Ctrip is at the top of its game. What is its future direction as a Chinese brand, and as an international brand? What work still needs to be done?
Ctrip is dedicated to serving Chinese outbound travellers and still has a long way to go. We are very lucky to be in this huge market and we are only touching the tip of the travel opportunity.
Through online and offline stores, our brand strategy in China covers all customer bases and types, especially mid- to high-end customers. We have invested in Skyscanner, a leading flight meta-search company with approximately 65 million monthly active users and over 200 million global searches every month. Our omni-channel strategy enables us to understand and serve Chinese travellers through our comprehensive product offerings and 24/7-customer service, which is at the core of our DNA.
Following our customers’ global footprint, Ctrip aims to bring prosperity to the destinations with the Chinese traveller’s strong spending power. From Ctrip’s report and data of 2017 National Holiday destination distribution, 46 per cent of the six million Chinese travellers went to South-east Asia, making this region a favourite destination. Ctrip contributed over four million hotel roomnights to the region in 2016 and this number is expected grow to 6.5 million last year. Travellers from first-tier cities such as Shanghai and Beijing spent an average of well over US$1,400 per head.
As our Chinese customers travel internationally, Ctrip will remain by their side and ensure that our service capabilities can cater to their needs and bring ease and efficiency to their travel experience, and at the same time promote cultural exchange and contribute to the world.
Tell us about the additional Priceline Group investment and the Skyscanner acquisition. Where have these recent developments taken Ctrip so far?
Priceline and Skyscanner are Ctrip’s important business partners. We work closely together to increase product offerings and improve efficiency and service quality. Our partnership with Priceline and Skyscanner enables Ctrip to better serve the ever-growing Chinese outbound tourists and their needs.
With Priceline Group’s international travel resources, Skyscanner’s technology and quality service in air ticket search and Ctrip’s own understanding of Chinese customers, we are confident of creating enjoyable experiences for all of our users.
Where are the growth opportunities?
The online penetration rate of the Chinese travel market is only about 15 per cent. While customers from first-tier cities are familiar with online travel booking, those in lower-tier cities are not. We see the need to educate and provide a personalised service to this new customer base.
Also when you compare China’s 10 per cent passport-holder rate to that of the US at roughly 40 per cent, and the population size of China, it is very clear there is still a very large untapped opportunity for outbound business.
Travellers from secondary cities are spending as much, if not more than their first-tier counterparts. During last year’s Labour Day Holiday, eight of the top 10 cities with the highest per capita travel spending were Dalian, Shenyang, Hangzhou, Nanjing, Jinan, Fuzhou, Xiamen and Changchun. The other two were Shanghai and Beijing.
Ctrip turns 20 in 2019. What other strategic moves are needed to take the company to the next level and what is the next level?
Apart from ongoing technical innovations, Ctrip is expanding into lower-tier cities in China (with the opening of 5,500 physical stores) and increasing our ability to serve Chinese outbound customers. In full support of China’s Belt and Road Initiative, Ctrip has also set out to allow travel to connect and bridge the East with the West. With more integrated products and services, we can better serve the 120 million-plus Chinese outbound customers who wish to seek services that are holistic and efficient.
Lower-tier cities will be the key driver of the growth of China’s travel industry for the coming decade. Ctrip is well positioned to benefit from both increasing online penetration as well as consumption of growth trends in lower-tier cities. We have created omni-channels through our network of about 6,000 travel agencies across China. We have expanded our product offerings in these markets and have streamlined user experience by allowing multi-product reservation and order changing services.
Diversity, efficiency and a more global and innovative approach will take us to the next level.
What is Ctrip’s biggest challenge and who is its biggest competitor?
We have been dedicated to drive travel innovation since 1999 (when Ctrip was founded). It will not be easy to replicate the experience and talent that we have accumulated through the years. The only way for us to deliver sustained value to our users and partners is by focusing on our core competencies.
We have established a well-grounded travel ecosystem through investments and partnerships. This helps Ctrip to offer efficient and long-lasting win-win relationships with all partners on our supply chain. In order to deliver the most excellent travel experience for our customers, we will need to pay close attention to develop the required expertise. From global SOS systems to 24/7 call centres, we need to maintain and ensure that high-quality customer service is always our top priority. These solid foundations have allowed Ctrip to overcome challenges and to remain a travel friend to our Chinese customers.
Share some examples of Ctrip’s’ innovations.
As a 24/7, one-stop-shop, customer-centric travel platform, Ctrip continues to invest more than 15 per cent of revenue to invest in the ABC of technology – AI, big data and cloud computing.
Customers who book any travel product with Ctrip are invited to join our free Virtual Tour Manager (VTM) service on the Ctrip app as well as the WeChat platform. Customers can join the group chat to exchange information with other Ctrip customers in the same destination and directly contact our tour managers and local tour guides for help. VTM has been serving millions of travellers per year. Ctrip’s global SOS service is also provided on the basis of VTM. Whenever and wherever anyone is in an emergency situation, Ctrip customers can call for help through VTM.
During the Las Vegas shooting incident in early-October, Ctrip knew within two minutes where its customers were, identified those in the city in 20 minutes, located them in an hour and offered those who wanted to go home, to fly out the next day.
Crip’s QR code ticket purchase app has resulted in a 20 per cent increase in admission ticket sales for Zhangjiajie National Forest Park, where the prototype for various elements in the movie Avatar were taken. Overseas, the app helped the Sydney Aquarium, Sydney Tower, Sydney Wild Park and Madame Tussauds increase sales by a whopping 460 per cent.
Leveraging on AI technology, our new online chatbot has been helping customers solve their problems, serving 70 per cent of Ctrip’s total hotel-related customer services and 40 per cent of flight ticket-related customer services.
How has Ctrip changed since you joined the company and what is your mission as CEO?
I have grown alongside the company as I made the transition from CFO to COO and now to CEO. Ctrip is currently operating in an ever-growing market with evolving travel trends and customer needs to fulfil. Apart from ensuring top customer service and experiences, we are also looking into providing wider high-quality travel products and services. This cannot be achieved without investments in R&D and our ability to innovate to ensure that AI and big data can better serve our customers and partners.
We are also fostering a culture of innovation through hosting special (start-up) programmes, most notably the Baby Tiger Programme, which drives and transforms new business ideas into innovative products that serve our customers and partners.
My mission is to ensure that Ctrip creates more enjoyable travel experiences for our customers and that we grow with all of our stakeholders. With the right resources, flexibility and innovative culture within our reach, we will continue to be that one-stop platform where all questions are answered, where needs are fulfilled and where everyone mutually benefits from being in this ecosystem.
