Chinese Online Travel Industry

Given a population of over 1 billion, China is one of the largest tourism market in the world. Thanks to the increasing in income and public holidays, Chinese now have both money and time to make a trip.

Stocks mentioned in this report include Ctrip.com (NASDAQ:CTRP), Expedia Inc. (NASDAQ:EXPE), eLong Inc. (NASDAQ:LONG), China CYTS Tours Holding Co., Ltd (SHA:600138), China United Travel Co., Ltd. (SHA:600358), and Emei Shan Tourism Company Limited (SHE:000888).


1. Market Size

l Total Revenue of Travel Industry of China in 2008 was RMB1,160 billion ($170 billion), increased by 5.8% compared that in 2007, (China National Tourism Administration, 2010);

l Total Online Travel Booking in 2007 was RMB2.25 Billion ($.32 Billion), increased 66.4% from 2006 (Data Center of China Internet, 2010);

l Estimated Online Travel Booking in 2010 is RMB5.47 Billion ($.75 Billion)  (Data Center of China Internet, 2010).

China online travel booking market has developed rapidly. According to the statistics by a comprehensive survey,

l The number of citizens taking internet as the main channel to get tourism information accounted for 66.7% of China’s total,

l Citizens who have made a hotel reservation by internet amounted to 70.2% of China’s total,

l Citizens who have booked air tickets by internet accounted for 70.7% of China’s total,

l Citizens who have booked holiday products by internet amounted to 20.3% of China’s total.

The total value of the U.S. online travel market amounted to US$91 billion in 2007, from which we can see the shortage of China’s online tourism industry and meanwhile, we can also see it the bright future is foreseeable.

2. Market components


Source: iresearch (data from each company’s financial report, only including their online sales and income such as internet and Call center )

l Ctrip

Ctrp.com (NASDAQ:CTRP) is the biggest online travel agency by far in China and it accounted for 57% of online sales in china in 2008. Ctrip got listed on the NASDAQ in 2005 and did well during the last 5 years. Market cap of the company has increased 10 times from $0.5 billion to $5.06 billion now.

l Elong

ELong.com Inc. (NASDAQ:LONG) commenced 13 percent of the market in 2008. It also went public on NASDAQ around the same time as Ctrip.com (NASDAQ:CTRP). However, it didn’t do well in the stock market. Its share price has fallen a lot during the first year and followed a continually decreasing path since then. At this moment, its share price is even lower compared with its IPO price.

l Expedia

Expedia Inc. (NASDAQ:EXPE) owns 52 percent of eLong.com (NASDAQ:LONG), but also has its own China website this year. In 2009, it took over Kuxun, which is one of the most popular online fly tickets booking websites in China. Expedia Inc. (NASDAQ:EXPE) is an American company and went public on NASDAQ in 2005 and its market cap now is $7.16 billion. It didn’t do well either in the past 5 years.

l There are some other travel related companies who went public in Shanghai, and following are some big players:

China CYTS Tours Holding Co., Ltd (SHA:600138)²

It has been ranked the top 3 travel agents in China since 2000, and ranked as 2nd travel agent from 2004. The company was built in 1997 and went public at Shanghai one month after its establishment. The company doesn’t only run in the travel service area, but also in real estate, welfare lottery, hotel, and so on so forth. Its market cap is $1.06 billion now.

China United Travel Co., Ltd. (SHA:600358)²

China United Travel went to public on 2000 and went OK in the following 3 years and started to fall in 2004. After financial crisis, it went bank and now stands at 7 which is 30% higher than its IPO price.

Emei Shan Tourism Company Limited (SHE:000888)²

Emei Shan is one of the most famous mountains in China. The company went public in 2000 and the stock price almost tripled in 2009.

3. Concerns and bright future about Chinese Online Travel Industry

l Chinese consumers were reported to be wary of both online transactions and the use of credit cards (both on- and off-line) in the last couple of years, but in recent years, following by the improving of financial market and appearance of new finance products, such as “web bank shield”, Chinese are more open, even love, to use credit cards and online bank transactions.

l Chinese travel agents discourage online bookings because they pay higher credit card fees online (1.0%) compared to in person (0.1%). So the approach to online travel in China is to direct the public to call centers for information and bookings, and to travel agency offices for cash transaction.

l Most of Chinese consumers, especially elder consumers, are still used to travel with travel agents, therefore, attracting whole costumers into online travel industry may take time. However, the main costumers now for online travel industry are still young people. Following by the popular of self-design travelling in these years, families come into this industry too.

Source: Chinavestor.com (April 26, 2010)

  • About post
buy phentermine onlinebuy ambien no prescriptionbuy tramadol without prescriptionphentermine for salebuy ambien onlineambien online no prescriptionbuy ambien onlinebuy valium no prescriptionbuy tramadol online without prescriptionbuy xanax online no prescriptionambien for salebuy valium no prescriptionvalium online no prescriptionxanax online without prescription
2012 - © China Travel Trends