Mergers continue in China’s tourism industry as Ctrip and Qunar enter strategic partnership

China’s leading travel websites, Ctrip.com and Qunar announced on Monday that they will enter a strategic partnership, thus together forming China’s biggest online travel agent (OTA). In more technical terms, they will conduct a share swap that results in Ctrip owning a 45% stake in Qunar, and Qunar parent Baidu will own a 25% stake in Ctrip.

The partnership follows intense competition between Chinese internet companies that are fighting to gain market share in the fast-growing Chinese tourism market – where online tour bookings represent a majority of all bookings in tourism. Ctrip currently holds the largest market share, but Qunar has been growing the fastest this year.

In 2014, Chinese internet giant Alibaba also entered the Chinese tourism market with its Alitrip website, further increasing competition in the market – and many investors have reportedly been pressuring IT companies to merge and reduce their high costs of marketing that have resulted from the staggering competition in the online travel market.

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Source: Financial Times