Ctrip gains in all divisions, Skyscanner revenue surges
China’s biggest online travel agent, Ctrip, posted incredible results this week that demonstrated progress in all areas of its business, and a particularly impressive jump in revenue at Edinburgh-based Skyscanner, which the group acquired in late 2016. Ctrip’s share price jumped on the back of the news, but soon reversed its gains – so powerful is the narrative about the on-going trade dispute that even stellar performance can’t alter a company’s trajectory. Despite this, investors should take heart in the fact that Ctrip’s underlying business is clearly not just healthy, but booming.
Even as Ctrip sees major success, the trade war weighs on its share price over the week
SOURCE: Yahoo Finance
Ctrip said it had total revenues of $1.1 billion for the second quarter of 2018. That’s a 13% increase, year on year, and a 9% jump from the first quarter. Breaking that down, the biggest winner was Ctrip’s packaged tour category, which saw revenues rise by a massive 31% from the second quarter of 2017 to $127 million.
Corporate travel did almost as well, logging a 28% jump in revenue, while accommodation revenue increase by 21%, both reported against the same period a year earlier. The one part of the business that saw less than impressive results was transportation revenue, which increased by 1% year on year.
Ctrip also pointed out that it was making “great strides” internationally – excluding Skyscanner, Ctrip said that the volume of its international hotel and air business rose by 40% thanks to “the robust growth of our outbound travel business and the popularity of Trip.com.”
However, it was Skyscanner that logged the most impressive results of the quarter. Ctrip reported that the Edinburgh-based platform saw a revenue rise of around 600%, year on year, in its direct booking program!
Ctrip’s CEO, Jane Sun, made the following comment: "Ctrip delivered solid results in the second quarter of 2018. We have achieved a healthy revenue growth rate and improved operating profit margin quarter-over-quarter thanks to the scalability of our business model. Looking ahead, we are on the right track to accomplish our long-term goals. Our persistence in ‘customer-centricity,’ deep involvement in industry value chain and solid execution in the international business will create enormous growth potentials in the years to come."
James Liang, the company’s executive chairman, added: "Our team continues to drive results by putting the customer first in every aspect of our business. We will continue to make investments in improving customer satisfaction, as we believe this strategy will create more customer lifetime value over the long-term. In addition to pursuing the vast addressable market of potential new users, we will remain focused on better serving our large existing base of loyal customers. We will be relentless in extending our leadership in the travel industry, in China and the world."
Dominion holds Ctrip in its Global Trends Ecommerce Fund.
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