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Price war among China’s OTAs escalates

August 21, 2012 | Online Travel

In August, industry leader Ctrip.com launched a new wave of sales promotions with the slogan of "you will discover that you can save more with Ctrip than with other websites," promting eLong to respond with "we can beat Ctrip's discounts by 10%."

Online travel agents have a pronounced focus on price cutting rather than upgrading product experience and service.

In August, industry leader Ctrip.com launched a new wave of sales promotions with the slogan of "you will discover that you can save more with Ctrip than with other websites." This is widely seen as Ctrip's counter to successive promotions recently launched by other online travel companies, Elong.com, Mangocity.com and Kuxun.cn. Speaking at the end of July, Xie Hang, Deputy General Manager (Marketing) of Mangocity.com said: "We proceeded with the second round of our sales promotion starting on August 1 and invested 80 million yuan (US$12.57 million) to strengthen the marketing plan which we finalized in July."

In response to Ctrip's promotion, Elong declared: "We can beat Ctrip's discounts by 10%", and the company also stepped up its outdoor advertising campaign.

In the wake of this, Ctrip announced that they were launching a " cash for comments" scheme on all of their tours, as well as offering huge discount on hotel and plane tickets.

Yang Yanfeng, associate researcher of the China Tourism Research Institute, said that the price war which has erupted between the firms will lead to a restructuring of the online travel industry, with low-profit small and medium-sized companies being squeezed and likely forced out of business.

Get the full story at China.org.cn

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