The potential for a slowdown in the outbound tourism market is forcing Ctrip.com International to shift strategic priorities, something that all major online travel agencies catering to the China market will have to consider.
Ctrip Chief Financial Officer Cindy Xiaofan Wang told The Wall Street Journal’s CFO Journal this week that the company has substantial cash that the company will use to offer discounts to customers and engage in targeted marketing efforts to help ride out the potential downturn from trade tensions and other economic conditions. “The market is cooling down a lot…. Naturally, a lot of loss-making players will exit the market,” Wang said. The company had $9.1 billion (RMB 63.3 billion) in liquidity as of September 30, 2018.
Ctrip is planning to dip into cash reserves to ride out a slowdown in the Chinese tourism market
For Ctrip, this means attempting to bundle more bookings at a discount to drive revenue and user numbers. The company is also targeting travelers in lower-tier cities, which is especially significant considering how much faster tourism growth is outside of China’s more developed metropolitan areas.
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