Edited from the third in-depth study of outbound Travel Industry-- "Multi-strong OTA and differentiated Travel agencies"
Editor's note: OTA (online travel agency) refers to "travel consumers book tourism products or services from travel service providers through the Internet, and pay online or offline, that is, all tourism subjects can carry out product marketing or product sales through the Internet."
Preliminary determination of domestic OTA pattern and competition pattern
Acquiring Qunar and holding eLong, Trip.com 's leading position is prominent.
Each platform competes for the share of market segment
According to the funnel principle, the purchase frequency of air tickets hotel is relatively high, which forms a larger monthly active user base, and the flow permeates layer by layer, and continues to meet the long tail needs of some consumers through tourism products, so as to fully realize the realization of traffic.
According to Trip.com 's 2018 semi-annual report, it accounted for about 15 per cent of income from group tours and business travel products in the first half of 2018, while Tuniu Corp accounted for 83.5 per cent of income from group tours. With the improvement of industry concentration and individual travel penetration, OTA will be differentiated, leading Trip.com will continue to focus on standard output such as machine wine, while Tuniu Corp and Tongcheng Yilong will gradually focus on the excavation of market segments.
What is the OTA agent mode
OTA business model is mainly divided into Agency (agent) and Merchant (wholesale), overseas is mostly agent and wholesale mode parallel, domestic OTA is basically agent-based.
The essential difference between wholesale and agency mode lies in the different ways of getting income from suppliers: in agency mode, OTA takes a certain percentage of commission from the sales prices of hotels and air tickets to earn income; in wholesale mode, OTA buys tourism products from suppliers and sells them at their own prices to earn the difference. The price of tourism products under the agency mode is directly priced by the suppliers, the commission rate is relatively fixed, and the proportion of commission income to the transaction volume is also relatively fixed; the price of tourism products under the wholesale mode can be determined by OTA, and the sales price fluctuates with the off-peak season.
In recent years, with the increase of domestic OTA market share, the percentage of hotel commission has increased. At present, Trip.com implements a dynamic commission system, the percentage is between 12% and 20%. Merchants enjoy the floor price, and the selling price is determined by Trip.com. Overall, at present, the percentage of domestic OTA hotels is slightly higher than the foreign average.
In terms of air ticket commission, domestic air ticket agents have entered the "zero commission" era. In 2015, SASAC asked domestic airlines to "promote and downgrade" (the proportion of direct sales of the three major aviation enterprises should be increased to 50% in the next three years, while agency fees should be reduced by 50% from 2014). In 2016, the Civil Aviation Administration issued a notice that the handling fee for air ticket agents was adjusted from a proportion of sales to a fee per piece, further reducing the profit space of the domestic OTA air ticket agency business.
With the end of the game among domestic airlines, ticket agents and passengers, domestic OTA is expected to cover ticket agency costs by charging additional service fees like foreign OTA.
Meituan's "the rise of backwardness"
Meituan developed low-star hotels in low-line cities through "high-frequency band and low-frequency", and gradually expanded the results. Based on the frequently used arrival and takeout business, we continue to incorporate relatively low-frequency consumption such as movies, beauty salons, education, and housekeeping into Meituan's platform, and constantly cultivate consumer stickiness, so in the process of capturing the "long tail demand", Meituan's extra cost is much lower, and many hotel accommodation needs in the same city and province are very fragmented and arbitrary, which is in line with this consumption scenario. In fact, this is essentially similar to the thinking of American Express, so that users can use their own services more frequently, while it is not easy for other competitors to imitate.
Summary and comments:Under the current pattern, Trip.com is still in the lead and occupies an advantage in business travel business; Flying Pig relies on the introduction of "Ali" traffic, focusing on providing a Taobao-like shopping platform in terms of leisure vacation; while Cheng Yilong and Tuniu Corp gradually fade out of the standard competition, intensive cultivation market segmentation, OTA gradually divided into a "multi-strong tripartite" pattern.
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