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Pre-sales, Coupons, Cooperation with Domestic Destinations - The "Trilogy" of China OTAs Recovery

April 27, 2020Article by: Travel Link Daily
As the epidemic has gradually alleviated in China, local OTAs have now passed the "epidemic fastigium" and the recovery momentum is relatively strong. While looking at the international market, the situation of OTAs at other markets seems to be more crucial at the moment. Cutting expenses, seeking government assistance and financing opportunities, the global giant OTAs strive to get through the cold winter

As of early April, Booking.com, the world’s largest OTA, has seen reservations decline 85% compared to last year. According to the news that Skift cited the Dutch NRC website, the company may face a large number of layoffs. On April 16, Booking.com announced that it has applied for government assistance in the UK and the Netherlands.

Expedia Group, which has gone through a round of layoffs, now is considering to cut off the advertising cost – which is always an important part for their operation cost.

Airbnb, the leader in the homestay industry, has recently reacted frequently to try to save itself. According to a report from The Information, Airbnb announced in a recent investor conference that the revenue in 2020 would be 54% lower than the expectation made in the beginning of the yar. What’s more, the extension of the Tokyo Olympics has cast yet another a shadow over the IPO that Airbnb originally planned to conduct this year. In the past week, Airbnb was lucky enough to obtain a "timely blood transfusion." On the 14th, Airbnb claimed that a few days after completing a $ 1 billion debt financing transaction and the company received a new $ 1 billion loan. Even though various kinds of marketing activities were suspended, Airbnb did not stop the pace of leading users from experiencing "virtual travel." Recently, Airbnb launched a pilot online experience project. In the coming months, it is expected that thousands of online campaigns will be launched, and the booking function for users in mainland China will be gradually opened.

(Online experience project by Airbnb. Source: Airbnb)

While looking back to China, the OTAs suffered a massive loss during the epidemic have finally tasted a little bit of sweetness.

China OTAs are now taking the lead in the recovery of the travel market by selling products that are reserved in advance. When the domestic travel is gradually unblocked in early March, Ctrip (as name “Trip.com” at overseas), Meituan, Fliggy and other OTAs have launched a batch of reservations for popular scenic spot tickets and hotel room vouchers. The validity period basically extends to the middle or even the end of the year. The pre-sale model is getting popular, and a large number of consumers favor of this.

However, there are still some drawbacks in the pre-sale model at this stage. After the travel within province was lifted, the overzealous travel enthusiasm caused traffic congestion. The Ministry of Culture and Tourism now requires scenic spots to establish a complete booking system and strictly limit the number of tourists who collect and purchase tickets on the spot as to keep a social distance. In terms of hotel reservations, Meituan and Ctrip recently introduced relevant regulations for hotel pre-sales. In the "Online Accommodation Booking Platform - Hotel Pre-sale Service Specification" jointly released by Ctrip and Beijing Union University, the regulation has put forward the concept of "expired pre-sale products" and "operators should reserve inventory for pre-sale products", for the first time in the field of hotel pre-sales, which timely solve some frequent consumer questions such as "difficult to refund" and "lack of credibility for pre-sale merchants" in the field of hotel pre-sales.

Livestream broadcast is also rapidly gaining popularity at this stage. There is no doubt that livestream broadcast has become a trend in the travel industry. Bosses from local giant OTAs hosted the live shows has become the selling points. For example, Ctrip’s CEO James Liang sold products national-wide with cosplay costumes on during the livestream broadcast, and Tuniu’s CEO sold products on Tiktok Livestream on their Member’s Day.

(CEO of Ctrip, James Liang at Livestream broadcasting. Source: Ctrip)

(CEO of Tuniu, Mr Yu Dunde at livestream broadcast via Tik Tok platform; Source: Tuniu)

Another trend is the increasingly intimate cooperation between domestic destinations and OTAs. "Ctrip Tourism Renaissance V Plan", "Tongcheng Yilong Departure Plan", "Tuniu Oasis Plan", "Mafengwo Summer Actions" ... Behind the battles against the epidemic, it is the signing of cooperation projects between the tourism board of provinces within China and OTAs. In the short term, domestic travel will become the focus of travel agents. Not just OTAs, but also large travel groups and local leading travel agencies are strong players in this competition.

The OTAs under the epidemic suffered heavy losses, among which the situation of overseas listing companies is even worse. But when we look at the life-saving actions of the major OTAs, it is not difficult to notice that their "online" attribute has become their best play. Whether or not the OTAs could seizing the opportunity and current advantages to maintain the "optimum" in the post-epidemic era, we’re looking forward to it.

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