Ctrip's second quarter earnings release talks about a 50% improvement in mobile conversion rates from the early iterations of Skyscanner's direct booking business.
Executive chairman James Liang summarised the rationale for its introduction of direct bookings to Skyscanner, which Ctrip acquired for $1.75 billion last November. He said:
"It is a more effective way to convert Skyscanner user traffic while helping its partners to retain the customer relationship and the ability to upsell ancillaries."
Ctrip itself was one of the early partners selling via the direct booking option. Conversion rates on mobile, he said, were 50% higher for partners using the platform.
This validates previous comments around the importance of keeping mobile users in particular within the mobile-optimised Skyscanner platform, rather than run the risk of losing the customer when they click off to a less-well optimised partner site.
Liang explained that international growth - of which Skyscanner is a key component - was one of its two investment priorities in the near-term. But Ctrip continues to grow its own presence outside China. It has increased its hotel inventory in Asia during the quarter and is ramping up its supply of "local inventory in popular international destinations".
And the Ctrip.com International web site is "only" available in 12 languages, Liang said, adding that this represented "the early stage" of its plans.
Ctrip's other focus is on growing in so-called second-tier cities in China. With an eye on the long term, Liang said that "second tier cities will drive the growth in Chinese travel for the next decade".
Agents of change
Offline travel agents are a vital part of Ctrip's growth plans beyond the major cities. As part of its takeover of Qunar, Ctrip got its hands on Bestone's 5,500 offline agents. These businesses are now branded as Qunar or Ctrip and operate under a franchise model. During the three months to June it opened 400 new stores and hopes to have an estate of 6,500 by the end of the year. CEO Jane Sun told analysts on the call that its offline stores would "break even" by the end of the year.
The financials talk in terms of growing revenues while improving operational efficiency to "generate long-term value for shareholders in the years to come." Sun said that its artificial intelligence-assisted chat bot is now handling 40% of queries, "improving our efficiency while enhancing customer satisfaction".
The double digit year on year revenue growth across all its business units in the quarter comes a little surprise. Overall, its net revenue of $946 million is a 45% increase from the same period in 2016.
By unit, accommodation revenue of $341 million is a 30% increase on the same quarter last time; transportation is up 49% at US$441 million; packaged-tour revenues of US$90 million is a 29% hike while corporate travel's US$29 million is a 36% improvement.
Also of little surprise is a comparable increase in sales and marketing expenses. Ctrip spent $295 million on this in the quarter, a 49% lift.
Click here to read the earnings release.