Ctrip starts harvesting Skyscanner synergies

Ctrip is running an instant booking trial with Skyscanner, the metasearch site it bought recently, revealed its CEO Jane Jie Sun, in a live Q&A at ITB China Conference on Wednesday.

Interviewed on stage by Phocuswright founder Philip Wolf, Sun said: “We are doing a trial run with Skyscanner…originally, we planned to have the first transaction of direct booking by the end of the year but it has moved faster than expected.

“The reason we can do the test run is because we have invested in Skyscanner; we feel the two companies are one entity. The engineers day in and day out are talking to each other.”

Sun said metasearch sites have an advantage in that they can scale quickly, however the absence of a direct booking facility for customers means users need to jump to another site to finish the transaction.

When approached by TTG Asia for more details on the trial, Sun said: “It’s just a test run, so far it’s been positive.”


Sun: trial moving faster than expected

Google is also dabbling in instant bookings where, in the footsteps of TripAdvisor, users can complete a hotel room booking without ever leaving the search giant’s desktop interface. Skyscanner in March joined forces with Finnair and Amadeus to enable travellers to book Finnair directly with the airline without leaving Skyscanner.

One analyst report said though Ctrip offers metasearch options in China, Skyscanner being a global leader in metasearch will significantly increase Ctrip’s international reach. If Skyscanner’s capability is provided with Ctrip’s booking functionality, the synergy can increase bookings for Ctrip significantly.

But the jury is still out if instant booking on metasearch engines will work, with Wolf pointing out that TripAdvisor’s pivot to this is “by all indications a disaster”.

He said: “Ctrip manages its own successful future with an uncanny ability to make the right bold moves at the right time. They don’t follow anyone else’s footsteps. That’s the true sign of leadership. And I would keep watching out for pioneering breakthroughs on mobile apps for search/shop/buy/memorialise in travel.”

Ctrip’s unaudited financial results for the first quarter ending March shows a 46 per cent year-on-year net revenues increase to RMB6.1 billion (US$883 million). In a statement, executive chairman James Liang said: “This is the first quarter we consolidated Skyscanner results. By leveraging Skyscanner and other strategic overseas investments, we expect to further strengthen our international product offerings and improve user experiences for both Chinese and international travellers.”

Sun also gave insights into Ctrip’s culture during the Q&A. “We want the company to have the spirit of innovation and the innocence of a small company, but the discipline and focus of a big company,” she said, admitting this is a challenge as Ctrip grows bigger, with 33,000 employees. She said most of them are 25 to 26 years old. “Sometimes I feel we’re in a high school,” she said.

One way she keeps the innovation spirit up is through a “baby tiger” programme, where all young employees are able to pitch business plans to executive members. To-date, there are more than 30 baby tigers, which run as separate businesses.

On how Ctrip decides what to acquire, Sun said: “We’re very disciplined about our investments. First, it must be closely related to our core business, i.e. travel. A lot of people want us to buy a piece of land, for example, we’re not interested, even though it may be a good investment. Secondly, the target must be number one or two in its vertical. Thirdly, it must not only be the leader, the valuation must be reasonable.”

On what advice she has for females leaders, Sun said: “We women have lots of advantages.We are team players, for one, and we always try and strike win-win (results) in any negotiation. If we focus on our strengths, we will go a long way.”

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