China-based OTA Trip.com Group (formerly Ctrip) has entered into a strategic partnership with TripAdvisor to expand its global footprint, including a joint venture, global content agreements and a governance agreement.
Ctrip Investment Holding, a subsidiary of Trip.com Group, has entered into a joint venture with TripAdvisor’s subsidiary, TripAdvisor Singapore. Trip.com Group will be the majority shareholder of the new joint venture entity and will contribute cash and market expertise. TripAdvisor will own 40 per cent of the joint venture and will contribute a long-term exclusive brand and content license and other assets of its China business.
The joint venture, which will operate globally as TripAdvisor China, will see both companies sharing inventories in travel categories at the joint venture level.
As well, Trip.com Group and TripAdvisor have entered into global content agreements providing for distribution of select TripAdvisor content on major Trip.com Group brands, including Trip.com, Ctrip, Skyscanner and Qunar.
Furthermore, both parties have entered into a governance agreement which will give Trip.com Group a nomination right for one TripAdvisor board seat after approval from relevant regulatory authorities. To maintain the board seat, Trip.com Group shall acquire up to US$7 million TripAdvisor shares or TripAdvisor shares valued at US$317.6 million through open market transactions within one year following regulatory approvals.
TripAdvisor and its controlling shareholder Liberty TripAdvisor Holdings (LTRP) have separately agreed to provide Trip.com Group with certain information rights with respect to potential transactions for the sale of TripAdvisor Class B shares or LTRP Series B shares, respectively.
The broad strategic partnership pairs Trip.com Group’s market leadership in travel booking capabilities and China travel market expertise with TripAdvisor’s unique brand strength, rich global user-generated content, and points-of-interest database, as well as best-in-class in-destination supply. The strategic partnership marks an important step for Trip.com Group to realise its globalisation vision with greater quality services, and for TripAdvisor to further strengthen its position as a global travel leader.
“China is one of the largest and fastest growing travel markets in the world. Trip.com Group, with its established brands and travel market leadership, is the perfect partner to help us achieve our long-term goals in the region,” said Stephen Kaufer, president and CEO, TripAdvisor.
Jane Sun, CEO of Trip.com Group, said: “As we expand our footprint overseas, it is important that we offer not only seamless access to global travel inventory, but also quality reviews, opinions and pictures generated by other fellow travellers. We are very excited about this strategic partnership, which will undoubtedly further enhance the travel experience for our customers worldwide.”
