In The Big Chair - Jane Sun of Ctrip

Jane Sun, CEO

Founded in 1999, Ctrip is China's largest online travel agency. It also operates Skyscanner - which it bought for $1.7BN in 2016 - and Trip.com and is broadening its relationship with global powerhouse Booking.com.

Jane Sun joined Ctrip in 2005, becoming CEO in 2016. She sees opportunities in tours and activities for Chinese travelers and hopes international business will account for 40% to 50% of revenues in five years.

Ctrip is continuing to ride the wave of growth in outbound tourism from China. But what other trends can help drive the overall business?

In 2017, Chinese travelers made 131 million overseas trips and topped in overseas travelers’ lists in Thailand, Japan, Vietnam and many other countries. Chinese travelers also like to spend when they travel abroad, and they spent $115.29 billion USD in 2017. Other factors such as visas, direct flights and exchange rates also help drive the overall business of outbound tourism.

According to Ctrip’s report, as many as 100,000 Chinese traveled to Russia during 2018’s World Cup. Russia has adopted flexible visa policies towards Chinese travelers such as waiving visas for tour groups and electronic visas at the Far East region.

There are about 20 direct flights from China to Russia every day, providing 4,000 seats, and most flights have 90% or more occupancy rate. The higher exchange rate from Chinese yuan to Russian rubles makes traveling to Russia more valuable, and this contributes to growing outbound tourism to Russia from China as well.

The appointment of Gillian Tans to the Ctrip board points to a strengthening relationship with Booking Holdings. How do you view the synergy between the two companies?

The synergy between Ctrip and Booking Holdings has appeared in many aspects. Ctrip and Booking.com will both open hotel inventory to each other. We look forward to deepening the relationship between the top two global travel platforms.

I am confident that our combined resources will bring more innovation and value to global travelers. Before this appointment, Ctrip has already established partnership with OpenTable under Booking Holdings, and our users can book restaurants in North America thanks to this partnership.

What in Booking Holdings’ portfolio do you view as the biggest competition to Ctrip or your subsidiaries?

Ctrip and Booking Holdings’ cooperation started many years ago, and we welcome competition in the online tourism industry. Competition helps us focus on what our strength is, and I hope our team concentrates on providing better services to our users.

In the first half of 2018, Ctrip’s custom tours booking increased 230% compared with 2017.

Jane Sun

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Ctrip’s main competitiveness is that we provide users with one-stop service. Air ticket, hotel, rental car and other travel products, all could be booked through Ctrip.

Ctrip has focused its efforts on personalization through partnerships with AccorHotels in hospitality and iClick for marketing efforts. What other strategies or partnerships are in play to advance personalized offerings to Ctrip consumers?

Ctrip signed a memorandum of understanding with AccorHotels this April. AccorHotels is the largest hotel group in Europe and provides a wide range of hotels from Ibis to Sofitel, and also serviced apartment and vacation hotels. This partnership will bring more personalized services to our users.

Ctrip has 300 million users and produces 50 terabytes of data each day. In cooperation with iClick, Ctrip can provide users with more personalized solutions supported by iClick’s strong data analysis ability.

What has been the biggest payoff from acquiring Skyscanner in 2016?

After acquiring Skyscanner for more than one year, we have seen the synergy effect between two companies, and Skyscanner helps Ctrip establish a solid foundation for providing services to non-Chinese customers.

According to the financial report, direct bookings from Skyscanner doubled in the fourth quarter of 2017 compared with the same period in 2016, and we are pleased to see the robust growth continuing in Skyscanner in 2018’s first quarter. Monthly active users) of Skyscanner reached 80 million in the first quarter of 2018, a 30% increase compared to 2017.

What is the strategy around adding more direct booking partners to Skyscanner?

Before Ctrip’s investment, Skyscanner has already firmly established itself as one of the most credible brands for flight search globally. The organic growth continues to grow fantastically.

Since the investment, we have been supporting Skyscanner with direct booking rollouts. There are about 20 direct booking partners on Skyscanner’s platform now. Users on Skyscanner can now search, click and transact more seamlessly. As a result, we’ve seen a good increase in transaction conversion rates.

Secondly, we are working with Skyscanner on rolling out more travel product search capabilities. This is still in the initial phases, but now on Skyscanner you can also search for cars for airport services. There are still a lot of work ahead and synergies to be realized between the two companies.

It’s been a challenge for Western travel brands to successfully tap into the Chinese market. What about Chinese travelers do they need to better understand?

Chinese travelers are different from Western travellers in many aspects. A very simple example is that Chinese travelers prefer hot water than cold water, however, many hotels in Europe do not provide a kettle.

Ctrip now has cooperation with hotels in some popular destinations to provide our users with kettles, Chinese TV channels and Chinese-speaking hotel staff. Western travel brands need to understand Chinese users’ needs if they want to tap into the Chinese market.

What opportunities do you see in the tours and activities space?

We have found that our users are more interested in custom tours and activities and also tours with cultural experiences.

Take France as an example: Our users want to experience French culture and lifestyle.

Last year, we established a partnership with Le Cheval in France to provide our users with an equestrian-theme tour.

Chinese travelers are no longer satisfied with traditional tours and activities, and they love to experience more local culture when travel.

We are seeing that spend on “experience is growing faster than shopping.” In the first half of 2018, Ctrip’s custom tours booking increased 230% compared with 2017.

How do you view Google as a threat to both Ctrip and the travel industry at large? What about Amazon or Alibaba or Meituan-Dianping?

We think every company has different DNA. In Ctrip, we focus on the travel industry, and our business relates to different aspects of travel industry. Google’s DNA is search engine, and Alibaba’s DNA is e-commerce, but travel industry is more complicated, and we have different earning ability.

We welcome competition in the industry since the market is big enough. Ctrip only takes about 10% of market share in the Chinese travel industry, and we have plenty of space to grow. Globally, we’re still a tiny fraction of the travel pie.

Competition promotes the development of the travel industry. There are new competitors every year, but I tell our team to focus on better serving our users. We always put our users’ needs at the first place and spare no efforts on providing better services to them.

Ctrip made a strategic investment in MakeMyTrip a few years ago. Did it - and the Skyscanner deal - signal the start of a wider acquisition strategy in other global markets?

Ctrip is very cautious when investing in overseas markets, and we follow our principles strictly in either strategic investment or acquisition.

Ctrip is very cautious when investing in overseas markets, and we follow our principles strictly in either strategic investment or acquisition.

Jane Sun

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First, we only invest in companies related to the travel industry; second, we only invest in number one- or number two-ranking companines in the industry; third, we choose the right time to invest. We have to make sure that we bring the best products to our users.

Ctrip’s investment strategy follows our users’ needs, and we bring them the best travel experiences. For instance, our investment in Chinese tour agents in the United States is to provide better services for our users when traveling in North America.

How has Ctrip’s Baby Tiger program helped foster innovation?

The Baby Tiger program is part of Ctrip’s innovative mechanism. In the past, decision making was from top to bottom at Ctrip as at most of other companies. In order to make a change, Ctrip has initiated an in-house innovative mechanism: the Baby Tiger program.

Following the program, every business unit has its own CEO, CTO and CFO. Recruitment plans, resource allocation and other decisions can be made within the business unit, and this has activated tremendous potential of employees from each business unit.

You’ve been at Ctrip since 2005 - what has been the most exciting part of the company’s evolution?

The evolutionary part of an online travel agency is that it connects airlines, hotels and all other types of business in the travel industry and breaks the original boundaries. At Ctrip, we make it possible to provide one-stop service to users through our platform.

You can book a flight ticket from Shanghai to New York, and we will recommend five-stars hotels if you book a first-class ticket. After the hotel being booked, airport pickup services will be introduced, and popular restaurants and tourism attractions in your destination will also be pushed to you through our app.

Ctrip has invested a lot on ABC (artificial intelligence, big data and cloud computing) to ensure our users are having the best experiences supported by the latest technology.

What are the most rewarding and challenging aspects of your job as CEO?

Ctrip’s mission is to make the journey happier, and the most rewarding aspect of being a CEO is to see our users have happier and more pleasant trips through Ctrip. Also, I feel awarded to see our employees grow their career paths at Ctrip.

In terms of challenges, I think I have the similar challenges as other CEOs. Our customers’ needs are evolving. To satisfy and exceed their expectations is always our goal. Also for travel, natural disasters and regional instability have created challenges for our customers. We have established travel SOS service to provide our customers assistance in an emergency.

How do you motivate your team?

There are many ways to motivate my team, and as I mentioned previously, the Baby Tiger program is part of our innovation initiative to activate our employees’ potential by giving them more power and resources.

The business world is results-driven, and when we set up a goal, it is non-negotiable. We ask our employees to make the impossible possible with our customers. And we will give our team full support if they need any help in their lives.

Where do you see Ctrip 10 years from now?

In 10 years from now, Ctrip will continue to develop in China and expand globally. Our air ticket service covers more than 200 countries and 5,000 airports, and we have built a one-stop shopping platform. We hope that our international business accounts for 40% to 50% of total revenue in five years.