Ctrip posted gains in all of its major categories in the
second quarter of 2018, with total revenue of $1.1 billion, a 13% increase over
the same period in 2017 and a 9% increase from the three months prior.
The biggest jump within its core business came in the
packaged tour category, which posted a 31% increase in revenue year-over-year
to a total of $127 million. In its earnings statement, the Shanghai-based company
says the increase was “primarily driven by an increase in volume growth of
organized tours and self-guided tours.”
Corporate travel revenue was also a bright spot with a 28% jump
in revenue in the second quarter compared to the same period in 2017 to $38
And accommodation revenue was also strong in the second
quarter. Ctrip says that sector generated $425 million, a 21% increase over a
year earlier, primarily driven by an increase in accommodation reservation
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Only transportation revenue was nearly flat, bumping up 1% compared
to the second quarter of 2017 to a total of $457 million.
The company says it is also seeing more user engagement from
consumers in “targeted lower-tier cities,” where usage increased 40% year-over-year.
On the international front, the company says it is
continuing “to make great strides.”
Excluding Skyscanner, Ctrip reports the volume of its international
hotel and air business grew 40%, attributed to “the robust growth of our outbound
travel business and the popularity of Trip.com.”
The most striking statistic in Ctrip’s earnings report
comes from Edinburgh-based Skyscanner, which it acquired in 2016 and which delivered
revenue growth in its direct booking program of approximately 600% year-over-year in the second quarter of 2018.
"Ctrip delivered solid
results in the second quarter of 2018," says Ctrip CEO Jane Sun.
"We have achieved a healthy
revenue growth rate and improved operating profit margin quarter-over-quarter
thanks to the scalability of our business model. Looking ahead, we are on the
right track to accomplish our long-term goals. Our persistence in ‘customer-centricity,’
deep involvement in industry value chain and solid execution in the
international business will create enormous growth potentials in the years to
The company says a 9% increase
in its sales and marketing expenses in the second quarter compared to the same
period a year early, to $331 million, was due to an increase in sales and
marketing personnel-related expenses. And as a percentage of net revenue, non-GAAP
sales and marketing expenses in the second quarter were down to 29%, from 30%
of net revenue in the same period of 2017 and from 31% in the first quarter of
Looking ahead, the company
predicts net revenue growth to continue at a year-on-year rate of between 13
"Our team continues to drive results by putting the
customer first in every aspect of our business," says Ctrip executive chairman
"We will continue to make investments in improving
customer satisfaction, as we believe this strategy will create more customer
lifetime value over the long-term. In addition to pursuing the vast
addressable market of potential new users, we will remain focused on better
serving our large existing base of loyal customers. We will be relentless in
extending our leadership in the travel industry, in China and the world."
Part of the strategy to reach new users is to leverage the 7,000 offline stores the company has under franchise agreements in 200 cities.
A further priority moving forward is to drive in-destination experiences and the company recently put in place a “Global things to do” platform with 100,000 experiences in 1,500 destinations.
During the earnings call the company says more than 40% of today’s traffic “converts to in-destination demands during peak times.” It added that in-destination travel has grown more than 50% year-over-year in the second quarter.
Ctrip, Booking Holdings, MakeMyTrip and others speak at The Phocuswright Conference 2018
for details, tickets
and the program for this year's event in Los Angeles, November 13-15.