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Ctrip's net profit seen to decline due to subsidies
By Ding Yining |
September 12, 2012, Wednesday
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Print Edition
Print Edition
NET profit at Ctrip is expected to decline in the next few quarters as China's leading online travel service provider will continue to subsidize consumers in a bid to capture a bigger market share, a senior executive said yesterday.
"The price war is not likely to cease before the end of this year," Tang Lan, senior vice president of Ctrip, said in an interview yesterday.
Ctrip's profit fell 55 percent in the second quarter annually to 120 million yuan (US$19 million), while sales rose 17 percent to 974 million yuan. The company is eyes income from selling air tickets, hotels and other tailor-made domestic travel packages to boost sales. Tang said Shanghai-based Ctrip will be profitable in the third quarter this year.
In June the firm started a US$500 million sales promotion by offering coupons and discounts, and the money will be used within one or two years, depending on market conditions, Tang said.
Smaller rivals such as NASDAQ-listed eLong Inc and online booking site 17u.com have also said they will cut prices to woo consumers.
"The price war is not likely to cease before the end of this year," Tang Lan, senior vice president of Ctrip, said in an interview yesterday.
Ctrip's profit fell 55 percent in the second quarter annually to 120 million yuan (US$19 million), while sales rose 17 percent to 974 million yuan. The company is eyes income from selling air tickets, hotels and other tailor-made domestic travel packages to boost sales. Tang said Shanghai-based Ctrip will be profitable in the third quarter this year.
In June the firm started a US$500 million sales promotion by offering coupons and discounts, and the money will be used within one or two years, depending on market conditions, Tang said.
Smaller rivals such as NASDAQ-listed eLong Inc and online booking site 17u.com have also said they will cut prices to woo consumers.
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