China’s Ctrip Makes Strategic Investments in 3 U.S. Tour Operators

In a bid to increase its presence in the U.S. and to improve destination services for Chinese outbound travelers, Chinese online travel agency Ctrip has made what it describes as “strategic investments” in, and formed a “marriage” with, three U.S.-based tour operators.

The tour operators are Universal Vision, a New York-based bus tour operator and travel agency; Ctour, a Los Angeles-based wholesaler and China group-tour operator, and Tours for Fun, a Los Angeles-headquartered online travel agency focused on overseas destination travel.

The idea behind the investments and partnerships, forming the Quartet, as Ctrip calls it, is to share resources, provide quality control and a higher level of services to “Chinese people traveling in the U.S.,” Ctrip states. The terms of the investments were not disclosed.

Ctrip, which now has the second largest market cap, $24.9 billion, behind the Priceline Group’s $73.2 billion, among online travel agencies, states that Universal Vision and Ctour “hold more than 50 percent” market share in North America — presumably for Chinese travel. Tours for Fun is a leading platform, too, Ctrip states.

Ctrip, in a statement, describes the reasons behind its moves: “This strategic investment will be significant in enhancing the outbound travel services of the Chinese traveling to the U.S. and strengthening Ctrip’s market position in both East and West Coasts of North America. According to the memorandum of strategic partnership, the Quartet will cooperate with each other on the channel of receiving customers, the procurement and distribution of resources, and their respective advantages. The purpose is to provide more diversified and cost-effective products, and to provide Chinese tourists with high-quality experience and service guarantee.”

The investment in the U.S. is part of Ctrip’s strategy to provide service guarantees for its customers who travel abroad in Asia, the Middle East, Europe and now North America. Ctrip over the last couple of years has partnered with airlines, hotels and tour operators to enhance destinations services for its travelers.

Ctrip has increasingly been looking beyond its domestic China focus, and the formation of the Quartet is another manifestation of the new strategy.

Ctrip chief strategy officer Jenny Wu described the rationale behind its destination-services strategy in a Skift interview in November 2015 that had previously not been published:

“We are working closely with a lot of resource suppliers like airlines, hotels and local ground operators in trying to enrich our product offering and try to get the best price so that the customers can enjoy the best price, best product, best services,” Wu said. “Meanwhile we also work Priceline, with those big team players and consolidators so that we can quickly expand our product line.”

“… For outbound travel, we are also working on trying to make it easier and more convenient for people when they are traveling on the road. For example, when people arrive in New York or they travel to Florida, they can make the in-travel reservation for certain activities. Once they go to search it up, they can find the best product available. If there’s anything they need they can always call us.

“Also we are working closely with ground service providers … Travelers need the people that will handle the services and help. We have the team, we have the partners, they are here to help them.”