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Analysys:China’s Online Hotel Booking in 2017Q4|New Middle Classes Promoted the Upgrade of Hotel Quality, and Investors Were Still Optimistic about Non-Standard Accommodation Products
According to the monitoring data of Analysys, the transaction scale of China's online hotel booking reached RMB 39.74 billion in the 4th quarter of 2017, up by 21.3% compared with the year earlier. Analysys held that with higher requirements for accommodation experience, hotels upgraded products and introduced new technology to improve user experience and developed a variety of business patters in search of new profit growth points. On the other hand, OTA companies adopted a combination of measures to increase transformation rate, including technology upgrade, booking experience optimization, and resource integration. Thanks to the promotion by both users and the companies, the market scale of online hotel booking remained its rapid growth.
  • 12 Apr, 2018
  • Living Services
  • 51
According to the monitoring data of Analysys, the transaction scale of China's online hotel booking reached RMB 39.74 billion in the 4thquarter of 2017, up by 21.3% compared with the year earlier. 
Analysys held that with higher requirements for accommodation experience, hotels upgraded products and introduced new technology to improve user experience and developed a variety of business patters in search of new profit growth points. On the other hand, OTA companies adopted a combination of measures to increase transformation rate, including technology upgrade, booking experience optimization, and resource integration. Thanks to the promotion by both users and the companies, the market scale of online hotel booking remained its rapid growth.

Online Hotel Booking: Ctrip-Related Companies further enhanced industrial penetration, and the multiple-platform competition unfolded
In this quarter, OTA companies constantly mined user value and launched a tough fight for traffic by forming a group. The performance by Ctrip-related companies grabbed the attention. After announcement of a combination, eLong and LY.com integrated the resources provided by their shareholders, Ctrip and Tencent, while melding their membership platforms. Thus, they obtained the access to WeChat, laying a solid foundation for traffic growth. Meanwhile, Qunar set about a combination with Federation Hotels Group and integrated their membership systems for sharing rights and interests, with a hope to build a new tourism ecosystem.
On the other hand, based on a high-traffic platform, Meituan and Fliggy input continuous efforts in online hotel booking, intensifying competition. In this quarter, MeituanDianping received a new round of investment, USD 4 billion, and introduced a new strategic investor, The Priceline Group (currently known as Booking Holdings), which will provide timely financial support for its business development and strategy implementation. At the end of the year, it announced that the total number of room nights hit 200 million in 2017 and was upgrading its products to a high-star level. Fliggy was promoting low commission and adopting VR strategy to make panoramic view rooms available, in an attempt for realize comprehensive upgrade in user booking experience. 
According to Analysys, as for online hotel booking, Ctrip has expanded its layout and enhanced its capacity for horizontal combination. It will lead the market in the near future thanks to the higher industry barrier it has built over years. But Meituan and Fliggy can not be underestimated in consideration of their high traffic. Their differentiated operational plans make Ctrp-related companies unable to let the guard down even for a short while. In the future, the uncertainties in online hotel booking will be added by Meityan and Fliggy. 
Online Non-Standard Accommodation Market: Investment was input in homestay market, driving the growth of sharing economy
In this quarter, leading non-standard accommodation players like Tujia, Airbnb, and Xiaozhu continuously won investment. In particular, Tujia, Airbnb, and Xiaozhu respectively received USD 300 million, USD 550 million, and USD 120 million; in addition, Muniao and Qmango also completed another round of financing. This can prove the investors’ expectation for non-standard accommodation. 
In addition to financing, players also upgraded their technology and products. Tujia launched luxury products, which became a hit during National Day and Mid-Autumn Day; Airbnd promoted AA payment for group tours and improved its products and technology through a series of means like AI talent introduction and AR/VR technology application. 

China’s Market Structure of Online Hotel Booking in 2017Q4: Stable Market Structure and Improved Resource-End Products 
The market structure of OTA in online hotel booking was stable. In the quarter, Ctrip, Qunar, and Meituan Dianping respectively recorded transaction scale worth of RMB 18.745 billion (47.2% market shares), RMB 5.05 billion (12.7% market shares), and RMB 5.00 billion (12.6%). 
The rising of new middle class makes accommodation products no longer merely serve as a lodging place, and users prefer high-quality service. Such consumption change promotes the upgrade of accommodation products. Particularly, hotels upgrade their products one after another, with a hope to make breakthrough in mid-end hotel market. In this quarter, HTHT announced to eliminate its disqualified outlets and to enterically increase and improve mid-to-high-end hotels; Plateno Group pinpointed the user requirements of new middle class in mid-end market through crossover marketing and customized experience. 
In addition, the hotels have become a test plot for sharing economy to expand profit channels and enrich products. For example, Homeinns and Ucommune together made a try in the area; Hotel Jen Beijing opened China’s first co-working space in a hotel.  
For more information about theonline hotel booking, please keep an eye on Analysys's official WeChat account or call at 4006-515-715 for customer services. 
Research Notes
The industrial analyses provided by Analysys is mainly made based on macroeconomic industrial data, final quarterly survey data about users, historical data of the companies, quarterly business monitoring information of companies, etc. by means of Analysys's industrial analysis models and with reference to market research, industrial research, and company research approaches. In addition, such analyses mainly reflect the status quo, trends, break points and rules of the market as well as the development status quo of companies.
Analysys believes that the data drawn in accordance with the abovementioned industrial research approaches is within acceptable error range as genially recognized within the industry and can accurately reflect the industrial trends and change rules.
Such research results drawn by professional research approaches are merely for decision reference. For the actual data of a specific company, please refer to the financial reports released by the same.
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