Priceline to invest $500 million in Ctrip

Priceline Group is to bolster its Asia-Pacific presence by ploughing $500 million into China’s largest online travel agency, Ctrip.

The Group will acquire up to 10% of Ctrip shares in the open market over the next twelve months.

Following the purchase, Priceline will also gain a position on Ctrip’s board of directors.

Both the parties had established a commercial agreement in 2012, now the agreement is further expanded to significantly cross-promote products and services between the pair, and also to access each others inventory.

Following the agreement, Ctrip will have access to Priceline’s 500,000+ accommodation options (excluding China), and inventory from Priceline’s Rentalcars and restaurant reservation service OpenTable (acquired by Priceline for $2.6 billion).

Priceline will be able to tap up Ctrip’s 100,000+ accommodations in the Greater China region, and the company will promote Ctrip’s air ticketing and attraction ticketing services.

President & CEO of Priceline Group, Darren Huston, says:

“We are pleased with the growth in Ctrip bookings through and Agoda over the last two years.  We are eager to build upon what has already become a great partnership, and thrilled to be able to offer our customers even more hotel options in China.

“Travel to and from China is growing rapidly, and through this partnership, we have an opportunity to further help the world experience China, and China experience the world.”

Priceline already operates the Agoda hotel booking service in Asia-Pacific.

Co-founder and CEO of Ctrip, James Liang, says:

“The Priceline Group is a key strategic partner for us as we look to expand our global footprint. Both of our companies operate on the same philosophy to deliver exceptional products and seamless online booking experiences for our customers, and we are eager to jointly invest in improving the experience for travelers worldwide.”

What else is happening in China OTA market?

These strategic movements signal the attractive growth opportunity in Chinese online travel industry.

Recently, Ctrip invested over $200 million in its competitor Following this investment, Ctrip became the second largest stakeholder in LY.

In April this year, Expedia-backed OTA, eLong and entered into a partnership that enabled eLong to become the exclusive supplier of agency hotel and group-buying hotel inventory for LY in mainland China, and LY to be the exclusive supplier of scenic attraction ticket inventory for eLong.

However, this partnership ended in just 40 days with LY paying a penalty of $4.5 million to eLong for terminating the agreement.

In March 2014, Chinese outbound travel service ByeCity raised $20 million from investors including Alibaba.

Earlier this year, LY received $82.5 million fund from investors including the country’s one of the biggest internet business, Tencent.

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Karthick Prabu

About the Writer :: Karthick Prabu

Karthick was general manager for Tnooz in Asia until September 2014.



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