March 16, 2018

Ctrip’s smooth ride has been rudely interrupted

China’s largest OTA said its revenue growth will likely slow sharply this quarter, down to 9% to 11% from 39% growth for all of 2017.

The slowdown is coming partly because Ctrip will this year no longer get a bump from its $2 billion acquisition of Skyscanner in 2016. The company started including earnings from the British travel website last year.

A regulatory change from last summer is set to keep hurting Ctrip as well. China’s aviation regulator asked travel websites in August to stop bundling services like insurance or hotel vouchers when they sell air tickets. Ctrip’s transport ticketing revenue fell 15% sequentially last quarter, despite China’s so-called “Golden Week” in October, when many Chinese take vacations.

And Ctrip is no longer the only game in town. Chinese people have been traveling more as they get richer - they made more than 5 billion trips domestically and 131 million abroad last year - but now Ctrip faces serious competition from deep-pocketed rivals.

Get the full story at The Wall Street Journal and Bloomberg