The Growth of China's Online Travel Market Decelerated in Q2 2017

Source:iResearch September 18,201711:39 AM
The GMV of China’s online travel market approached 176 billion Yuan in Q2 2017, rising 24.8% from an earlier year. But the year-on-year growth decreasing 3.9% compared with that in Q2 2016. According to iResearch, for the demographic dividends in Internet-related industry vanished and the cost for winning customers through Internet increased, top online travel enterprises began to open their brick-and-mortar stores. As a result, online travel market grew more slowly. 
The data from iResearch show that the revenue of Chinese OTAs hit 9.25 billion Yuan in Q2 2017, with the year-on-year growth of 35.6% However, the growth of the revenue of Chinese OTA decelerated compared with that of Q2 2016. iResearch holds the opinion that with the demographic dividends decreasing, OTAs have shifted their focus to offline market and began to open brick-and-mortar stores in third-tier and fourth-tier cities. Therefore, their online market would enter a period of stable development.
In China’s online travel market, online vacation booking service saw its market share increase by 0.8% from Q1 to 16.5% in Q2. The sustained growth of China’s online vacation booking service was driven by the increasing consumption of vacation-related services in Q2 when there were more short vacations for people to travel.

Online flight ticket booking service still accounted for half of the online travel market but saw a decrease in the market share.
In Q2 2017, the online flight ticket booking service accounted for 58.9% of China’s online travel market, down 2% from Q1. The share of online flight ticket booking increased a bit in Q1 because people who traveled by flight to visit relatives or friends soared during the Spring Festival holiday. In Q2, people traveled mainly for vacation or business, and the market share of online flight ticket booking service decreased. 

There were many short vacations in Q2, which led to the increase in demands for accommodations. Therefore, the share of China’s online accommodation booking service increased by 1% from Q1 to 20.2% in Q2 2017.

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