China's Ctrip seeks foreign partners
Reuters
* Looking for foreign partners for inbound travel service
* Expects rosy growth for corporate travel services
* Revamping English-language site as foreign travellers boom (Adds details)
By Sophie Taylor
SHANGHAI, March 19 (Reuters) - China's top online travel agent, Ctrip.com International Ltd, is looking for overseas partners as it develops services for travellers to China, its chief financial officer said on Wednesday.
Ctrip is updating the English-language version of its Web site (www.ctrip.com) to attract expatriates living in China as well as inbound international travellers, and expects tourism to the country to swell with the Beijing Olympics this summer and the World Expo in Shanghai in 2010.
"We are starting to look for good partners overseas," Jane Sun said in an interview, adding that any partnership would likely start off as a non-equity deal.
"Trying to establish a brand in a foreign country where Ctrip does not have a stronghold is probably not a wise thing to do. However, we can form certain strategic partnerships in foreign countries where they have a strong presence," she added.
Ctrip's corporate travel service, which caters to clients including Sony Corp and Ping An Insurance (Group) Co of China, is expected to comprise up to 15 percent of total revenue in five to 10 years' time, compared with less than 5 percent now, Sun added.
China's business travel market is worth about $10 billion, the world's fourth biggest, according to American Express.
Shanghai-based Ctrip -- which allows customers to reserve hotels, domestic air tickets, private tours and chauffeur services -- employs more than 7,000 people across China and is now targeting the country's second-tier cities to drive growth, Sun said. China's travel services market is highly fragmented.
Ctrip's main domestic rival is eLong Inc, which is majority-owned by U.S. online travel firm Expedia Inc.
"Ctrip has been gaining market share from small mom-and-pop travels agents, but its overall share remains small at 5 to 6 percent," CLSA analyst Elinor Leung wrote in a recent report.
Air ticket reservation services are expected to make up about a third of Ctrip's total revenues in the next five to ten years, from around 40 percent now, Sun added, as other business segments including corporate travel and package tours grow rapidly.
In 2006, 1.4 billion domestic trips by Chinese tourists generated $85 billion, up 17 percent from 2005, according to official data. Growth last year continued at a similar pace.
Though around 90 percent of Ctrip's customers travel within China, the number of travellers going overseas is likely to double every year as more foreign countries relax visa rules, Sun added.
Sun reaffirmed a previously announced forecast for year-on-year net revenue growth of 35 percent for full-year 2008. Ctrip posted a 58 percent rise in net revenue to $49 million for the fourth quarter of last year. (Additional reporting by Helen Bing; editing by Keith Weir)
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