Ctrip’s Skyscanner purchase is paying off – and CEO says there’s more to come
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Ctrip’s Skyscanner purchase is paying off – and CEO says there’s more to come

Ctrip took a chance when it bought Scottish flight-search company Skyscanner in 2016. The Chinese travel giant is making a bold play for the international market, and CEO Jane Sun says that acquisitions will be a big part of that expansion. Her management and integration of Skyscanner is a great example of how that can be done well.

Ctrip’s share price has edged up by 4% over the past three months

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Source: Yahoo Finance

According to Ms. Sun, sales at Skyscanner have been rising by 30% a year since it was acquired for $1.4 billion. She also says that its growth potential is “tremendous” – particularly if Skyscanner is allowed to retain some independence: “If you want to invest in a company you must have seen something that’s very shiny in a management team — and that is something you will do everything to protect by keeping them as an independent operation.”

Part of that independence means letting customers trust that Skyscanner will not force them to use its parent company’s services above the competition. According to Ms. Sun, Skyscanner’s search engine does not – and will not – favour Ctrip above other options. However, she is confident that Ctrip can rise to the top naturally. Saying that around 3% - 4% of customers currently book via the Trip.com service through Skyscanner’s site, she adds: “there is no reason we cannot get 20% to 30% in the long run.”

Skyscanner is expanding beyond flights this year, having added train tickets to its platform. According to Ms. Sun, the company can continue to widen its offering – particularly since Ctrip offers so many different services in the travel space: “Skyscanner just needs to cherry-pick the ones that are suitable for their customers . . . that’s why I feel this is a one-plus-one equals 10 type of synergy.”

Disclosure
Dominion holds Ctrip in its Global Trends Luxury Fund.


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