China’s largest online travel group Ctrip may pause in its long-running spending spree on companies of all sizes, including last year’s $1.74 billion acquisition of Skyscanner and strategic investments in three U.S. tour operators.

During the company’s fourth-quarter earnings call Thursday morning in Shanghai, Ctrip executives gave hints, though not explicit statements, about a more inward focus.

Recently appointed chief executive Jane Jie Sun said Ctrip’s top priority in 2017 was to focus on “second-tier cities” in China. These are markets it has neglected so far because the average nightly rates are only $15 to $17 and commissions and margins are lower than in the three-star to five-star hotel mainstay of Ctrip’s business.

But this year the company feels it needs to prevent companies like Airbnb and Alibaba from gaining traction in these smaller markets. It plans to boost its hotel listings and ramp up its marketing spending to attract guests there. Last year it hiked the inventory in second-tier and third-tier cities 80 percent, year-over-year, it says.

Ctrip also plans not to increase its employee headcount this year, choosing instead to automate processes rather than hire.

To be sure, when an analyst asked about the company’s long-term plans, Sun gave her vision, which was consistent with the company’s previously stated goal of growing internationally.

“Right now the contribution of international is about 10 to 20 percent,” Sun said. “Going forward, we would like to grow it to anywhere from one-third, 40% or even more.”

Skyscanner only contributes a small part to that goal. Executives said the Edinburgh-based metasearch company would only make contributions to revenue representing percentages in the mid to high single digits. But Skyscanner’s platform will extend Ctrip’s air-ticketing business in Asia-Pacific and Europe.

Some of Ctrip’s growth will happen through additional acquisition at some point. Sun explained the necessary conditions: The Skyscanner acquisition aside, Ctrip historically “always makes investments when the market has a downturn and we can establish leadership in a strategic area, such as major chain hotels… [We like it] when markets have lost confidence, but we know a target company has strong fundamentals. Historically these investments have generated double, triple, or even ten-times returns.”

Sun then said it has not decided to what extent Ctrip will stick with that pattern. And the statement itself suggests that Ctrip may bide its time to see how market conditions change in the segments it is interested in penetrating further.

Ctrip earnings

Ctrip continues to bet on the growth of outbound travel. About 120 million Chinese tourists went abroad in 2016, and Ctrip forecasts an 11 percent-a-year compound annual growth rate for that metric, which it believes it will benefit from.

To cater to overseas travel, the flagship online travel agency has added new products and services in 2016, such as online travel guides to destinations, parking reservations at select airports, and currency exchange services. It also made investments in Mandarin-speaking “destination services” abroad such as a tour guide company and a car service provider.

Ctrip has also been innovating in other products, it says. One of its key initiatives has been to enable dynamic group tours, representing 300 percent year-over-year growth. It pools together individuals into groups and offers help from local experts. More than 10 million individual travelers signed up for this service in 2016.

Package tours are also a fast-growing product for the company thanks to new experiential themes. “We’ve seen more and more Chinese outbound travelers participating in thematic tours, such as skiing, studying, and medical tourism,” said Cindy Wang, chief financial officer. On the latter, health care trips grew over 500 percent year-over-year, she said.

While Ctrip has had a basic emergency service since 2011, it has in the past year rolled out an emergency response team that is able to locate and help customers in natural disasters and other crises.

The company has also been mimicking some of Booking.com’s and Expedia’s back-end services for hoteliers by adding tools for marketing, customer service, data analysis, and rate-setting.

James Liang, executive chairman, noted that the company continues to do on the unglamorous but vital work of converting more website visitors into buyers, particularly of hotel stays. In 2016, its accommodation reservation revenues were $1.1 billion, representing a 58 percent increase from 2015 and 37 percent of the total revenues in 2016.

As a side note: In 2014, Priceline Group invested about $500 million in Ctrip and it now has the option to buy as much as 15 percent of Ctrip’s outstanding shares.

Photo Credit: As the domestic market leader, Ctrip is expected to capture the growth in Chinese outbound travel and online bookings. But it will look to deepen its domestic coverage this year as a priority.