CTrip, China’s largest travel agency, rebranded as Trip last year so the simpler name would resonate with the international markets it wants to grow in. It is looking for more acquisitions, especially companies that will introduce new ways of thinking and boost management capability.
Outside China, Google is the single company associated with potentially forcing a structural change on online travel agencies (OTAs) and the wider distribution environment, according to Xing Xiong, executive vice-president of Trip.com Group, which acquired Skyscanner in 2016.
“Google is a big threat…Look at what is happening in North America,” Xing said at IATA’s Airline Industry Retailing Symposium in Bangkok last year. “When we meet with the Skyscanner team, they are under the same threat. Google is not as dominant in Europe yet, so they’re in a little better positioning.” Xing, who is also CEO of Trip’s flight ticket division, singled out Google’s one-stop-shop capability – including travel booking, calendar and apps – as what consumers want.
Trip is still interested in acquisitions, not simply for market share but also know-how. “We are not global enough. We know that. Our management do not have the capacity to really go beyond at the speed we want, so careful and diligent acquisition is part of our strategy,” Xing said.
Xing is well aware of the aviation industry’s view that online travel agencies are dispensable. “We continuously question ourselves, why do we even need to exist?” he asked. Airlines in Trip’s home market of China have made gains in direct distribution, which Xing estimates is now at 30-40%. Yet many consumers want what Xing said is Trip’s reason to exist: “providing the highest quality service at the cost which competitors cannot match. We know that’s the way to succeed.”
Trip aims to show passengers the lowest price, so it pulls inventory from multiple GDSs. For airlines, Xing said Trip is open to merchandising through various channels and not just IATA’s New Distribution Capability, which forces the industry to think in terms of one pathway rather than other ways to introduce flexibility, according to Xing.
In the Chinese market, some ask if the disruptive technology provider will be the mega app WeChat using its platform to sell tickets. Xing is not concerned, believing Trip’s cost-effective customer service is a critical factor “WeChat is far away from matching.” WeChat’s payment function and Alibaba’s Alipay account for over 60% of transactions on Trip.