Online travel sector hots up in China

7th Apr 2006

The sizzling online traveling market in China now is seeing another suitor from Hong Kong, China Travel International Investment Hong Kong Limited (CTI), it will face fierce competition from and, both are NASDAQ-listed Internet heavyweights. CTI invested as much as CNY 1 billion and set up the, which will be an online traveling platform providing services of ticket booking, hotel reservation, search, and traveling guide.

CTI is a company whose core businesses are travel-related businesses. The principal businesses of the CTI include tour operation, hotels, theme parks, passenger and freight transportation, golf club and infrastructure investment.

The spokesperson for CTI says that is going to further sharpen its competitiveness and expand its orbit through purchases or acquisitions. The spokesperson declined to disclose names of the targeted companies.

Insiders close to CTI say that the company has been building up a network that consists of a long list of tourist agencies in China’s mainland during the past two years. Now it is all systems go for the business.

“The online traveling sales merely account for less than 1 percent of the whole traveling market for China, it has huge potential,” says an executive from CTI. ”


On top of CTI, Guangzhou Travel Corporation (CTC), the bellwether of the tourism industry in Guangzhou, Guangdong Province, lately extended its tentacles to the online traveling field by joining forces with more than 20 hotels.

CTC says that with the helps of these hotels its room prices can be 10 percent cheaper than that of its competitors.

CTC has taken an inside tract over its counterparts by taking an advantage over its abundant industry resources and low procurement cost.

As a traditional, established tourism agency, CTC can provide its online subscribers with better traveling services based on its profound experiences over tourism.

With participation of the newcomers, the cut-throat competition in the online traveling market is getting fiercer than ever before. And they have broken up the monopoly of, and

Latest numbers from Analysys International indicate that China’s online travel services market reached CNY 254 million in the fourth quarter of 2005, among which airline ticket booking serviced CNY 77 million, hotel reservation serviced CNY 165 million, and travel arrangement serviced CNY 12 million.

According to the research report China Online Travel Services Market Quarterly Tracker Q4 2005, recently released by Analysys International, hotel reservations is the major business of online travel, accounting for 64.96 percent market share.

Currently online travel service providers can get an average commission of CNY 47.82 per ticket from airline reservation services, which is lower than the room reservation service commission of CNY 59.78 per room per night.

Analysys International says the total transaction amount of online travel in China reached CNY 5 billion in 2004 and net income of the online travel channels was CNY 680 million. Analysys International estimates China’s total transaction amount of online travel will reach CNY 7 billion in 2005, up 40 percent compared with the year 2004.
Analysys International says China’s online travel market will develop at an annual growth rate of 82.2 percent from 2005 to 2009 and the market size will reach CNY 77.2 billion by 2009.



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