China OTA's Revenues Surges 26.2% in 2013

Online travel agents' (OTA) revenue hit 11.76 Billion Yuan in 2013, surging 26.2% compared with 2012.

Due to the ongoing and extensive price war, the growth of online travel agents in 2013 was slower than that of the whole online travel market. Since Q3 2013, OTA players including Ctrip and eLong launched price battle on mobile. OTA companies invested heavily in mobile services to vie for mobile travel market share. The frequent cash rebates gave rise to a decline in the commissions of hotel and air ticket bookings. We predict that the price war will go on in mobile travel sector and other segments. Nevertheless, OTA revenue will maintain robust growth in the long run.

 Ctrip Captured Almost Half of the Market Share. According to iResearch, Ctrip made up 49.7% of China OTA revenue in 2013, followed in turn by eLong at 9.7% and 17u at 6.1% in the China OTA market.

Top players enjoyed respective advantages in the market and OTA landscape remained stable. Ctrip and eLong had good control over the channel and strong bargaining power. Their ongoing hotel promotions in 2013 drove up their share in the market. 17u had been leading travel ticket booking market. However, along with the establishment of Ctrip’s Offline Sales Team which focuses on admission tickets, 17u will be challenged in ticket sales. 118114 maintained stable growth by leveraging its strength in flight and hotel bookings.

In the second half of 2013, OTA players eyed mobile travel market. As Ctrip, eLong and others launched heavy promotions on their mobile apps, mobile travel sector became the new battlefield for OTA participants.

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