Industry Update
Performance11 October 2017

OTAs dominate the Chinese travel market

Book direct looks to be on life support in the Chinese market as more than 70% of Chinese digital bookings are made through OTAs according to EyeforTravel’s new Chinese Travel Consumer Report 2017-2018

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Although the Chinese government has put pressure on China's big airlines to drive more direct bookings, pushing back against the tide will be a mammoth task as EyeforTravel's research finds that the sector has an Online Travel Agency (OTA) penetration of 77.5% for website bookings and 81.2% for bookings made through an app. In contrast, 17.6% of website users reported to EyeforTravel that they booked direct and a slightly lower 12.9% also went direct through an airline app.

This is a marked contrast between Chinese and Western markets, where airlines have been able to hold their market share or in some cases grow it and illustrates the unique dynamics of this market, where smartphones and apps play a much larger role in the travel booking process than in the West.

The report found a similar pattern for accommodation bookings, with seven out of 10 Chinese travel consumers booking through OTAs, compared to around one in 10 using a hotel's website or apps.

The struggle to take back market share will be made more complex by the concentration of the OTA market in China, with only a handful of players, and price sensitivity key for Chinese travellers says the report. Among China's OTAs, Ctrip, Qunar and Meituan-Dianping are the dominant forces, with the first two particularly strong in app usage, which will continue grow as China's younger travel consumers, who favour smartphone and app booking, become a larger segment of the market. With more than nine in ten Chinese consumers visiting price comparison sites during research, they have also been able to strengthen their market proposition by becoming integral players in metasearch, further entrenching their competitive advantage.

The report also notes that Tujia is primed for growth as the biggest player in the Chinese home rental market, with around 450,000 properties nationwide. It has been strengthened by its acquisition of the home sharing businesses of both Qunar and Ctrip and agreements with HomeAway and Japan's homeshare portal Rakuten Lifull Stay to offer more overseas listings.

Become a member of EyeforTravel On Demand now and access the full report, which includes:

  • A survey of more than 2,000 Chinese travel consumers.
  • Economic analysis and projections for the Chinese economy.
  • Summaries and outlooks for Chinese domestic and outbound travel.
  • Consumer booking, research, and trip spending behaviours.
  • Lead times for flight, accommodation and tours and activities.
  • Geographic and demographic breakdowns.
  • More than 50 figures, tables and charts profiling the Chinese travel consumer.

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