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Analysys: The transaction size of the vacation travel market reached RMB 16.57 billion in 2016Q4, the moderate growth indicating the market's entry into a new stage from quantitative change to qualitative change.
According to the data in the Quarterly Monitoring Report on China's Online Vacation Travel Market in 2016Q4 released by Analysys Industry Database, the transaction size of China's online vacation travel market reached RMB 16.57 billion in the fourth quarter of 2016, with an increase of 27.5% over the same period last year.
  • 17 Apr, 2017
  • Travel
  • 209
Analysys: 
According to the data in the Quarterly Monitoring Report on China's Online Vacation Travel Market in 2016Q4 released by Analysys Industry Database, the transaction size of China's online vacation travel market reached RMB 16.57 billion in the fourth quarter of 2016, with an increase of 27.5% over the same period last year. According to the data in the Quarterly Monitoring Report on China's Online Vacation Travel Market in 2016Q4 released by Analysys Industry Database, the transaction size of China's online vacation travel market reached RMB 16.57 billion in the fourth quarter of 2016, with an increase of 27.5% over the same period last year. 
Due to seasonal factors, the transaction size of the online vacation travel market in the fourth quarter of 2016 declined compared with that in the third quarter; the increase reached 27.5% compared with the same period last year, the industry entering a stage of moderate growth. Analysys believes that, after the two-year rapid growth of China's online vacation travel market, the user size has reached a high level and the efficiency of traffic competition has declined. The core of market competition will change from the channels to the resources and services, and the extensive growth will change into fine operations. In the future, China's online vacation travel market will enter a new stage mainly characterized by the ability to improve services and a diversified product system.

The main development characteristics of the market in the fourth quarter of 2016 were as follows:

1. The integration of tourism and financial services was deepened.
In the fourth quarter of 2016, Ctrip launched the "Credit Guarantee" service for outbound travel, reducing the consumers' pressure of paying margin. Joyu, Fullshare and other companies jointly launched and established the Respublica Group for investment in massive tourism and massive health. Besides, Joyu and China Life established strategic cooperation. Shanghai Bank established Shanghai Shangcheng Consumer Finance Co., Ltd. in collaboration with Ctrip and other companies. China Construction Bank and LY.com established strategic cooperation on industrial finance and personal finance at multiple levels. Tuniu prepared to build tourism and financial ecosphere by establishing a group company.
Analysys believes that China's tourism market is entering a new stage from quantitative change to qualitative change and that the integration and symbiotic development of tourism and finance enhances the level of profits and promotes the overall consumption. On the one hand, the flow of large quantities of capital in the tourism industry, the improvement of the efficiency of capital utilization, the expansion of the sources of operating funds, and the reduction of the cost of capital are becoming the fundamental needs of the combination of tourism and finance. On the other hand, the continuous improvement of personal credit system and social credit system ensures the healthy development of consumer finance. Rising enthusiasm for tourist spending is expanding the consumer financial market space. Financial business has been creating more profit margins.

2. Overseas tourism government agencies attached importance to the Chinese market and promoted the cooperation between government and enterprises.
The chief national tourism special envoy delegation of the Hungarian government paid a visit to Ctrip, seeking tourism cooperation. Ctrip and the Australian Tourism Board established strategic cooperation on special promotion. The UK Tourism Board and Malaysia Tourism Promotion Board signed a strategic cooperation agreement on integration of the products of the Alitrip Malaysia Tourism Pavilion on the platform of Alitrip.com. Singapore Tourism Board was launched on the platform of mafengwo.cn and established strategic cooperation. Analysys believes that the number of Chinese outbound tourists is the world's first and the spending power is strong. The quality of tourists as a whole has been significantly improved, and the tourists are welcome in the tourist destination countries. The proportion of overseas tourism government agencies holding a positive attitude to Chinese tourists has increased significantly. The travel procedure for Chinese tourists has been substantially simplified. In the context that China's outbound tourism market still maintains high growth and the destinations of outbound tourism are diversified, online travel platforms' promotion of cooperation between government and enterprises and provision of high cost-effective and personalized outbound tourism options and high-quality services will be one of the core competitiveness of enterprises. 

In the fourth quarter of 2016, the market share of Tuniu and Ctrip was ranked first and second, respectively, with the proportion of 26.51% and 23.86%, respectively. With leading advantages compared with other businesses, they were in the first echelon. Besides, the total market share of Tuniu and Ctrip accounted for more than half. The market concentration effect was obvious.

In the fourth quarter of 2016, the transaction size of Tuniu was RMB 4.39 billion, with an increase of 29.1% over the same period last year, maintaining strong growth. The market share increased from 26.18% in the fourth quarter of 2015 to 26.51% in the fourth quarter of 2016. Tuniu continued to strengthen the cooperation with the upstream resource side in the same quarter. On the one hand, Tuniu carried out comprehensive strategic cooperation with domestic and foreign airlines, including the creation of the joint "Holiday" brand, "Airline Company Brand Day", "Airline+ X" in-depth packing, marketing in special areas and other cooperation models. On the other hand, Tuniu strengthened the hotel coverage at home and abroad and developed the "Wine + X" products rapidly, forming a differentiated competitive advantage. Besides, Tuniu accelerated the upgrade of the membership system and launched the "Membership Strategy", further enhancing the membership service capacity. In October, 2016, Hainan Airlines once again announced to hold more shares in Tuniu, with the proportion of more than 26.61%. Analysys believes that Tuniu attempts to enhance the user experience by strengthening the fine operation in the product and service system and providing differentiated "Travel+" services by way of film and television, finance, etc.

The size of Ctrip's online vacation travel transactions reached RMB 3.95 billion in the fourth quarter of 2016. It increased investment in outbound travel destinations, finance and customer services in the same quarter. With respect to outbound travel destinations, Ctrip established government-enterprise cooperation on integration of local tourism resources with the Hungarian National Tourist Office and the Australian tourism authority. In the United States market, Ctrip created a linkage mechanism of cooperation in collaboration with its subordinates like Universal Vision, Ctour Holiday, and Toursforfun.com. With respect to finance, Ctrip launched the outbound travel "Credit Guarantee" service, providing an alternative for the users' outbound travel margin. Besides, it established Shanghai Shangcheng Consumer Finance Co., Ltd. in collaboration with Shanghai Bank. With respect to customer service, G.ctrip.com established cooperation Laox, Japan's largest tax-free chain, to enrich global purchase products. The "Full-process X Plan" for one-stop linkage services was introduced.

In the fourth quarter of 2016, the trade share of LY.com and Lvmama.com was 14.28% and 14.09%, respectively, up 1.67% and 3.38% over the same period last year, respectively. They were both in the second echelon.

In the fourth quarter of 2016, in addition to the further upgrade of the strategic position of the Longevity Tourism Club, LY.com established cooperation with Tourism TV and strengthened the brand promotion of the Longevity Tourism Club. Besides, it strengthened the offline travel agency resources, including Wanda Tourism Beijing. With respect to finance, LY.com established strategic cooperation with China Construction Bank to carry out business collaboration regarding supply chain finance and consumer finance.

In the fourth quarter of 2016, Nanjing Fullshare Industrial Holding Group (FIHG) purchased shares in Joyu, the parent company of Lvmama.com, by paying an amount of investment totaling RMB 700 million. Lvmama.com continued to upgrade in terms of financial business. Joyu, Fullshare and other companies jointly established the Respublica Group for future investment in massive tourism and massive health and formation of a big happiness industry closed loop by way of linkage development. Joyu and China Life established strategic cooperation and carried out diversified tourism and industry cooperation in the field of tourism. Besides, Lvmama.com upgraded the Xiaolv Fenqi by officially introducing the mobile client. With respect to product operation, Lvmama.com sold the tickets of 5A scenic areas as an exclusive agent, such as Mount Huang, Mount Heng and Mount Sanqing, and established cooperation on promotion of local tourism products with the Lhasa Tourism Bureau and the Hungarian tourism envoy. Besides, it provided the theme tourism products like "Ten-thousand-person Self-driving Travel to Mount Huang", "Red Travel to Yan'an", and "Self-driving Travel to Northwest China". For the building of IP, its efforts were witnessed in the services, products and channels. In addition to Datong Lvmama's issuance of tourism innovation fund totaling RMB 2 billion for the first time and its launching of "Quality One-day Trip", Lvmama.com set up a tourism electronic ticket research center in collaboration with Fudan University and set up a film and television company together with Huace to build film and television IP. Lvmama.com has 110 subsidiaries and more than 1,000 stores in China. Analysys believes that Lvmama.com has created a differentiated self-help travel special product model by way of constant promotion of coverage of offline tourism resources, improvement of the O2O system, and improvement of the operation of products and services.

For more information about the online travel market, please pay attention to the WeChat official account of Analysys or call the customer service (+1) 3124666911/(+8610) 64666565/(+86) 13810406718. 
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