Tuniu Corp. fell the most in six weeks in New York amid reports that pricing disputes have prompted a group of 17 Chinese travel agencies to boycott the company’s booking website.
The American depositary receipts slid 7.8 percent to $15.32 as of 12:36 p.m. Trading volume of 926,000 shares was more than triple the full-day average of the past three months. It was the worst performer in a Bloomberg gauge of U.S.-traded Chinese stocks, which gained 0.5 percent.
The travel agencies including Beijing UTour International Travel Service Co. said they will stop offering services through Tuniu’s website starting July 15 because of disagreements over pricing, the online news portal iFeng.com reported, citing their joint statement. The conflict comes as Chinese travel websites seek to expand sales by adding more providers to their platforms, which is increasing price competition and crimping profits at some of the larger ones.
“It may have a negative impact on revenue in the short term,” Tian X. Hou, the founder research firm T.H. Capital LLC, said by phone from New York. “In the long run, this will remain an issue for the industry amid the fast growth of China’s tourism industry. Offline travel agencies are not benefiting as much as the online booking sites.”
Thursday’s drop reduced Tuniu’s gain since its U.S. debut in May to 70 percent. Ctrip.com International Ltd., a larger competitor, dropped 0.2 percent to $65.98, while Qunar Cayman Islands Ltd. slid 1.9 percent to $48.39.
Nanjing, China-based Tuniu said it has removed from its website all offerings by Beijing UTour after the agency “unilaterally” ended their cooperation, according to the report from iFeng.com, which is owned by Phoenix New Media Ltd. The People’s Daily’s website and Sina.com published similar stories.
This article was written by Belinda Cao from Bloomberg and was legally licensed through the NewsCred publisher network.