Ctrip, China’s leading online travel agency has entered the US market.

With more than 19 million registered users, Ctrip processed more than 9 million hotel room nights and 10 million air tickets in 2007. However, more and more English-speaking leisure and business travelers are on the site making enhanced English-language services and amenities a necessity to facilitate China travel and booking.

Ctrip limits itself to its strong point, the China travel business from the US, worth more than $150 billion in 2007. At the same time, Expedia is entering the China market. That is going to be an interesting battle, since Expedia has a strong international brand name, but Ctrip seems almost unbeatable on the China business.
Source: China Herald

Ctrip.com, a (perhaps, ‘the’ would be a more appropriate word) Chinese online travel operator, has posted a net profit of RMB398 million ($55 million) in 2007, up 66% over the previous year.

In the fourth quarter, net profit of the Nasdaq-listed firm more than doubled to RMB135 million.

For the full year 2007, business revenue rose more than 50% to RMB1.3 billion, 53% of which came from hotel reservation service which contributed RMB677 million.

Business revenue through air ticket bookings reached RMB503 million, accounting for 39% of the total, up 72% from 2006.

Co-founder and CEO Min Fan became Chief Executive Officer in January 2006. Before becoming involved in Ctrip he had more than 15 years of experience in travel-related industries. From 1997 to 2000, he was the Chief Executive Officer of Shanghai Travel Service Company, a leading domestic travel agency in China.
He obtained his Master’s and Bachelor’s degrees from Shanghai Jiao Tong University. He also studied at the Lausanne Hotel Management School of Switzerland in 1995.
Min Fan is also the founding shareholder of Home Inns & Hotels Management, a Chinese economy hotel developer, operator, and franchisor with a $1.2 billion market capitalization.

Ctrip publishes its expectations that its net revenue will grow to 35% in 2008. This is almost certainly a conservative estimate. In the year of the Olympic Games and with the abolition of airline tickets and the massive increase in travel within China by Chinese, Ctrip is set for a major increase to its turnover and profitability.
Source: China View

In 1999 Ji Qi founded Ctrip, a new internet firm, and hit on a vast, untapped area of demand: the Chinese traveler. After the online travel agency came Home Inns, an equally successful chain of basic hotels. Nine years later, Mr Ji is on his third company for travelers: Hanting Hotels.

Hanting Hotels is less than three years old but already has 75 outlets. Occupancy averages 90%, after being open for just three to four months.

Customers are mainly Chinese business people who want clean rooms, a desk, a television and internet service. Room prices are modest — under $40 a night. A second brand, Hanting Express, will soon be launched with prices from $15 to $30 a night, aimed at non-business travellers, with even more austere fittings. The aim is to have 1,000 outlets within three to five years.

When Ji Qi founded Ctrip there were no automated payment systems and no private travel firms. Ctrip sends out motorcycle couriers to take the cash payment and deliver tickets. Revenues at Home Inns, the first of the affordable chains, are growing at more than 70% a year and the net income is rising faster still.
Source: The Economist

Hilton will open a  new Hilton Doubletree in  Beijing in time for the 2008 Beijing Olympics.

The hotel will have 547 guest rooms including 110 suites. Public facilities include two restaurants, a lounge, a number of meeting rooms, a ballroom, and a health club and swimming pool.

Doubletree by Hilton Beijing is located at the South West 2nd Ring Road, just 38 kilometers from the airport, next to the Central Official District of Beijing (COD) and Beijing’s Financial Street and with easy access to major tour attractions like the Beijing Century Monument, Tian’an men Square, Forbidden City, and the Temple of Heaven.

A nationwide survey suggests that the value of China’s online travel market will reach RMB3.84 billion ($519 million) this year, with a projected growth rate of 70.7%.

Fu Zhihua, director of the Data Center of the China Internet (DCCI) research department that conducted the survey said, ‘There are two reasons for the acceleration: the Beijing Olympic Games and the further opening up of the domestic tourism market.’

The survey showed that China’s online travel services market was worth RMB2.25 billion ($300 million) in 2007, with an estimated 65% expansion for the industry from 2006.

Shanghai-based online travel service provider Ctrip.com still holds pole position with the highest penetration in large primary and second-tier cities.

The effect was felt industry-wide, benefiting other players such as eLong , China’s second-biggest online travel agency, and Mango city.com launched by the Hong Kong China Travel Services (HKCTS) in 2005.

The Netguide 2008 survey forecast the trade volume would rise to RMB7.32 billion ($989 million) in 2009.

The survey, begun in January 2007, polled more than 300 websites, 270 enterprises and 50,786 people around the country.
Source: China Daily

In China CTrip.com has the business travel business well under control. Think Orbitz or Expedia except for the fact that CTRP is effectively a monopoly. Bear Stearns estimates that the company holds a 57% market share of the Chinese online travel market and it has been growing.

The company’s future growth prospects remain bright because the online travel market itself in China is expected to grow at a 37% rate through 2010.

However, there is still the problem of the reluctance of the Chinese to use credit cards for booking on the Internet. And, in truth, China is just getting used to the idea of online travel booking. So the prospects for long term gorwth are pleasing.

Look at it another way. Bear Stearns estimates that the company only accounted for 2.7% of total hotel bookings in 2005, and 4% of total airline tickets in 2006. Take a medium term view abd by 2010 those figures will be around the 10% mark with plenty of room for growth.

Yes, the are other players in the market by at the moment it is CTrip right out there in front. This in the context of a robustly growing overall industry. Some of the major airlines have created their own online offering platforms, but at this point they have not been able to reach critical mass in order to effectively compete against CTRP. Nor, in truth is that likely for it takes a while for airlines to build up the infrastructure regarding total packages that are needed.

Citigroup notes that after Q2, management guided analysts to model 35% growth for Q3 but instead delivered 55% growth.

A look at industry trends shows that while hotel bookings are a strong cash flow driver for the company (and this business is expected to continue to grow), the primary growth engines will likely revolve around air ticketing and packaged tours. CTRP looks set on a winner.
Source: Seeking Alpha