenue for the same period. Excluding share-based compensation charges, non-GAAP sales and marketing expenses for Q3 2019 accounted for 23% of the net revenue for the same period, which decreased from 29% in Q3 2018 and 24% in the previous quarter.

General and administrative expenses for Q3 2019 increased by 18% to RMB809 million (US$113 million) from the same period in 2018, primarily due to an increase in general and administrative personnel-related expenses. General and administrative expenses remained consistent with the previous quarter.

General and administrative expenses for Q3 2019 accounted for 8% of the net revenue for the same period. Excluding share-based compensation charges, non-GAAP general and administrative expenses accounted for 6% of the net revenue for the same period, which remained consistent with those for the same period in 2018 and decreased from 8% in the previous quarter.

Income from operations for Q3 2019 was RMB2.2 billion (US$314 million), compared to RMB1.5 billion in Q3 2018 and RMB1.3 billion in the previous quarter. Income from operations increased by 52% year-over-year in Q3 2019.

Excluding share-based compensation charges, non-GAAP income from operations was RMB2.6 billion (US$369 million), compared to RMB1.9 billion in Q3 2018 and RMB1.7 billion in the previous quarter. Non-GAAP income from operations increased by 40% year-over-year in Q3 2019.

The operating margin was 21% for Q3 2019, compared to 16% in Q3 2018, and 15% in the previous quarter. Excluding share-based compensation charges, non-GAAP operating margin was 25%, compared to 20% in Q3 2018 and in the previous quarter.

Income tax expense for Q3 2019 was RMB365 million (US$51 million), compared to RMB257 million in the same period of 2018 and RMB336 million in the previous quarter. The change in its effective tax rate was primarily due to changes in the profitability of Trip.com subsidiaries that have different tax rates, including certain non-deductible expenses of the fair value changes in equity securities investments.

Net income attributable to Trip.com Group’s shareholders for Q3 2019 was RMB793 million (US$112 million), compared to net loss attributable to Trip.com Group’s shareholders of RMB1.1 billion in Q3 2018 and RMB403 million in the previous quarter.

Excluding share-based compensation charges and fair value changes of equity securities investments, non-GAAP net income attributable to Trip.com Group’s shareholders was RMB2.3 billion (US$317 million), compared to RMB1.7 billion in Q3 2018 and RMB1.3 billion in the previous quarter.

Diluted earnings per ADS were RMB1.35(US$0.19) for Q3 2019 . Excluding share-based compensation charges and fair value changes of equity securities investments, non-GAAP diluted earnings per ADS were RMB3.70(US$0.52) for Q3 2019 .

As of September 30, 2019, the balance of cash and cash equivalents, restricted cash, short-term investment, held to maturity time deposit and financial products was RMB61.0 billion (US$8.5 billion).

For the fourth quarter of 2019, Trip.com expects the net revenue growth to continue at a year-over-year rate of approximately 8%-13%.

China outbound tourism insights 2019

China online accommodation market totaled 39.38 billion yuan (US$5.97 billion) with an increase of 27.1% YoY according to data from Analysis.

Ctrip leads China’s online accommodation market in Q2 2017 with 46.7% market share, followed by Qunar, Meituan and Alitrip.

While China’s more affluent consumers increasingly favor independent travel, the online holiday and group tour booking market is still showing rapid growth, likely driven by continued expansion of the middle class in China. China online holiday booking market overview Q2 2017 »

China online tourism market analysis 2017

During 2016, the online tourism market in China maintained steady growth over the year prior, growing much more quickly than GDP growth while increasing its overall penetration into the tourism industry as a whole.

Overall, online booking of hotels and plane tickets maintained leading positions within online tourism sales, and individual travel bookings dominated the industry (as opposed to group tours). The trend towards individual, independent travel is beginning to dramatically affect the market, mostly in ways which are beneficial to the online travel booking industry.

Tourism industry revenue trends

The tourism industry in China has maintained a growth rate far above GDP growth for several years, growing at over 10% year-on-year every year for the past five years. In 2016, the total market reached 4.69 trillion yuan (US$ 703 billion), having grown by 13.6% from 2015.

This growth rate is also slightly higher than 2015, when growth over 2014 was 11.0%. Tourism accounted for 6.3% of China’s GDP in 2016, also a slight increase over 2015 (6.0%).

Meanwhile, the online tourism market is growing much more rapidly than the tourism market overall; in 2016, online tourism revenue reached 739.42 billion yuan (US$110.85 billion), representing 56.1% growth over 2015. As a result, online tourism has increased its market share from 11.5% of the market in 2015 to 15.8% in 2016 (up from 6.6% in 2012).

Online tourism market overview

From 2015 to 2016, there were minor changes in the structure of the online tourism market in China. In 2016, as before, online booking of transportation (plane, high-speed rail, conventional rail) dominated the market, with total revenue of 538.5 billion yuan (US$80.7 billion), followed by accommodation booking with 125.1 billion yuan (US$18.8 billion).

Group tours and tour packages made up the remainder; market share shifted in favor of transportation, which rose from 70.2% to 72.8% of the market, taking equally from accommodation and tours, which both slid from 2015 by about 1.3%.

Within the online tourism market, there were three major players and a host of minor ones. The major players, Ctrip, Qunar, and Fliggy, collectively dominated the market in 2016, with 68.7% of market share. Ctrip maintained a commanding lead, holding 35.7% of the market (263.6 billion yuan or US$39.5 billion), a slight decline over the year prior in terms of market share.

Qunar, however, slid dramatically after being bought out by Ctrip; in 2015 it accounted for 27.8% of the online tourism market, but dropped to only 18.2% in 2016. Minor players stepped into the gap in a big way, moving on the backs of a market shift in favor of O2O and featuring several new players which combine tourism sales with Tripadvisor-like crowd-sourced advice and reviews.

Online tourism investment overview

When it comes to investors, holiday and accommodation booking are still the two sectors which attract the most attention and capital. With Chinese tourism spending continuing to rise and holiday booking markets still in their infancy, there is significant room for online providers to make an impact and earn a return on investment in this sector.

Within the holiday booking industry, international travel continues to be a growth market and a driving force. While overall investment share declined significantly from 2015, holiday booking is still an under-served market and will continue to attract attention and financing going forward.

In addition, investment into travel finance is noteworthy; a new and much-watched market, with investment only appearing in 2016, it is driven by Chinese consumers’ increasing willingness to amortize major expenses beyond a home.

Online tourism markets: Sector breakdowns and analysis

Online transportation market

Of all sectors, transportation booking has the highest online market penetration rate, with online booking accounting for 54.6% of sector revenue. As consumers in China come to prefer independent travel over group tours, online booking has become the preferred way of buying train or plane tickets because of its convenience and economy. In 2016, the online transportation market grew by 62.0% to reach 538.5 billion yuan (US$80.7 billion).

The market share breakdown within the online transportation market mirrors the breakdown within the online tourism market as a whole, with the same three major players accounting for 69.4% of the market in 2016.

As with the overall market, Qunar has seen a dramatic fall in market share from 2015 to 2016, dropping by a whopping 12.5% to 20.5% following its purchase by Ctrip. Ctrip has maintained a commanding lead as the largest player in the market, especially with the addition of Qunar.

Minor players have stepped into the market in a big way, with sites such as Tuniu (which formerly focused on group tours and holiday packages) introducing transportation booking platforms.

The most important component of online transportation booking, China’s online plane ticket booking market has grown in lock-step with (indeed, been the primary driving factor behind) growth in the online transportation booking market.

In total, plane tickets account for 88.5% of online transportation booking revenue, and 68.1% of all plane ticket revenue comes from online bookings. From 2015 to 2016, this market has grown by 60.9% to 476.7 billion yuan ($US 71.5 billion). By comparison, train and bus tickets are a small portion of the online transportation booking market, and online booking’s penetration into these areas is quite low.

Online accommodation market

The market for online accommodation booking in China is the second largest component of the online tourism industry, with a value in 2016 of 125.1 billion yuan (US$18.75 billion), and accounting for 32.6% of the accommodation booking sector within China. This market is also growing far more quickly than the tourism market in China, but u

This market is also growing far more quickly than the tourism market in China, but unlike the online transportation booking sector, its year-on-year growth fell markedly from 2015 to 2016, from 57.6% in 2015 to 45.1% in 2016.

The four major players within the online accommodation booking market in China are Ctrip, Qunar, Fliggy, and eLong, which collectively account for 74.4% of the market. Qunar, as mentioned above, was acquired by Ctrip in 2016, as was eLong, meaning that that one holding company collectively controls 67.3% of the market for online accommodation booking.

Market share for both Qunar and eLong has fallen significantly from 2015 following their acquisition by Ctrip. Their market share has been eroded in part by the entry of Meituan (A Groupon analog) into the hotel booking market in a big way in recent months.

Online holiday and tour markets

The online holiday and tour booking market is simultaneously the smallest sector of the online tourism industry and the one in which online platforms have the least penetration, accounting for only 10.3% of the online tourism industry and 17.5% of holiday and tour booking.

Its comparatively small market penetration is one of the reasons that it has attracted significant attention and capital from investors in recent years, but in 2016 the sector saw markedly smaller growth (37.7%) compared to 2015 (58.2%), reaching a total revenue of 75.7 billion yuan (US$11.3 billion).

Analysis sees long-term, slow growth in the online side of the industry as it slowly increases market penetration relative to offline providers, but the industry as a whole may be falling out of favor with consumers who are increasingly interested in independent travel.

Analysts concluded that the industry may be entering a period of “deep plowing and careful cultivation” (a Chinese idiom roughly meaning “retrenchment”) in which more strategically-minded participants restructure their operations to suit changing consumer preferences and many participants are weeded out entirely.

As with the other sectors, the online holiday booking market is dominated by several major players (with a total market share of 76.5%), but excepting Ctrip none of the players are the same as in the other sectors, due to the wildly different conditions and requirements faced by the industry. Compared to 2015, market consolidation has increased; market share for the largest four players in 2015 was 68.4%.

Given the conditions faced by the market, market entrants increasingly focus on upscale tours rather than the economy group tours which were the mainstay of the industry, and the major participants are restructuring their operations accordingly.

One bright spot within the online pre-packaged tour/holiday booking industry remains international tourism, which accounts for 56.0% of the market. Outbound tourism has been immune to many of the headwinds faced by the market for domestic group tours, buoyed by issues related to language, safety, and tourist visa access for Chinese traveling abroad.

However, the growth rate has slowed even for the international group travel market; Analsys analysts suggest that, as Chinese consumers become wealthier and more experienced internationally, and as foreign countries become more adapted to and comfortable with Chinese tourists, the same preference for independent travel which has already manifested itself for travel within China will come to do so for international travel as well.

China’s air ticket online booking market is upcoming and on the rise, with seen increases in market share and dominance of certain air divisions, coupled with increased direct sales channels to enhance the pace of growth.

According to Analysys’s released report in Q1 of 2017 on China’s air ticket online booking market, its market size reached 132 billion yuan (US$19 billion), with a year on year growth rate of 31.8%, as seen in the chart below.

Following the July 2016 revised ticket sales policy for the pay-per-month segment vote, each air division is aimed at improving corporate profits, exerting market dominance and directing marketing channels to accelerate the pace, all working with OTA to rectify the ticket agent industry.

This year, the airline continued to strengthen its platform and held sales of the tickets, hotels, tour package through direct channels in order to increase market share.

With each air divisions playing individual strategies with increased intensities, OTA’s profit margins are gradually decreasing. This quarter, while OTA is continuing to enhance product experience and operational efficiency, at the same time, it is also focussing on the layout of higher prices of the international air ticket market.

From engaging in depths of integration, and aspects of upgrading, manufacturers provide more competitive online aviation service products. On the other hand, manufacturers further strengthen the international ticket product and service side of supply through online international voyage and flagship stores.

China online travel market overview Q1 2017

China online travel market exceeded 210 billion yuan in Q1 2017 with an increase of 51.5% YoY, led by Ctrip, Qunar, and Alitrip.

It consists of online transportation booking (71.9%), online accommodation booking, and online holiday booking.

Ctrip has 35.19% market share in China’s online travel market, followed by Qunar (17.28%), and Alitrip (13.57%).

In Q1 2017, the market concentration has increased, with the market share of Qunar, Ctrip and Alitrip summing up to a whooping 73.6%. Amongst these three, online ticketing transaction size is 50.2 billion yuan, 27.69 billion yuan, and 19.22 billion yuan respectively.

Analysys analysts believe that since the overall market space for online tickets is still huge, coupled with a positive outlook on the tourism industry, the demand for air travel is still on the rise. At present, despite the increase in online air ticket sales, OTA is still the main channel for the booking of air tickets. The main direction of future development of this industry would be to actively possess creative business models, improve online service experiences, and increase consumer reliance.

China online accommodation market overview Q1 2017

The transactions of China online accommodation market totaled 37.202 billion yuan in Q1 2017 with an increase of 43.24% YoY according to data from Analysis.

Ctrip leads the market with 46.6% market share, followed by Qunar, Meituan, eLong, and Alitrip.

China’s domestic tourism insights in 2017

Tourism has become an important consumption necessity in China as 98% respondents in a Ctrip survey expressed their intentions to travel in 2017.

More than half plan to spend over 10% of their annual income on traveling in 2017; more than 70% have travel budget of over 10,000 yuan according to the Ctrip report. Travel frequency in the 1-3 times sees the highest proportion of respondents, up to 72%, followed by plans to travel 4-6 times, accounting for 19%. About 10% will travel at least 7 times in 2017.

Yunnan, Sichuan, and Hainan are the top domestic tourism destinations while Japan, Thailand, and the U.S. are the most preferred overseas destinations. And, over 60% prefer overseas tours.

Tourism becoming a top choice for entertainment and leisure in China

With the increasing wealth and more good exposure to different lifestyle experiences, Chinese consumers have a higher pursuit of the quality of life. Over 80% respondents said traveling is the primary means of consumption and leisure.

10.8% travel during Chinese New Year and National Day holidays, each of which has 7 days. But, more and more people use annual leave (52.7%) and weekends (19%) to travel.

Higher budget for travel

73% of respondents said that this year’s travel budget will be more than 10,000 yuan per capita; 32% have an average budget of between 20,000 and 50,000 yuan. 10% of the respondents plan to spend more than 50,000 yuan on travel.

57% travelers plan to spend over 10% of their annual income on tourism; 19% will even spend up to 20% of their annual income for traveling.

Security and environment are the top concerns

31% of travelers surveyed are most concerned about safety factors, accounting for the highest, including whether the destination has recently occurred natural disasters, terrorist attacks, or the security aspects of uncertainty.

25% of travelers are most concerned about the destinations’ environment, pollution, haze, etc. which will make consumers less inclined to visit. And, 15% of the tourists are most concerned about the friendliness towards Chinese travelers at the destination. In addition, the convenience of flights and visas also affects the preferences of tourists.

Relaxation and relationship becoming top travel motivations

The Ctrip survey shows that exploring natural scenery and cultural style (43.2%), relaxation (34.2%), and enhancing the relationship with family and friends (16.4%) are the top 3 reasons Chinese consumers travel in 2017. In addition, medical and educational tours as well as avoiding the haze have become traveling motives.

Choosing to travel with partners has the highest proportion (30.6%), followed by traveling with children (25.3%) and friends (19.2%). 18.3% plan to travel with parents. Honeymoon, parent-child tours, and parents tours have the highest popularity based on the booking data in 2017 according to Ctrip.

Chinese are more experienced travelers

Free & easy tours (self-guided tours) are becoming a better way to travel as more and more Chinese consumers are getting experienced in planning their tours. 58.6% would like to travel by free and easy tours.

Group tours remain an important way of travel, which is chosen by about one-third of travelers. Half of outbound tourists travel by groups. About 10% are interested trying customized tours.

Also read: China online travel market overview 2012-2019

Qunar was ranked the top generic travel booking app by coverage in September 2016 according to data from TalkingData, followed by Ctrip and LY.com apps.

12306, China Railway’s official app, remains the top choice for train tickets booking. Spring Airlines made it to the top among airlines booking apps with 0.43% coverage, followed by apps from Eastern Airlines (0.27%), China Southern Airlines (0.2%) and Air China (0.15%).

Among accommodation booking apps, Home Inns, eLong and Airbnb are the top 3 by coverage. Airbnb, Tujia and Mayi are the only three homestay network platforms in the top 10 while the rest are for hotel bookings.

Huawei, Samsung, and Xiaomi smartphones are the most popular Android brands among travelers during this year’s National Day holiday.

The top mobile apps for travel information by coverage are Mafengwo (0.58%), TripAdvisor (0.48%), Travel Translator (0.31%; by Mafengwo), Qyer (0.26%), and Breadtrip (0.22%).

China online travel market reached 155.71 billion yuan in the first quarter of 2016, up 58.9% YoY or 14.7% QoQ, according the research company Analysis.

Ctrip and Qunar led the online travel market with 35.6% and 30.2% market share in Q1 2016 respectively, followed by Alitrip (14.8%).

Ctrip achieved net revenues of RMB10.9 billion (US$1.7 billion) with a gross margin of 72% in 2015, up 48% year-on-year according to its official unaudited financial results.

Ctrip’s accommodation reservation revenues were RMB4.6 billion (US$713 million), representing a 44% increase from 2014. The hotel reservation revenues accounted for 40% of the total revenues in 2015 and 41% of the total revenue in 2014.

For the full year ended December 31, 2015, transportation ticketing reservation revenues were RMB4.5 billion (US$688 million), representing a 51% increase from 2014. The transportation ticketing revenues accounted for 39% of the total revenues in 2015 and 38% of the total revenue in 2014.

Packaged-tour reservation revenues were RMB1.7 billion (US$257 million) in 2015, representing a 58% increase from 2014. The packaged-tour reservation revenues accounted for 15% of the total revenues in 2015 and 14% of the total revenues in 2014.

Corporate travel revenues were RMB473 million (US$73 million), representing a 27% increase from 2014. The corporate travel reservation revenues accounted for 4% of the total revenues in 2015 and 5% of the total revenues in 2014.

In October 2015, Ctrip completed a share exchange transaction with Baidu. Upon completion of the exchange, Ctrip beneficially owned ordinary shares of Qunar representing approximately 45% of Qunar’s aggregate voting interests.

In January 2016, Ctrip made an investment of US$180 million in MakeMyTrip Limited (“MakeMyTrip”), India’s largest online travel company, via convertible bonds.

For the first quarter of 2016, Ctrip expects to continue the net revenue growth year-on-year at a rate of approximately 75-80%, reflecting the consolidation of Qunar’s financial results.

Also read: China Travel Market Overview for Q4 2015

Transaction values of all Chinese travel agencies reached about 365.29 billion yuan (US$55.88 billion) and the online reached about 73.55 billion yuan (US$11.25 billion) in 2015 according to ctcnn.com.

Transaction values of Chinese travel agencies reached about 365.29 billion yuan in 2015 with an increase of 11.2% compared with 328.51 billion yuan (US$50.25 billion) in 2014. The online travel agency market reached 73.55 billion yuan with an increase of 71.4% in 2015 compared with 42.9 billion yuan in 2014.

The online penetration rate reached 20.1% with an increase of about 7 percentage points over 2014 (13.1%). Online penetration will continue to grow in 2016.

Ctrip, Tuniu, and CY were the top three largest OTAs by transaction values in 2015. The three accounted for 50% of total OTA market share. CY increased its market share in 2015 with 3.7 percentage points higher than 2014 and Tuniu increased by 3.3 percentage points compared with 2014.

Also read: China Outbound Cruise Travel Market Insight 2015

Top 10 travel mobile apps in China were Ctrip, Qunar, CY, Didi Travel, Tuniu, Kuaidi Travel, eLong, Airplane Butler, High-speed Rail Butler and Lvmama in 2015 according to www.ctcnn.com. More Chinese travelers are active on the mobile end than PC.

Moretravel products have been developed in China in 2015 including self-driving trips, budget travel, backpack travel and others according to Qunar.

Ctrip and Qunar maintained rapid growth in terms of monthly downloads in 2015. Users on mobile end increased by 400% YoY in Q3 2015. Orders on the mobile end accounted for over 60% of overall travel product orders on Double 11 shopping festival.

Qunar gained 975.5 million yuan (US$149.52 million) from the mobile app in Q3 2015 which accounted for 73.6% of overall revenues with an increase of 33.2 percentage points compared with 40.4% in Q3 2014.

Ctrip acquired Qunar in early 2015 and the two apps exceeded about 1.5 billion new downloads in 2015. Didi merged with Kuaidi in 2014 and promoted online travel services in the following year. Didi Travel app gained over 300 million new downloads in 2015.

The total number of orders from the mobile app of Tuniu accounted for more than 70% of the overall 1,668,325 trips in Q3 2015. CY had over 100 million yuan (US$56.31 million) generated on Double 11 and over 90% came from the mobile end. Lvmama accumulated about 200 million new downloads and became the tenth largest travel app in China in 2015.

Also read: China Hotel Search Behavior Overview 2015

China’s online accommodation booking market reached 24.983 billion yuan (US$3.89 billion) representing a QoQ growth of 27.98% and YoY growth of 82.16% in the third quarter of 2015 according to Analysys.

China’s online travel market reached 122.23 billion yuan (US$19.07 billion) with an increase of 18.0% QoQ and 45.9% YoY in the third quarter of 2015 according to iResearch. The OTA market in China reached 5.96 billion yuan (US$0.93 billion) in Q3 2015 with an increase of 48.8% compared to the same period last year, led by Ctrip and eLong.

The online accommodation market maintained a rapid growth in the third quarter of 2015 under the constant promotions of China’s online accommodation and online travel agencies. Overall transactions of online travel market totaled US$19.07 billion in the third quarter and the OTA market in China gained US$0.93 billion.

Ctrip reached revenues of 10.762 billion yuan (US$1.68 billion) with 43.08% market share. Transaction values of Qunar were 5.63 billion yuan (US$0.88 billion) accounting for 22.54% online accommodation booking market. Ctrip, Qunar, eLong and Alitrip combined account for almost 85% total market share, 4.14 percentage points higher compared to the previous quarter.

Continue reading on China online travel booking users in Q3 2015 here.

China’s online accommodation booking companies have attempted in exploring more effective cooperation modes and integration methods between the online and offline. By an increasing number of China’s tourists and promotion of industrial chains, the online accommodation booking market in China will continue to grow in the future.

Also read: China Short-term Accommodation Market Overview 2015

China online travel market reached 44.88 billion yuan (US$7.00 billion) an increase of 48.1% YoY in 2014. And, China’s online travel market is expected to total 63.06 billion yuan (US$9.84 billion) in 2015, an increase of 40.5% compared to the previous year estimated by iResearch.

China’s online travel market is expected to total 63.06 billion yuan (US$9.84 billion) in 2015 with an increase of 40.5% compared to the previous year. 12.5% internet users will buy travel products online. China’s online travel will maintain a steady growth rate in the next several years with an annual growth rate over 30%.

Outbound travel by cruise in China has become fashionable in large and developed cities in recent years. Compared to other outbound travel means, cruise travel could offer more activities for entertainment and relaxation, and travelers won’t need to get on and off trains or planes during trips which can save a lot of money for travelers.

China’s outbound cruise travelers increased to 1.48 million person-trips in 2014 and the number is predicted to reach 1.9 million person-trips in 2015, gaining 4.5 billion yuan (US$0.70 billion) for China’s online travel market. More outbound travelers will travel by cruise in the future.

Online travel websites are the main channel for travelers to receive cruise travel information. Promotion activities of cruise travel and information on comprehensive portal websites can attract more travelers. A large number of cruise travelers will order on online travel websites mainly owing to the convenient payment, good public reputation and more promotion activities.

The online travel agencies and online travel websites have made a large contribution to China’s online travel market. Ctrip, Tuniu, LY, Lvmama, Alitrip and Qunar are major online cruise travel webites in China.

Most of China’s outbound cruise travelers are citizens in large and developed regions such as Beijing, Shanghai and Guangdong. 42.7% gain the monthly income between 3,000 (US$467.94) to 6,000 yuan (US$935.88). The majority of cruise travelers are bachelors who can soon get aware of this new travel method and willing to try it. Travelers with stable income resources account for the bulk.

Generally speaking, outbound cruise travelers won’t travel alone which is distinct from free and easy travelers. 76.9% cruise travelers will travel with lovers, 67.5% will travel with children, 57.6% with parents, and 51.9% with friends.

Outbound cruise travelers usually spend much time in preparing for the trips. 35.3% will prepare for travel half to one month in advance.

About 57.8% cruise travelers don’t spend more than one week on the cruise. 32.0% tend to spend 8 to 14 days on trips and 10.2% spend over 14 days.

China’s outbound cruise travelers prefer short-distance journeys compared to long-distance trips. Neighboring destinations such as Japan and Korea, Southeastern countries, Aegean, Hong Kong, Taiwan and Macao have a heavy passenger flow volume.

62.8% travelers like outside staterooms where they can see the sea view. The majority don’t want to spend all time on the cruise. Nearly half cruise travelers are inclined to visit on land in daylight and relax on the cruise at night.

Over 80% outbound cruise travelers plan to spend less than 10,000 yuan (US$1,559.79) on the trips while about 84% are prepared to spend less than 10,000 yuan on chargeable entertainment activities during the travel.

Apart from enjoying the beautiful sea sceneries, outbound cruise travelers also would like to shop at duty-free shops, enjoy delicious foods, and land to watch local sceneries.

China’s online travel market reached 122.23 billion yuan (US$19.07 billion) with a QoQ growth of 18.0% and YoY growth of 45.9% in the third quarter of 2015, among which the online travel agencies gained 5.96 billion yuan (US$0.93 billion) according to iResearch.

A total of 109 million Chinese person-trips visited foreign countries in 2014 according to the World Urban Tourism Federation (WTCF). With the outbound travel and outbound cruise travel penetrated into more China’s users by government’s support and online travel agencies’ favor, the market in China will be further broadened.

Also read: China Outbound Travelers Shopping Overview 2015

Despite the continuous weak growth and even decline in smartphone sales in China, major domestic mobile phone manufacturers still set a “big leap” of shipping target in H1 2015. Although foreign brands iPhone and Samsung still held a large market share, domestic brands as Huawei, Lenovo, Xiaomi and TCL etc. all set their phone sales volume at 100 million units.

In Q2 2015, Xiaomi was the top smartphone vendor in China by total shipments volume of 15.9%, followed by Huawei (15.7%). Apple ranked third, followed by Samsung and Vivo.

China Mobile, China Telecom and China Unicom, the three Chinese telecommunications companies accounted for 90% of the market.

4G network penetrated quickly into Chinese people’s life while users accessing to the internet through Wi-Fi accounted for 52%, mainly because of the high data charges of 4G network.

25% China mobile internet users on average opened less than 5 apps per day while over 60% would use less than 10 apps. Only 2.9% users would open more than 20 apps in one day. Tencent, Alibaba and Baidu still led China’s mobile internet market.

Among the top 20 mobile apps by total number of monthly average users, seven apps were from by Tencent. And among all the mobile apps in China in July 2015, WeChat and QQ ranked first with the monthly average users of 556.48 million and 424.28 million respectively.

WeChat and QQ were the social communication platforms with the highest penetration rate. Among the usage of the top 20 apps, users spent about 27% of the total apps usage time on WeChat and QQ. Search engine, video, and music player apps were also popular among mobile internet users.

Tencent held a strong position in the mobile social platform. Mobile internet users spent more time on WeChat compared with QQ; however among the post-00s, QQ was the major communication tool.

In the mobile video player market, Tencent, iQIYI and Youku led the market, with fierce competition and little gap of MAU (monthly active users) and total usage.

In the mobile music player market, Kugou music undoubtedly took the lead, followed by QQ Music and Kuwo Music.

Tencent News enjoyed a large share in China’s news apps market while Toutiao was in the process of fast penetration. Toutiao and Tencent News were quite close in total usage time. The daily usage of Toutiao was even twice that of Tencent News .

Offers from China online travel providers such as Ctrip and Qunar have extended to provide more on “things to do” in travel destinations. China online travel providers have also expanded to provide lifestyle offers such as food delivery, movie ticketing and car renting. In H1 2015, Ctrip and Qunar continued the growth momentum, which contributed to the tourism market of China.

Resulting from the convenience of online banking and online payment, mobile online banking apps developed quickly. China Construction Bank ranked first with monthly average usage of 2.32%.

China became the largest e-commerce market since 2014. About 53% users were women in 2015. Taobao held an unaltered position in the online e-commerce market, followed by JD and Vipshop.

In the mother care market, Beibei ranked first with an overwhelming advantage, whose monthly average usage was more the sum of other four apps.

Competition was fierce in the  cross-border hopping market, and Red ranked first in H1 2015 with a market share of 0.19%.

Meituan still ranked top on the group-buying apps in H1 2015, followed by Dianping and Nuomi while Ele continued to compete and was expected to be competitive to Meituan in the monthly average usage.

Meituan and Ele dominate the food delivery market. Ele led the market in Beijing and Shanghai while Meituan held an obvious advantage in other cities. Beijing made up of nearly 10% of the total food delivery share.

Car calling market was basically shared by Didi, Kuaidi and Uber. Although Uber China made much effort in the localization of Uber, the number of daily average users was only one third that of Didi Cars/Kuaidi One.

WeChat payment has gradually been adopted by more users. Many apps supported payments by WeChat. Didi and Meituan were first two apps that used WeChat payment as the primary payment method.

Also read: China Top 100 Mobile Apps in July 2015

Since January 2015, the number of active users on mobile apps has surpassed that of the PC side, and the gap is gradually increasing. Online travel websites are increasing efforts to transform to mobile end to compete for more users.

Ctrip leads the online tourism market while Qunar attracts more consumers on mobile end, followed by LY, Alitrip and Tuniu.

Also read: China Mobile Internet Trend 2015

In Q2 2015, China’s online accommodations booking market reached 19.52 billion yuan (US$3.09 billion), with an increase of 15.9% QoQ and 63.5% YoY.

Also read: China Online Vacation Market in Q1 2015

In Q1 2015, the total transaction value of China online vacation travel market reached RMB11.06 billion (USD$1.80 billion), an increase of 59.8% year-on-year, and 21.7% QoQ according to the data of Analysys EnfoDesk.

•  Online vacation travel business extends to destination service.

In January. 2015, Ctrip released Local Play channel, Qunar set up Tourism Destination Bureau; in April, Tuniu began its online Local Play channel, and supported sighting, show tickets, wifi communication, foods, outdoors activities and others in many cities all over the world. The new measures of several major tourism companies show that destination service would be the most important part in 2015 online travel market.

•  Online vacation travel market penetrates into the upper section of industrial chain, online and offline services integrate further.

Tuniu increased its resource direct mining share to improve its supply chain, merged Zhongshan Travel and Classic Holiday Travel Agency to put forward some projects and at the same time ran its special projects to meet different needs of consumers.

Also read: Chinese Luxury Traveler Insights 2015

Over 50% China tourists prefer to book travel products and services on mobile apps, according to a survey conducted by Ctrip.

93% respondents in Ctrip survey showed travel intention in 2015 and only 7% has no intention to travel at all in 2015. Nearly all respondents over 45 years old would like to travel.

Chinese tourists are spending more on their trips. 34% respondents in Ctrip survey plan to spend between 5,001 and 10,000 yuan; 34% with a budget of over 10,000 yuan per trip.

52% prefer to purchase their travel products and services on mobile apps for convenience and plenty of promotions. Only 18% visit travel agency stores.

Read more here.

Ctrip announced its investment in eLong last Friday through acquiring eLong shares from certain selling shareholders, including Expedia together with several other investors. Ctrip acquired a 37.6% equity stake in eLong for a total purchase price of approximately $400 million.

Ctrip and Expedia have agreed to cooperate with each other to allow their respective customers to benefit from certain travel product offerings for specified geographic markets.

Ctrip has about 37% market share in China online travel market by total transaction value while eLong has about 2.6% in Q1 2015 according to Chinese research company Analysis.

Ctrip’s net revenues were RMB2.3 billion (US$373 million) for the first quarter of 2015, up 46% year-on-year, 82% of which came from accommodation reservation (US$154 million) and transportation ticketing (US$153 million) according to its Q1 finance results.

It suffered net Loss of RMB126 million (US$20 million) in Q1 2015, compared to net income attributable to Ctrip’s shareholders of RMB115 million (US$19 million) in Q1 2014.

Also read: China Outbound Travelers Spent Close to $500B Overseas in 2014

The total transactions of China online travel market reached 94.76 billion yuan (USD 15.28 billion) in Q1 2015, an increase of 51.3% YoY or 9.4% QoQ.

Offers from China online travel providers such as Ctrip and Qunar have extended to provide more on “things to do” in travel destinations. China online trave providers have also expanded to provide lifestyle offers such as food delivery, movie ticketing and car renting.

Ctrip and Qunar in total accounted for over half of China’s online travel market by total transaction values. Alitrip, Alibaba’s ambition in China online travel market only launched in October 2014, already grabbed over 10% of China’s online travel market.

71.3% of China online travel market transactions came from transportation online booking.

Also read: China Outbound Travelers Spent Close to $500B Overseas in 2014

Accommodation reservation volume increased 53% YoY in Q4 2014, and revenues increased 31% YoY, reaching RMB842 million (US$136 million) for Q4 2014.

Transportation ticketing volume increased 102% YoY in Q4 2014; and, revenues increased 34% YoY, reaching RMB774 million (US$125 million) for Q4 2014.

Ctrip gross margin was 69% for Q4 2014, compared to 73% in the same period in 2013, and 72% in the previous quarter.

Net Loss attributable to Ctrip’s shareholders was RMB224 million (US$36 million) for Q4 2014, compared to net income attributable to Ctrip’s shareholders of RMB261 million (US$43 million) in the same period in 2013.

Ctrip Performance Highlights for the Full Year 2014

• Net revenues were RMB7.3 billion (US$1.2 billion) in 2014, up 36% year-on-year.
• Accommodation reservation volume increased 63% year-on-year, and accommodation reservation revenues increased 45% year-on-year, reaching RMB3.2 billion (US$516 million) in 2014.
• Transportation ticketing volume increased 90% year-on-year, and transportation ticketing revenues increased 36% year-on-year, reaching RMB3.0 billion (US$475 million) in 2014.
• Total GMV of packaged tour business reached RMB13 billion in 2014.
• Corporate travel revenues were RMB373 million (US$60 million), representing a 40% increase from 2013. The corporate travel reservation revenues accounted for 5% of Ctrip’s total revenues in 2014 and 2013
• Gross margin was 71% in 2014, compared to 74% in 2013.
• Net income attributable to Ctrip’s shareholders was RMB243 million (US$39 million) in 2014, down 76% year-on-year

Ctrip’s cumulative mobile app downloads reached nearly 600 million by the end of 2014, growing over 70% from the previous quarter. Over 70% of transactions were made through mobile platforms during the Chinese New Year holiday.

For the first quarter of 2015, Ctrip expects to continue the net revenue growth year-on-year at a rate of approximately 40-50%.

Also read: Mobile Represented Almost Half of Qunar’s Revenue in Q4 2014

Sootoo.com estimated that the total transaction value of China online travel market would be RMB76.92 billion (US$12.52 billion) with increase of 35.2% YoY and 5.9% QoQ in Q4 2014. China’s core online travel enterprises are making attractive promotions to compete for the market share which stimulates people’s travel needs.

77% online travelers would search online travel service on mobile device which indicated there is great potential in mobile travel market. More and more users accept booking system for air-ticket, hotel and scenic attraction ticket on mobile device. According to Tencent’s research, 57% Chinese made travel booking online.

The major revenue of China online travel market is from air-ticket and the data shows the revenue had decreased by 1.7% in 2014. Revenue from hotel booking service decreased by 0.7% mainly due to fewer promotions for hotel booking. Chinese young group tend to travel as they like stimulates the need for online vacation market in 2014.

Ctrip, as one of the earliest brand in China online vacation market. represented 23% market share, ranking top, followed by Tuniu and eLong in 2014.

Self-guided travel accounted for 69% in China vacation market while agency group travel accounted for 31% in 2014. Agency group travel is more suitable for middle aged and the elderly while self-guided travel is now powerful in China online travel market.

In 2014, outbound tourism was the major part in China online travel market, representing 43%, followed by nearby tour (31%) and domestic travel (26%). Nearby tour although had low consumption, its users now are growing rapidly with high consumption frequency which indicates it will gradually become the first choice to travel on weekends.

70% rural residents in China would like to go traveling and Beijing is the first choice for them according to China Tourism Industry Report in 2014 released by China Tourism Academy.

Also read: China Online Traveling UGC Users to Exceed 360M in 2015

Different from UGC (use generated content) market in foreign countries, China online travel UGC market is directly in the “free” stage, skipping the “paid” phase, which indicates that users can obtain and share travel guide and note freely. According to iResearch, online traveling UGC users will exceed 360 million in 2015 in China.

In recent years, UGC enterprises are playing more and more important role in China online travel market. UGC enterprises attract users with accurate travel need to provide large amount of traffic for OTA companies and other suppliers. Meanwhile, they can help users make decision.

At present, there are two kinds of parties in China online travel UGC market. One is vertical companies, such as Mafengwo.cn, Qyer.com. The other one is travel guide community, like Ctrip guide online community.

In 2014, users in China online travel UGC market will be 240 million with an increase of 128% from the same period of prior year, which is estimated by iResearch. Besides, there are 80 million people in Ctrip Guide community, ranking top, followed by Mafengwo.cn and Qyer.com with 55 million and 50 million users respectively.

In 2013, Mafengwo.cn’s users were about 20 million while in 2014, the number exceeded 55 million with an increase of 175%. The top 3 travel guide mobile apps in China were Tuniu travel guide, Mafengwo, and Qyer guide in September 2014.

Also read: China’s Top 4 Online Travel Companies Compared

In Q3 2014, total transaction value of China online travel market exceeded RMB72.64 billion ($11.87 billion) with increase of 15.2% quarter on quarter and 20% year on year.

Chinese travelers’ increasing passion for outbound tourism and nearby travel stimulated China online vacation market which made its transaction value increase by 23.5% YoY in Q3 2014. There were also fierce competition among China’s core OTA enterprises which provides travelers better travel options.

iResearch’s latest data shows total revenue of China online travel OTA market was RMB3.95 billion ($645.9 million) with an increase of 21% YoY. In China online travel OTA market, air-ticket, hotel and vacation service had different performance in Q3 2014.

Air-ticket

Airlines shrank commission of some online travel agencies which also had influence on Ctrip. The revenue from air-tickets increased by 16.9% YoY.

Hotel

China’s core online travel agencies fought for traffic on mobile devices. Chinese travelers favor lodges more than before and revenue from hotel had slow growth.

Vacation Service

Tickets price war stimulated area tourism and outbound tourism. Overall, revenue from vacation service was growing steadily.

In China online travel OTA market, the revenue of Ctrip, eLong and LY accounted for 55.9%, 9.7% and 6.3% respectively in Q3 2014. The total market share of these three enterprises by revenue accounted for almost 72% in OTA market.

Also read：China’s Top 4 Online Travel Companies Compared

For the third quarter of 2014, Ctrip reported total revenues of RMB2.3 billion (US$368 million), representing a 38% increase from the same period in 2013. Total revenues for the third quarter of 2014 increased by 24% from the previous quarter.

Ctrip accommodation reservation and transportation ticketing services maintained robust growth, reaching 69% and 98% year-over-year in volume respectively. The number of Ctrip mobile app downloads reached 350 million, growing 75% from the previous quarter.

Through the open-platform, Ctrip work with around 1,000 hotel agency partners, China’s top 600 air ticketing agencies, and over 800 local travel agencies. Total hotel transactions through the open-platform reached approximately RMB1 billion during the third quarter.

Accommodation reservation revenues amounted to RMB950 million (US$155 million) for the third quarter of 2014, representing a 56% increase year-on-year, primarily driven by an increase of 69% in accommodation reservation volume, partially offset by the decrease of commission per room night. Accommodation reservation revenues increased by 26% quarter-on-quarter.

Transportation ticketing revenues for the third quarter of 2014 were RMB800 million (US$130 million), representing a 32% increase year-on-year, driven by an increase of 98% in ticketing volume. Transportation ticketing revenues increased by 10% quarter-on-quarter.

Packaged-tour revenues for the third quarter of 2014 were RMB358 million (US$58 million), representing a 12% increase year-on-year, driven by an increase of 52% in volume of organized tours and self-guided tours. Packaged-tour revenues increased by 74% quarter-on-quarter, primarily due to seasonality.

Corporate travel revenues for the third quarter of 2014 were RMB104 million (US$17 million), representing a 45% increase year-on-year, primarily driven by the increased corporate travel demand from business activities. Corporate travel revenues increased by 15% quarter-on-quarter, primarily due to seasonality.

For the third quarter of 2014, Ctrip net revenues were RMB2.1 billion (US$347 million), representing a 38% increase from the same period in 2013. Net revenues for the third quarter of 2014 increased by 24% from the previous quarter.

Gross margin was 72% for the third quarter of 2014, compared to 75% in the same period in 2013 and remained consistent with that in the previous quarter.

For the fourth quarter of 2014, the Company expects to continue the net revenue growth year-on-year at a rate of approximately 30%.

Ctrip Income Statement

Read more: Understanding Chinese Luxury Travelers

Interbrand, a brand consultancy company, released its 2014 Best China Brands report last week. Tencent claims the #1 position with China Mobile dropping to #2.

Eight brands entered the report this year, including Alibaba Group (#3), Huawei (#13), PICC (#20), Chow Tai Fook (#22), JD.Com (#25), 360 (#41), DEEJ (#48), Lao Feng Xiang (#50). In light of digital and mobile technology transforming the global marketplace, there appears to be increasing similarities between this year’s top Chinese brands and those brands recognized on the world stage.

“Brands across geographies have reached a pivotal point in terms of their development,” said Jez Frampton, Interbrand’s Global Chief Executive Officer. “They are entering what Interbrand has defined as the Age of You—and they are working to develop truly personalized and curated experiences around the individual consumer that this forthcoming age demands. Brands from all categories and sectors are getting “smarter” – with products and devices working in concert with one another, across supply chains and in tandem with our own individual data sets.”

The brand valuation methodology used for Best China Brands is the same methodology Interbrand uses to determine its annual Best Global Brands ranking. Interbrand examines three key aspects that contribute to a brand’s value:

• The financial performance of the branded product and service
• The role the brand plays in influencing customer choice
• The strength the brand has to command a premium price or secure earnings for the company.

The 2014 Best China Brands illustrate that those brands that have embedded technology and mobile applications throughout their core offerings have performed the strongest. Meanwhile, brands from more traditional industries demonstrated great potential as well. Overall, the total brand value of this year’s 50 Best China Brands increased 22 percent when compared to the total value of the 50 Best China Brands in 2013, representing the largest increase in the table’s overall brand value since the inception of Best China Brands. The strong performance of China’s Internet brands marks the end of an era for the financial services and telecommunication brands that had previously dominated the Best China Brands ranking.

With eight new brands making an appearance, the Best China Brands ranking has become more diversified and, consequently, Interbrand has been able to identify the following emerging trends:

The new ecosystem is cultivating the growth of super brands.

The total brand value of Internet brands has increased from 11 percent to 24 percent compared to last year, making the industry the second most valuable after the financial services industry. TAB (Tencent, Alibaba and Baidu), in particular, are either cooperating with or surpassing traditional industries in changing how consumers live, work, learn, and connect with each other and the world at large. Since the second half of 2012, TAB has acquired and invested in a wide-range of companies, including those representing the following sectors and industries: financial services, entertainment, education, and healthcare. As a result, these leading brands are creating entirely new brand ecosystems aimed at improving customer convenience and overall quality of life for all.

Mobile Internet, the Internet of Things, and Big Data have equipped brands with the power to change the word.

Mobile Internet, the Internet of Things, and Big Data not only provide opportunities for revolutionizing and changing traditional industries and Internet brands, but have also created greater synergy as a result of cross-platform collaborations—propelling the transformation and progress of society on a larger scale. Huawei, Lenovo, Haier, Gree and Midea particularly stand out, as they continue to actively explore and develop the concept of “smart city” and “smart home.”

Banking and Telecom industries call for transformation—a test of foresight and innovative capability.

The growth rate of the banking industry (12 brands earned positions on this year’s Best China Brands ranking) continues to slow down with the top four banks garnering less than 5 percent growth in brand value. Both state-owned and private commercial banks face greater challenges and more competitive pressure than ever before and are urgently in need of a “second transformation.” Those banking brands that possess foresight and innovative capabilities have undergone transformation either on their own or by collaborating with another brand—and have maintained their double-digit growth as a result. The business of voice calls and text messages for the Chinese telecom industry continues to decline under the proliferation of Mobile Internet. Facing numerous difficulties, Chinese telecom brands have implemented a series of actions to accelerate transformation. Only time will tell if such actions are too little too late or have the desired impact.

In addition to the trends outlined above, the significant movement amongst the 2014 Best China Brands also reflects four key challenges that Chinese enterprises face in the age of mobile Internet:

Revisit the concept of the age of Mobile Internet

Many Chinese enterprises lack a deep understanding of brand strategy and digital strategy. Their knowledge of ‘digital’ is limited to brand communication channels (online ads, official Wechat and Weibo) and e-commerce channels. Chinese enterprises need to adjust their mindset in both strategies to executional levels in the Age of Mobile Internet.

Emphasize a brand’s authenticity and differentiation.

Building a brand requires the coordination of all departments. A marketing department could be responsible for brand communication, but if no other departments, including sales and operations for example, do not support the corresponding brand experience, it would result in an inconsistent brand experience for the users, thereby reducing the brand’s level of authenticity, Differentiation is the perceived difference and uniqueness of the brand vis-à-vis the competitors. Without clear brand differentiation, brands can only compete on price. A brand’s core competency has shifted from technological capability to the ability to influence customers and consumers. If a brand were to build on its authenticity and differentiate itself from out inside out, it holds greater potential to bring greater value to its brand.

Clarify the direction of brand development.

Compared to great international brands, Chinese brands have a tendency to lack a clear brand vision. A clear brand vision can give a brand depth and bring it to life, garnering recognition and loyalty from the public. In contrast, those organizations lacking clear brand vision can only compete on price and thereby must work all the harder to remain relevant in today’s rapidly-changing Chinese and global marketplaces.

“Imaginative” becomes a key challenge for Chinese brands.

Today, Chinese enterprises need to think about how to create new brand experiences with their consumers instead of simply answering consumers’ current needs. Therefore, Chinese organizations need to inject a tremendous amount of imagination into their brands and into the experiences they build around those brands.

“The reason why Chinese brands face so many challenges and are operationally big, while fundamentally weak, lies in the gap of authenticity, relevance and differentiation compared to world’s most influential and powerful global brands,” said James Wang, General Manager of Interbrand Beijing. “Many Chinese enterprises are still in the early stages of brand development, or what Interbrand calls the Age of Identity. However, with every great challenge there lies a great opportunity.”

Yao Chen Gang, General Manager of Interbrand Shanghai also noted, “The Age of Mobile Internet brings great opportunity for Chinese brands to outpace competitors. The annual shipments of Chinese 4G smartphones can surpass a hundred million. Based on the economic value brought by Mobile Internet, the scale of China will likely be 3 to 4 times of the United States in the future. In this age, brand owners should clarify the brand’s vision, infuse creativity and imagination, create a well-rounded brand experience and co-create value together with consumers. With Huawei becoming the first Chinese brand to enter the Best Global Brands ranking, we look forward to seeing many more Chinese brands earn a top position in the near future.

Click here to read the report in Chinese (PDF).

Stats of Top Selling Brands on Taobao/Tmall in 18 Categories in Sep 2014

With the rapid development of mobile Internet, there are various ways for China hotel guests to make comments on their experience. In 2013, hotel guests’ comments on Ctrip mobile app accounted for one fourth of total comments on Ctrip according to a research from Ctrip. In the future, mobile app would be an important channel for China hotel reviews.

Total downloads of Ctrip app were over 200 million and the number of activation is over 100 million.

As of the end of 2013, the number of total comments on China hotels booked through Ctrip exceeded over 10 million, which was 10 times more than the one in 2010.

According to Ctrip’s research, score of hotel facility among four aspects was lower than the other three ones “hotel location”, “room tidiness”, “hotel service” in 2013. And many hotels are now improving the facilities with increased investment.

The research shows hotels with higher star ratings continued to receive good reviews and satisfactions while ones with lower star ratings saw more improvement in guests satisfactions.

From 2010 to 2013, the ratio of China hotels’ reply to guests’ order in tier-3 cities was higher than the one in tier-1 cities.

In 17 provinces in China, Henan had highest hotel order reply ratio, followed by Guangxi and Shandong.

In 2013, hotels in tier-2 cities had highest ratio of reply to hotel guests’ review.

Top 3 provinces in China in 2013 by ratio of hotel review reply were Hainan, Heilongjiang and Gunagxi.

Also read on China travel news and insights here

Qunar’s mobile app exceeded 8 million MAUs in August 2014 in China according to EnfoDesk, remaining the most popular mobile online travel app, followed by that of Ctrip, LY, eLong, Daodao and Taobao Trip.

The number of Ctrip Mobile App downloads has reached 200 million in Q2 2014 in China. On Android platforms alone, Qunar Travel apps had reached 105.716 million times by May 2014 being the first travel app exceeding 100 million downloads.

China top 6 online travel mobile apps all had rapid use frequency growth rate , especially the one from LY.com who had 148.22% growth rate in total use frequency growth rate in August 2014.

Also read: China’s Top 4 Online Travel Companies Compared

China’s traveling industry is booming these years. With various choices of travel companies, Chinese people are more enthusiastic about traveling ever than before. Among all online travel companies in China, Qunar.com, Ctrip, eLong and LY.com are the most popular ones by total number of reached users nowadays.

Qunar’s daily reach on mobile device exceeded 2 million in China online travel industry in June 2014, which made it top online travel company by mobile reach from April to June 2014, followed by Ctrip, LY.com and eLong according to data from iResearch.

Qunar.com total revenues for the second quarter of 2014 were RMB400.4 million (US$64.5 million), an increase of 127.3% year-on-year; the number of total mobile app activation exceeded 270 million, which was much bigger than the number of any other online travel company in China.

Most of the online travel companies had increased total number of air-tickets booking on mobile device in Q1 and Q2 2014. And Qunar.com accounted for 38% of air tickets booking in Q2 2014, which had a great growth rate from prior quarter in 2014.

The rate of hotel booking on mobile device of online travel companies was over 40% which shows online travel company can stimulate hotel ‘s development.

During the second quarter of 2014, approximately 80% of Ctrip’s total transactions were booked online or through mobile channels according to its official announced unaudited financial results.

The number of Ctrip Mobile App downloads has reached 200 million, growing at a rate of 60% quarter-over-quarter. Total mobile transaction value for the second quarter of 2014 more than tripled from a year ago and the peak daily transaction value exceeded RMB220 million (US$35.7 million) recently.

Highlights for the Second Quarter of 2014 Performance of Ctrip

• Net revenues were RMB1.7 billion (US$278 million) for the second quarter of 2014, up 38% year-on-year, exceeding our net revenue guidance for the second quarter 2014 of 30-35% increase year-on-year.
• Accommodation reservation revenues increased 47% year-on-year, reaching RMB753 million (US$121 million) for the second quarter of 2014, and accommodation reservation volume increased 64% year-on-year, exceeding our guidance of 50-60% volume increase year-on year.
• Transportation ticketing revenues increased 39% year-on-year, reaching RMB726 million (US$117 million) for the second quarter of 2014, and transportation ticketing volume increased 83% year-on-year, exceeding our guidance of 50-60% volume increase year-on year.
• Gross margin was 72% for the second quarter of 2014, compared to 75% in the same period in 2013, and remained consistent with that in the previous quarter.
• Income from operations was RMB91 million (US$15 million) for the second quarter of 2014, down 54% year-on-year. Excluding share-based compensation charges (non-GAAP), income from operations was RMB202 million (US$33 million), down 34% year-on-year.
• Operating margin was 5% for the second quarter of 2014, compared to 16% in the same period in 2013 and 4% in the previous quarter. Excluding share-based compensation charges (non-GAAP), operating margin was 12%, compared to 25% in the same period in 2013, and remained consistent with that in the previous quarter.
• Net income attributable to Ctrip’s shareholders was RMB135 million (US$22 million) for the second quarter of 2014, down 36% year-on-year. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrip’s shareholders was RMB246 million (US$40 million), down 23% year-on-year.
• Diluted earnings per ADS were RMB0.88 (US$0.14) for the second quarter of 2014. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB1.58 (US$0.26) for the second quarter of 2014.
• Share-based compensation charges were RMB111 million (US$18 million), accounting for 6% of the net revenues, orRMB0.7 (US$0.12) per ADS for the second quarter of 2014.

Early this month, Priceline Group announced plan to invest $500 million in Chinese online travel company Ctrip.com.

Source: Ctrip