According to iResearch, China Online Travel transaction hit 220.46 billion yuan (USD 33 billion), with a 29.0% YoY growth. The revenue of China OTA (Online Travel Agency) market reached 11.76 billion yuan (USD 1.9 billion), up 26.2% compared with last year.
The compound growth rate was estimated to 20.5%, with a market size of 465.01 billion yuan (USD 76.15 billion). iResearch regarded the increasing transaction of online air ticket, hotel booking and package holidays were main causes for the growth of online travel.
As online air ticket business tended to become mature and had a high penetration in air ticket booking market, it would keep a slow growth rate in the future. In contrast, hotel booking and package holiday were expected to usher in explosive growth, affected by the rapid rise of online leisure travel. Moreover, the market share of package holiday in total online travel market increased year by year. In addition, the rise of online short-term rental, car rental and taxi booking might become new growth points of online travel market.
It’s predicted that the revenue of OTA market would maintain a steady growth of over 20% from 2014 to 2017.
Influenced by the extensive price war in the industry, the growth rate of OTA market was lower than the whole online travel market in 2013. Since Q3 2013, OTA companies represented by Ctrip and eLong launched a price war on mobile client. They increased promotion effort by more cash rebate and frequent promotion activities to capture market share. The price war led to commissions of hotel booking and air ticket decline directly. It’s predicted by iResearch that the price war targeted mobile travel and other segments would last, but in the long run, the revenue of OTA market would keep a strong growth.
The Tourism Law created a big impact on traditional offline travel agencies since published in Oct 2013. Because of the price transparency and product diversity advantages of OTA, tourists tended to shift from offline to online. Now OTA companies began entering the online package holiday market based on their advantages.
In the mean time, the yearlong price war escalated rather than slowed down at the end of 2013, owing to Double 12, a new tourism festival created for promotion. In Dec 2013, Ctrip set up a new division to develop ticket service of scenic spots. The competition between Ctrip and other leading OTAs in ticket market would intensify in the coming year.
The trend of mobile internet had changed almost every internet service business; to be the top, you just need to seize the mobile market. It’s the consensus in the online travel industry. The mobile travel market and travel apps were favored by investors. Online travel distribution giants increased mobile business input, and performed well in mobile travel market. The status of mobile travel was upgrading and becoming the core channel of travel booking.