China Tourist

Planning their trip

TripAdvisor gets big China ally for sales push

James Liang-w

Well travelled: James Liang

In Chinese folklore, owls aren’t the most auspicious of birds in part because their hoot is said to sound like the word for digging a grave. That hasn’t stopped TripAdvisor from embracing its owl logo in China. Back in 2015, it even changed its local name from DaoDao (meaning ‘to arrive’) to Maotuying (phonetic wordplay on ‘an owl taking a journey’).

Whether or not the owl brand was inauspicious, TripAdvisor has found life tough in the China market. Its revenues there are so minor that they don’t even merit a separate line item in its accounts.

As a result, few were surprised when it announced that it was ceding majority ownership of its Chinese unit this month as part of a new 40-60 joint venture with (still known in China as Ctrip, its original name).

Under the terms of the deal, there are also content licencing agreements between the two companies where brands, including Ctrip,, Qunar and Skyscanner, will distribute TripAdvisor content. will get the right to nominate one person to the TripAdvisor board, and buy shares currently valued at $318 million within a year of getting regulatory approvals.

The tie-up combines’s strong domestic base (300 million members in China) and TripAdvisor’s global one (390 million monthly unique users).

Globally, TripAdvisor has been under pressure from Google, which has been ramping up its suite of services offering flight and hotel bookings, and travel reviews. Year-to-date, TripAdvisor’s share price is down about 40%. shares have done better, being up about 16%. However, the online travel group has underperformed many of its tech peers. Some of that is because of the impact of Hong Kong’s political situation on travel bookings (Hong Kong and Taiwan made up a third of’s non-mainland China revenues during the first half of the year).

The company celebrated its 20th anniversary last month by changing its group name (and that used on its Nasdaq listing) from Ctrip to It still operates Ctrip as its main Chinese-language platform, but it uses to sell services to non-Chinese travellers in more than 20 other markets. The move underlines how its future will be about meeting international demand, not just growing its domestic business.

Growth at industry level in China looks solid. Last week Luo Shugang, Minister of Culture and Tourism, reported a combined 291 million inbound and outbound tourist trips during 2018, up 7.8% year-on-year.

But James Liang, one of’s founders, has noted that inbound tourism accounts for just 0.3% of China’s GDP, compared to 1% to 3% in competing markets. He also highlighted obstacles to larger inflows, ranging from difficulties getting visas and a shortage of foreign language skills to more intangible concerns from potential visitors about pollution.

Liang says that inbound tourists could generate as much as $200 billion in new revenues for the industry. But he also acknowledged some of the challenges Chinese tourism brands face in expanding overseas: in fact, earlier this year he said that he hadn’t seen any successful cases of service-oriented firms from China setting up in overseas markets. wants to be the exception and it has already made a number of international acquisitions, including its £1.4 billion ($1.8 billion) purchase of the UK’s Skyscanner in 2016.

The following year it acquired the US brand for an undisclosed amount and it is making staggered equity purchases for a 49% stake in India’s MakeMyTrip.

Income from outbound Chinese tourists, as well as sales to overseas-based customers using the and Skyscanner sites, now makes up more than a third of’s total revenues, Caixin says. However, the company’s international arm is still lossmaking. The hope is that TripAdvisor’s richer content will help to change that and says it wants to be the undisputed number one in travel bookings by 2030, ahead of foreign rivals Expedia Group and Booking Holdings.

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