It’s been exactly one year since Ctrip purchased Trip.com - a strategic move by the Chinese online travel powerhouse to bring its services into local Asia Pacific markets.
And the past 365 days have so far paid off, according to Victor Tseng, Ctrip vice president of corporate affairs, who says the Silicon Valley-based travel brand has been able to leverage Ctrip’s scale and access to products in niche categories and price ranges.
Trip.com, as a brand, has a fairly unusual history. It was founded in Silicon Valley in 2010 by Travis Katz as a travel social network under the name Gogobot - it rebranded to Trip.com in late-2016 and, for a number of reasons, then caught the attention of Ctrip.
The acquisition in November 2017 led to a two-fold strategy: Ctrip got the brand name Trip.com, and Skyscanner got the trip planning services behind the scenes. Katz joined Ctrip-owned Skyscanner as its vice president of product.
Ctrip's version of Trip.com is a very different proposition to the site that hit the scenes and raised $39 million in funding.
“I think for such a young product, Trip.com has been growing quite well,” Tseng tells PhocusWire in an interview at WIT Singapore 2018. “In the markets Trip.com is in with a lot of consumers - like Korea or Singapore - a lot of the travel spend is outbound, and that plays to its strengths as well. … Anywhere around the world there’s flights, there’s hotels, there’s cars, there’s in-destination [activities] for consumers.”
One-stop-shop capability we’ve done tremendously well through Ctrip, and there is a recipe and formula that Trip.com can adopt.
Victor Tseng - Ctrip
Currently, Trip.com has services available in 13 languages; it has more than 1.2 million hotels in 200 countries and regions and more than two million flight routes connecting 5,000 cities.The deal to buy Trip.com
Tseng says flights are anchoring Trip.com’s growth, particularly in markets such as Korea, where market share has been growing “quite fast,” as well as Hong Kong, where market share is over 10%.
Flights are more scalable than other products, he continues, because Ctrip has been investing in flight technology and how to link up with global distribution systems and low-cost carriers, thus creating a “vast, comprehensive flight inventory and fresh data.”
Ctrip has also been investing in localization efforts in Trip.com markets, Tseng says, because each region needs to present unique value propositions to its local user base.
In Singapore, for example, where a lot of travel is outbound, Trip.com has been promoting “staycations” to residents to help local hotel chains grow bookings.
In Japan, meanwhile, Trip.com launched a co-branded credit card with the bank Sumitomo that allows users to log loyalty points with purchases.
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There has also been a concerted effort to assist local users in making payments and contacting customer service. “Ctrip has been in the travel business for almost 20 years, and part of our DNA is service capability,” Tseng says. “We’re really investing in the human touch with call centers.”
He estimates there are as many as 14,000 call center people who pick up the phone within 20 seconds available 24/7, and a call center recently opened in Korea in response to the volume of calls coming from the area.
“I think there’s a lot of value in having a human-touch service that can really differentiate the experience, but it’s not to say we’re not automating,” Tseng says. “We’ve invested massively on artificial intelligence, massively on data; they need to go hand in hand.”
Building a "super app"
Tseng believes Ctrip has succeeded at becoming a one-stop shop, or “super app,” for consumers looking to book or manage multiple parts of a trip, and it’s a blueprint Trip.com can follow - with some local tweaks.
For example, for Chinese Ctrip users, there’s a 20 to 30% natural attachment rate of booking other travel products in the same itinerary, which he says presents a lot of opportunity for Trip.com to leverage.
“It’s a win-win: A more seamless user experience and better conversions for suppliers, as well.”
Travel, Tseng says, is “already time-consuming and pressure-packed,” and Trip.com’s ability to function as a one-stop shop helps differentiate it from the OTA competition.
To that end, Trip.com added Ctrip’s car rental service in March and its tours and activities inventory in August, giving travelers more booking options beyond flights and hotels.
“One-stop-shop capability is something we’ve done tremendously well through Ctrip, and there is a recipe and formula in some ways that Trip.com can adopt,” he says.
“But not absolutely; they need to also balance with the local element.”
REGISTER NOW! Ctrip, Expedia Group, Booking Holdings, MakeMyTrip and others speak at The Phocuswright Conference 2018