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Ctrip, or the company soon-to-be known as Trip.com Group Ltd., is banking on international growth as a key driver of its business, primarily in Asia. But short term, at least, difficulties in Hong Kong and Taiwan and with the White House are complicating that game plan.

What’s in a name?

Ctrip will become the third major online travel agency to change its name since 2018. The new proposed brand for the Shanghai-based company would be Trip.com Group Ltd. That follows the Priceline Group rebranding to Booking Holdings in 2018, which was followed shortly thereafter by Expedia Inc. becoming Expedia Group.

So Ctrip’s major brands, including Ctrip, Trip.com, Qunar, and Skyscanner would all fall under the purview of the parent company, Trip.com Group Ltd. Ctrip announced the rebranding as part of its second quarter earnings call Tuesday in Shanghai.

“The new name reflects the services and products we provide, and can be easily remembered by global users,” Ctrip Executive Chairman James Jianzhang Liang said as part of the earnings announcement.

The rebrand is subject to a shareholder vote at Ctrip’s annual general meeting October 25.

Ironically, Expedia Group indirectly handed the Trip.com name to Ctrip. That’s because Expedia sold the name Trip.com to Gogobot, which in turn got acquired by Ctrip in 2017. Gogobot had rebranded to become Trip.com.

Ctrip CEO Jane Sun said Tuesday morning during an earnings call with financial analysts that international revenue could be 40 to 50 percent of Ctrip’s total revenue in the next three to five years, up from 35 percent in the second quarter.

International Headwinds

Although international business is expected to be a growth driver for the online travel agency, the ongoing protests in Hong Kong, political tensions with Taiwan, and the U.S-China trade war negatively impact third quarter guidance, Sun said.

In addition, according to a research report, the “average price of outbound air ticket dropped about 750 basis points year-over-year in July as a result of softer demand and macro uncertainties,” she added.

Ctrip is guiding for 10-15 percent revenue growth in the third quarter. In the third quarter of 2018, revenue climbed 15 percent.

The Largest MakeMyTrip Shareholder

Ctrip’s international ambitions became clear with a recent move in India. In the past few days, it completed a share exchange with Naspers which made Ctrip the largest shareholder of India’s MakeMyTrip, wielding 49 percent of MakeMyTrip’s voting power.

The China-based online travel company intends to start reporting MakeMyTrip’s gains and losses on its balance sheet using the so-called equity method as of August 30, Ctrip said.

For the second quarter, Ctrip posted net loss of $59 million compared to net income of $360 million a year earlier. The company attributed the loss largely to the plunging value of equity investments. Revenue in the second quarter increased 19 percent to $1.3 billion.

Note: This story has been updated to reflect the fact that the proposed new company name, Trip.com Group Ltd., is subject to shareholder approval.

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Tags: china, ctrip, earnings, hong kong, taiwan, trade war, trip.com

Photo credit: Harbor views from Marco Polo Hotel in Hong Kong. Will calm return to the city? The volatile situation in Hong Kong, political tensions with Taiwan, and the U.S.-China trade war have negatively impact Ctrip's business. Wharf Hotels Management

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