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Analysys Analysis: Competition Trend of Online Holiday & Tourism Gradually Shifts from Market Exploration to Industrial Perfection in 2017Q2 with Competition Highlights on Service Quality and Individualization
According to the Quarterly Monitoring and Analysis on China’s Online Holiday & Tourism Market in 2017Q2 issued by Analysys, in the second quarter of 2017, the transaction scale of China's online holiday & tourism market was up to RMB 21.769 billion, a year-on-year increase of 28%.
  • 20 Oct, 2017
  • Travel
  • 99
Analysys Analysis:
According to the Quarterly Monitoring and Analysis on China’s Online Holiday & Tourism Market in 2017Q2 issued by Analysys, in the second quarter of 2017, the transaction scale of China's online holiday & tourism market was up to RMB 21.769 billion, a year-on-year increase of 28%.  
The transaction scale of China's online holiday & tourism market in 2017Q2 was increased by 28% on a year-on-year basis, which was slightly lower than that of 2017Q1. And the market growth tended to be stabilized. As analyzed by Analysys, there’re relatively few long holidays in 2017Q2 and the consumption on holiday & tourism was mainly focused on medium and short distance tours and suburban tours. 

Major market development features in 2017Q2:
1.    Upgraded Package ToursHighlighted OTA Service Values
In 2017Q2, with the guidance on the policies against unreasonable low price tours by the National Tourism Administration and great supports by major OTA service providers, a great number of low price and low quality products were called off. And the quality of package tours became a new market highlight.
From the aspect of policies, the state and local tourism administrations successively promulgated related administrative regulations to enhance the fighting and management on cutthroat competitions such as low-price tours, designated souvenir shops, unfair competitions, illegal commissions and illegal one-day tours.
From the aspects of enterprises, Tuniu appealed that the value of “customer-oriented” should be adhered to for packaged tours and the values of the services offered by the tour guides and tour leaders should be exerted. In addition, it was making continuous efforts to improve the services its own package tour brand “Tuniu Dedicated Lines” as well as its other products not included in the “Tuniu Dedicated Lines”, to work on the comment-based rewarding system for tour guides and to explore the excitation mechanism featuring “customer-oriented” among its contracted tour guides and tour leaders. Ctrip released its new diamond standards for packaged tours and new packaged tour product line "Ctrip Premium Tours". Efforts were made to upgrade the current products and adhere to the brand-based development route. Lvmama launched its brand new upgrading on its “Lvmama’s Happy Tours” to completely cut off recessive consumptions. Other efforts included compensation by special tourism funds if the tour group is cancelled for some reasons, etc. Meituan Tour also accessed to the packaged tour market and released its “Meituan Dedicated Lines”, which eliminated shopping from the schedules and made the best of the customer evaluation mechanism.
2.    New Market Trends Guided by Themed Niche Products
In 2017Q2, OTA service providers integrated customer tourism experience with seasonal features, local folk customs, popular film and television, etc., endowed special scenes and IPs for tourism products and lines and tried to satisfy the enriched and delicate inner demands of various consumers with diversified product systems. Themed products on graduation, cuisine, etc. were highlights of products in this quarter.
As for the customized tour with higher individualization levels, first, capital investment was further intensified, of which Lushu was awarded Round A financing of RMB 10 million level in this quarter. Second, 6renyou, which was involved in contractual disputes with Ctrip on commissions, joined hands with Fliggy (Alitrip) this quarter, which made the customized tour that had already in the center of contention even more highlighted within the industry. Third, several providers such as Navi Travel (Zhinanmao), Ctrip and Tuniu’s Pengpai Customized Tour were all exploring industrial standards, which mainly included the standardization and systemization of customer services and supplier management, etc. 

Market Shares of Key Players in 2017Q2:
1.    First Echelon
In 2017Q2, the market shares of Tuniu and Ctrip still ranked first and second respectively, which were respectively 26.83% and 22.84%. Both were listed in the First Echelon with remarkable leading superiorities to other service providers. Meanwhile, the total market share of Tuniu and Ctrip took up over a half of the total market size, marking the obvious market concentration effects.
In 2017Q2, Tuniu continued the enhancement of the ecological system of the supply chain and overall upgrading on membership service system in a systematic manner. With professional tour guide teams and experienced and considerate product purchase teams, since the establishment, Suiwang, the local travel agency brand operated by Tuniu, had been spoken highly of by the customers. In addition, based on the original customer comment system, Tuniu launched the brand new resource comment system. With the new resource comment system, the customers may make detailed comments on the single resources such as hotel and ticket in the individual category of hotel, ticket and holiday. Effective sharing and product satisfaction calculation were enabled with such comment data and the customer comments were further refined.
In 2017Q2, the transaction volume of online holiday & tourism of Ctrip was up to RMB 4.972 billion. With the M&A on Qunar and Travelling Bestone, Ctrip began its outlet distribution all across the country.   
2.    Second Echelon
Tongcheng and Lvmama were listed in the Second Echelon in 2017Q2, with transaction shares respectively of 14.52% and 14.35%.
Focusing on service experience of the customers, Tongcheng made comprehensive upgrading on several links bearing close relationship with the customers such as product, customer service and off-line experience store. The mode of “On-line + Off-line + Experience” was further deepened to satisfy the demands of subdivided customer groups with high quality services.
The year 2017 is Lvmama’s “Quality Year”. Lvmama further deepened the development on individualized and diversified holiday & tourism products, signed strategic cooperation agreements with local governments and launched themed and IP-based holiday experience. In addition, Lvmama made brand new upgrading on its family tour brand “Lvmama’s Happy Family Tour” to extend the product line from mainly on suburban tours to comprehensive categories including one-day tour, domestic tour, overseas tour, etc.
According to Analysys, in 2017Q2, the market scale of online holiday & tourism was continuously expanded, the user habits were continuously deepened and the lifestyles of holiday & tourism were gradually being accepted by the market of a wider range. To respond the market demands of refined operation, the service providers were continuously driving service subdivision and individualization upgrading of products and services by positively exploring upstream resources of the industrial chains and optimizing operation efficiencies of the enterprises. Focus was shifted from market exploration to industrial perfection to collectively drive the healthy development of the market.
For more information about the online tourism market, please keep an eye on Analysys's official WeChat account or call at 4006-515-715 for customer services.
 
Research Notes:
Industrial analysis provided by Analysys is made mainly based on macroeconomic industrial data, final quarterly user survey data, historical data of the companies, quarterly business monitoring information of companies, etc. by Analysys's industrial analysis models with reference to market research, industrial research and company research approaches. And such analysis mainly reflects the market status quo, trends, break points and rules as well as the development status quo of companies.
Analysys believes that the data drawn according to the abovementioned industrial research approaches is within the recognized acceptable error range within the industry and can accurately reflect the industrial trends and change rules.
Such research outcomes made based on professional research approaches aim to provide decision reference.  For the actual data of a specific company, please refer to the financial reports released by that company.
 
Analysys Overview:
Analysys is a leading big data analysis company in the Chinese market.  Since the establishment, Analysys has established the big data and analysis service ecological system cored by massive digital user assets and algorithm models. Analysys has been dedicated in providing product services such as digital user portraits and competition analysis and assisting in product operation for enterprises; and assisting enterprises in increasing revenues, saving expenditures, increasing effectiveness and evading risks by operation and management on digital user assets of the enterprises.  The products in Analysys Family include Analysys Qianfan, Analysys Fangzhou, Analysys Wanxiang and Analysys Boyue. By June 30, 2017, Analysys had covered 2.07 billion intelligent terminals and monitored over 2.05 million mobile APPs.
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