Growth for China’s largest OTA Ctrip is facing a slowdown, seeing only 13% revenue growth in the three months to June 30, down from 45% last year. Net income was also slightly down.
The company’s reputation was damaged last year by bad press around abuse of some employees’ children at pre-school, and operating profit was hit by new government rules blocking the practice of automatically adding products such as trip insurance when buying flights or hotels.
The biggest challenge is competition, especially from restaurant review and delivery company Meituan that has expanded into travel sales. There is also the difficulty in encouraging Chinese consumers to book online, since 75% of hotel reservations are made offline.
However the company’s acquisition of Skyscanner is bringing results, including year-on-year growth of 30%, and Skyscanner’s instant bookings for Ctrip and sister brand Trip.com, introducing more Western travellers to the booking platform.