Last week we launched the latest report in our Skift Research service, A Deep Dive Into Ctrip and the China Online Travel Market 2017.
Below is an excerpt from our Skift Research Report. Get the full report here to stay ahead of this trend.
Ctrip acquired global metasearch player Skyscanner in December 2016 for £1.4 billion ($1.74 billion). At the time of the acquisition, we wrote that competitiveness for meta boils down to scale, brand strength, and technology. Skyscanner checked each box for Ctrip.
The company has strong traffic in Europe, Asia-Pacific, and North America, but lacks the scale Ctrip has in fulfillment and inventory. Ctrip should be able to improve monetization of Skyscanner’s robust traffic over time and push up its revenue and margin trajectory.
We spoke with Colin McLellan, the CFO of Skyscanner, about how the deal came about. What follows is his account:
Back in August 2016, there was an opportunity for some of the senior Skyscanner management team to go and visit Ctrip in Shanghai.
Myself and our Chief Legal Officer went. The plan was that Gareth, our CEO, would actually go out to Ctrip as well, but a week before we were due to go, Gareth moved houses and lost his passport.
We went out to visit the Ctrip team and it was Jane, and James, and Cindy their CFO, and a collection of a few others, and Gareth connected via phone from Edinburgh. At that point, it was more about where do we see the future of Skyscanner and where do we see our ability to add value to the travel industry.
So, that was how it kicked off originally.
Things progressed quickly. Within a matter of weeks after that, it became clear that Ctrip was interested in potentially acquiring us. The vision was aligned and obviously you have to walk through the detail and that’s always the part that takes the time and the diligence. But the fundamentals were agreed very quickly because we recognized we were actually on the same page about what’s important to travelers and how to provide that to them through the strength of technology and the strength of product. Because we had that strong foundation and understanding between each other, everything else was just the details, really.
After that first meeting, it took only a couple of weeks for Ctrip to show their intentions to acquire us. It was then another few weeks after that we had come to terms and then we moved onto a period of diligence, which again, happened very, very quickly.
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