Why Ctrip bought Skyscanner
by Welcome Chinese
China Market China News
china Chinese Ctrip market Skyscanner tourism travel Welcome Chinese
In November, the travel industry was shook by the news of the swift sale of Skyscanner – the UK-based travel price checking website – to Ctrip, the biggest travel company in China. The price paid was €1.6 billion. But what have the analysts said about a move that, regarding a travel company that is not directly involved in the hospitality business, is among the most significant in China?
TECHNOLOGY ON SALE - As Skift and Jing Daily travel magazines pointed out, Ctrip was in need of a well-known meta-search engine, just as Expedia has Trivago and Priceline runs Kayak. After the merger with Qunar back in 2015, Ctrip reached a dominant position in China to project its commercial ambitions beyond the national borders. According to Bloomberg, Skyscanner’s profits hit €20.6 million during 2015, up 3% year-on-year. Ctrip's growth has been the consequence of years of phenomenal growth in Chinese tourism. By the way, Priceline is also an influential shareholder in Ctrip.
GOING GLOBAL - What remains unclear is whether Ctrip’s acquisition was targeted at new foreign customers, or instead designed to help Chinese tourists traveling abroad - only time will tell. Thanks to the deal, it appears natural that Skyscanner will soon be able to reinforce its competitiveness in hotels business, until today not as popular as flights. With its strong base in the UK, Skyscanner is second only to Qunar in meta-search traffic in Asia. There are reasons to expect the British company to become the "wooden horse" of Ctrip by entering the European market on the shoulders of a brand that is locally very well known. Are new acquisitions ahead?