Over the past five years, eLong has been actively working towards its goal of becoming the number one player in China's hotel booking market.
In the company's Q2 earnings call yesterday (Thurs 14), CEO Guangfu Cui announced the company is shifting its focus from being-online to being-mobile when it comes to selling its hotel products.
The announcement comes after the company says it noticed a 5% incremental jump (quarter over quarter) in hotel bookings made from devices.
In Q4, 2012 Expedia-owned eLong's 10% of total hotel bookings were from mobile. It has been increasing by 5% ever quarter, and the company now expects the share of hotel booking from mobile in Q3, 2013 to be 25%.
When Cui became the CEO of eLong in 2007, he started to increase his focus on hotel product, so the investments in flight was reduced, package and corporate travel products were eliminated.
As a result, in Q2 of 2013, eLong sold 5.8 million room nights, compared to less than 1 million in Q2 of 2008.
Cui highlighted that in Q2, 2013, eLong's budget segment hotel bookings were approximately equal to those of the largest OTA competitor in China, and its hotel group bookings were approximately three times those of the largest OTA competitor.
eLong has been increasing its investments in the mobile business for over two years, and there are now more than 25 million cumulative downloads of eLong Apps.
Cui says:
"We believe mobile-based booking will be bigger than PC based booking over time. We used to treat PC website booking and mobile booking as online booking, but we now want to distinguish mobile booking from PC based booking, and prioritize the mobile booking over PC based booking."
eLong's new mobile strategy includes,
- Aggressively promote downloads of eLong's mobile apps using all effective marketing vehicles
- Promote eLong's html5 enabled mobile websites
- Continue to expand the mobile product and technology teams
- Procure mobile-friendly hotel products such as last minute deals and heavily discounted group buy products
- Establish an innovation fund of $100 million to promote mobile travel products and service. This fund will be used for both internal innovation and external innovation. External investments will include angel investments of startup companies, venture investments in companies requiring second-round or later-stage financing, and M&A of target companies.
The focus of the company will continue to be the same - be number one for hotel bookings.
With so many last minute mobile hotel booking players emerging in Asia, the strategy undertaken by eLong isn't surprising.
Also, eLong's continued focus on hotel product reflects the same line of focus of India's MakeMyTrip where the company has put its spotlight in its hotel products. MakeMyTrip's revenue from hotels and packages business increased by 55.2% to $48.6 million in the quarter ended December 31, 2012.