It's not around the corner but you can expect China's Ctrip to set up shop to compete against online and offline travel giants in the U.S. Breaking in through acquisition would be an obvious strategy although it's unclear whether that's actually part of Ctrip's seemingly very active strategic plan.
China’s Ctrip, already the globe’s second largest online travel agency by market cap behind the Priceline Group and ahead of Expedia Inc., is working on a plan to sell trips from the U.S. to destinations around the world but it would start with excursions from the U.S. to China and Southeast Asia.
That’s the word from Tao Yang, a Ctrip senior vice president and head of its vacation business.
“We want to sell travel everywhere,” Yang told Skift.
Yang was in Manhattan October 26 for a Ctrip North America partner summit attended by bus operators, tour companies, hotels and attractions to mark Ctrip’s acquisition of three U.S. based tour operators this week in a bid to boost business and improve service levels for Chinese outbound travelers vacationing in the U.S.
Yang revealed that Ctrip took a majority stake in each of these tour operators for what the online travel agency describes as a marriage to form a Quartet focusing on Chinese travelers’ touring and visiting attractions in the U.S.
But that partnership is distinct from Ctrip’s strategic plan to create a U.S. point of sale to sell travel globally, and this would put Ctrip in competition in the U.S. with partners such as the Priceline Group and Expedia, Yang said.
The Priceline Group has a 9.3 percent stake in Ctrip, has the right to bump that up to 15 percent, and provides Ctrip with hotel inventory to enhance Ctrip’s offerings to outbound Chinese travelers.
Expedia sold its majority stake in China’s eLong to Ctrip and other buyers in China in May 2015, and Expedia continues to have commercial agreements with Ctrip in certain markets.
Asked whether Ctrip would partner or compete with the Priceline Group and Expedia in the U.S. to further Ctrip’s U.S. point of sale strategy, Yang said the relationships would include elements of both partnership and competition, as is common in the travel industry.
It was unclear from Yang’s remarks, made exclusively to Skift in a brief interview after the program, how far along its U.S. point of sale strategy is but he did say there is a team working on it.
Breaking into the U.S. through acquisition would be an obvious strategy although it’s unclear whether that’s actually part of Ctrip’s seemingly very active strategic plan.
Separately, during the partner summit, Yang said Ctrip’s goal in acquiring the U.S.-based tour operators is to increase business and to improve service standards for Chinese travelers visiting the U.S. Previously Ctrip stated it had invested in the tour operators but it had not revealed that it had actually acquired them.
Above is a photo of Yang (at second podium from right) signing the acquisition agreement in Manhattan October 26 with the three tour operators.
Several of the tour operators at the summit said they were happy that Ctrip acquired them and that the Quartet could use customer-data analysis o improve recommendations to travelers.
The tour operators — Universal Vision, Ctour and Tours for Fun — stated they would also benefit from access to Ctrip’s customer base and technology.
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Photo Credit: Ctrip not only wants to improve tours for Chinese tourists in the U.S. but also wants to sell travel from the U.S. to China and Southeast Asia. Pictured, tourists pose at the Brooklyn Bridge on January 30, 2011. Vincent Desjardins / Flickr.com
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