Enter the dragon: China online travel soars, $75 billion market by 2017

China’s online travel industry is estimated to grow in double digits year-on-year with online travel revenue hitting about $75 billion by 2017.

iResearch, a China-based research company has released the growth projection for the the online travel market up to 2017.

China’s online travel brands have been constantly making the news recently with their funding, growth numbers, acquisitions and mobile strategy.

According to iResearch, China’s online travel gross merchandise value is estimated to reach $46 billion in 2014, $55 billion in 2015, $65 billion in 2016 and $75 billion in 2017.

PhoCusWright, meanwhile, estimates China’s online travel market at $30.3 billion by 2015, but this doesn’t include call-center bookings. PCW also estimates that 24% of China’s travel bookings will be transacted online by 2015.

iResearch attributes the growth in online travel to increasing volume of flights, hotels and packages, booked online.

It also predicts the buzzing online car rental and taxi-hailing services will become new growth engines for the online travel market.

china online travel market 2011-2017 iresearch - Tnooz

When it comes to revenue of online travel agents, it’s is estimated at $2.36 billion for 2014, $2.93 billion for 2015, $3.64 billion for 2016, and $4.54 billion for 2017.

The marginal growth in 2013 is attributed to the ongoing and extensive price war among OTAs, both on web and mobile channels.

The recent quarterly earnings from the country’s leading OTAs – Ctrip and eLong – report revenue growth while hinting at heavy investment in their mobile channels.

The research says this price war among OTAs will continue to remain in mobile channels. Grabbing mobile market share in travel bookings is seen as the new battleground for OTAs.

Read: eLong’s quarterly results – Q2, Q3, and Q4 2013. Ctrip’s quarterly results – Q2, Q3, and Q4 2013.

china online travel market 2011-2017 iresearch 2 - Tnooz

The list of Chinese OTAs by revenue puts Ctrip at the top position with a 49.7% market share, followed by eLong at 9.7% and 17u (raised $82.5 million in Series C) at 6.1%.

china online travel market 2011-2017 iresearch 3 - Tnooz

NB: China tourists image via Shutterstock.

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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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