How OTAs Are Winning the Direct Booking Battle in China

EyeforTravel’s latest consumer research has some interesting findings, not least that travellers seem to prefer the online travel agent experience

This article originally appeared on EyeForTravel.

The findings of EyeforTravel’s latest Chinese Travel Consumer Report 2017-2018, which surveyed over 2,000 consumers, are bad news for the direct booking charge.

According to the report 77.5% of web bookings are made through an online travel agent website, rising to 81.2% for app bookings. Only 17.6% of travellers booked direct through a website, and 12.9% used the airline app. 

So, despite pressure from the Chinese government on airlines to drive more direct bookings, the majority of digital bookings in China are still made through OTAs!

Graph - Chinese Booking Channels

The dominance of OTAs in China is in marked contrast to Western markets where airlines have been able to hold their market share or in some cases grow it.  According to Alex Hadwick, EyeforTravel Head of Research, this outlines the unique dynamics at play in China, where smartphones and apps play a much larger role in the travel booking process.

The report found a similar pattern for accommodation bookings, with seven out of 10 Chinese travel consumers booking through OTAs versus around one in 10 using a hotel’s website or apps.

Going forward, there are two main challenges.

  1. OTA concentration: There are just a handful of OTAs in China, with Ctrip, Qunar and Meituan-Dianping being the main ones. Ctrip and Qunar are particularly popular with app users, a growing segment of the market.

  2. Price sensitivity: Price is a major issue for Chinese travellers with more than nine in 10 turning to price comparison sites during research.

Accommodation trends 

Meanwhile, on the accommodation front, the report notes that Tujia is primed for growth as the biggest player in the Chinese home rental market, with around 450,000 properties nationwide. It offers Airbnb type accommodation, but with services uniquely tailored to the needs of Asian tourists, which the company CEO has said are very different to those of Western tourists. In a widely quoted example, founder Melissa Yang has said that Chinese tourists wouldn’t want to have to take out the trash.

Towards the end of last year, Tuija strengthened its position by acquiring the home-sharing businesses of both Qunar and Ctrip. Earlier in the year, it had bought rival short-term rental platform Mayi and established a partnership with Ctrip as well as HomeAway. Further proving that the push is to dominate Asia-Pacific rather than just China, it has also signed agreements with Japan’s homeshare portal Rakuten Lifull Stay.

Want to read more? Sign up for EyeforTravel On Demand to access the full report, which includes:

  • A survey of more than 2,000 Chinese travel consumers.

  • Economic analysis and projections for the Chinese economy.

  • Summaries and outlooks for Chinese domestic and outbound travel.

  • Consumer booking, research, and trip spending behaviours.

  • Lead times for flight, accommodation and tours and activities.

  • Geographic and demographic breakdowns.

  • Over 50 figures, tables and charts profiling the Chinese travel consumer.