China's Online Travel Market Went up Steadily in Q2 2016

Source:iResearch September 14,20162:36 PM
China’s online travel GMV amounted to 143.01 billion Yuan in Q2 2016, growing 8.9% compared with the previous quarter and soaring 31.3% from a year earlier. and China’s online travel agencies’(OTA) revenue reached 7.04 billion Yuan, rising 46.1% from a year earlier. Moreover, the share of online airline booking, online accommodation reservation and vacation services in China’s online travel market did not change obviously in Q2 2016, and f online airline booking still took the leading position with a market share of 57.2%. 

China’s Online Travel GMV

Data from iResearch shows that China’s online travel GMV amounted to 143.01 billion Yuan in Q2 2016, growing 8.9% compared with the previous quarter and soaring 31.3% from a year earlier.

iResearch views that the online travel market will expand in the future with the further development of information technology and increasing usage of Internet in China, and online travel will be welcomed by more and more people. The online and offline cooperation among travel companies will be increasingly close as well. Online travel companies will develop offline business and offline ones will explore online market. What’s more, the demand of online travel will stimulate travel services providers to accelerate the informationization process, which will accelerate the growth of online travel sector. 
OTAs’ Revenue

Data from iResearch shows that compared with the same period of the previous year, revenue of China’s OTAs increased 46.1% to 7.04 billion Yuan in Q2 2016.

With fast development of online travel, the concentration rate of large OTA companies increased recently and the customer always regarded the giants as their first choice, thus the room for start-up’s development was reduced. As a result, lots of innovative start-ups encountered bottleneck in Q2 2016. Some of them even declared bankruptcy, such as Taozailushang and Maidou. Meanwhile, new start-ups decreased as well. 

However, the categories of sub-sectors were enriched for new sub-sectors emerged, such as travel tools, travel communities, theme travels and tourism information. At the same time, the competition among OTA giants became increasingly fierce. Those giants made great efforts to explore new business while consolidating the market position which they captured. For instance, Ctrip, LY and Lvmama started their sports travel business in Q2 2016.
Online Travel Market Structure 

According to data from iResearch, China’s online travel market structure was stable in Q2 2016. 

Online airline booking, as the most mature section in China’s online travel market, decelerated its growth. In H1 2016, airline companies gradually adopted direct selling modes instead of indirect selling, which did not only reduce the selling cost but also better knew customers’ consuming demands and habits and form a solid data foundation for airlines to provide more value-added services to customers. This led to the more frequent cooperation between OTAs and airlines in order to achieve win-win results.

The online accommodation reservation market kept a steady growth in Q2 2016. With the promotion of “region-based tourism”, non-standard accommodations will be increasingly popular, since the unique experience they offer better meet customers’ individual demands.

Online vacation GMV enjoyed a steady growth too. It’s expected to have a huge potential in the future.

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