Priceline Group Announces Additional US$250M Investment in Ctrip
The overseas online travel service company Priceline Group Inc. today announced that it will invest an additional US$250 million in Ctrip.com International, Ltd. , China’s leading online travel company.
This investment follows a commercial relationship established between the two companies in 2012, which was expanded in August 2014 along with the US$500 million investment by The Priceline Group. Immediately following issuance of the new US$250 million bond and assuming conversion of the two bonds, The Priceline Group will own securities representing approximately 10.5% of Ctrip’s outstanding shares.
The two companies will continue their existing commercial partnership, whereby accommodations inventory is cross-promoted between the brands.
The online travel service platform market in China has been dominated by local companies like Qunar, eLong and Ctrip.
The world’s leading online travel company Expedia, pulled out of the Chinese market this week after operating localized websites for over a decade through a controlling investment in eLong.com. The company divested its 62.4% share in eLong, which was majority bought by Ctrip, who now owns over 37% of the smaller travel company. In 2011, Expedia bought Renren’s stake in eLong in an effort to further its expansion in China market, but the Chinese company has been performing poorly since.
TripAdvisor who entered China in 2009, launched a media site under the Daodao brand and acquired Kuxun.com. They recently launched a new brand ‘Mao Tu Ying (a word play for ‘owl’ and ‘journey’)’ for China. The company now offers an app with WeChat integration and travel guides in Chinese.
While Qunar has been growing its open platform project over a large user base, Ctrip has planned large investments in different online travel services services 2013. At the tome, they led investment in Chinese car rental service eHi and Yongche, followed by a US$100 million investment in overseas travel platform ToursForFun. Last year, Ctrip invested US$200 million to its competitor LY.com (previously 17u.cn) and is now their second largest shareholder.
Image Credit: Ctrip