After Conquering China, Ctrip Expands Internationally with Skyscanner Acquisition

    With its acquisition of Skyscanner, Ctrip strengthens its lead in Asia and goes head-to-head with Expedia and Priceline in other key travel markets.
    Ctrip has acquired Skyscanner for £1.4 billion (US$1.74 billion) in a mainly cash transaction. (Syafiq Adnan /
    Daniel MeesakAuthor
      Published   in Technology

    After a long and hard-fought price war between China’s online travel marketplaces, Ctrip came out as the winner when it merged with Qunar in 2015. However, just as things had quieted down in China, Ctrip announced its acquisition of Edinburgh-based Skyscanner, the main competitor to Priceline Group’s With investments in overseas tourism infrastructure and close cooperation with airlines across the world already in full swing, Ctrip’s recent acquisition marks the first big Chinese investment in the Western travel technology sector.

    Skyscanner is one of Europe’s few “unicorns” (privately held startups with a valuation of US$1 billion and above), operating a global travel metasearch engine that covers more than 30 languages and serves 60 million active users across the world. Its strongest market remains the United Kingdom, but it has successfully grown its user base across Europe and Asia—where Skyscanner is only second to Qunar in metasearch traffic. Partnerships with local players in the Asian markets, such as Yahoo! Japan and Baidu in China, have fueled its growth in the continent. In Europe and the Americas, however, Skyscanner has been competing head-to-head with industry leaders Expedia and Priceline, which have both acquired multiple local competitors in an increasingly consolidated market. To make matters more complicated, Priceline is a major Ctrip stakeholder, having steadily increased its stake in the company in recent years, and will now benefit from the future success of its competitor.

    For travel metasearch in Asia, this means that Ctrip essentially owns the two leading actors in the market—Qunar through its 2015 merger, and Skyscanner through its acquisition this week. Asia’s number three player is Japan-only, followed by Germany’s Trivago, in which Expedia holds 63.5 percent of the shares. This leaves Ctrip in an excellent position to consolidate its dominance across Asia, where the two main global players are still lagging behind in their expansion efforts.

    Ctrip’s international expansion also underlines the Chinese tourism industry rapid development in the span of just a few years. Ctrip, long an unknown player outside China, successfully conquered its domestic market at the expense of overseas-based competitors, and is now looking to disrupt markets beyond China. This puts it in the same league as the likes of HNA Group and Jin Jiang International—both Chinese travel conglomerates that are looking beyond China for future growth—and adds online travel to the list of sectors in tourism and hospitality where Chinese companies are beginning to exert their influence overseas.

    While Skyscanner is less of a threat to Expedia and Priceline in the United States, Ctrip backing could make it a force to be reckoned with in Europe—both in terms of marketing dollars and as a competing suitor for remaining independent players across the continent. Ctrip successfully asserted its dominance in the Chinese market with a series of mergers and acquisitions, and could use Skyscanner to do the same in Europe, where the market remains less consolidated than in the Americas. Even though Ctrip makes it clear that it will allow Skyscanner operational independence, Ctrip’s weak brand recognition outside of China makes Skyscanner an attractive vehicle to use for its international expansion.

    For consumers, Ctrip’s acquisition of Skyscanner is a double-edged sword—it makes Ctrip an even more dominant player in Asia, where consumers were already worried that the Ctrip-Qunar merger would increase prices—but it could also help curb Expedia and Priceline’s dominance in Western markets. While metasearch only brings Ctrip into competition with the main players in some areas, it could open the floodgates for further Chinese expansion within the global online travel market. Ctrip has also made it clear that it will actively strengthen Skyscanner with its experience, technology, and booking capabilities. Ctrip, itself much more than a travel metasearch engine, could certainly use its expertise in these areas to develop Skyscanner into something beyond metasearch as well.

    Ctrip’s acquisition of Skyscanner puts it in more direct competition with overseas giants than ever before. Whether Ctrip’s domestic competitors are too busy trying to disrupt the Chinese market leader at home or will follow Ctrip’s lead in overseas expansion remains to be seen. Until then, Expedia and Priceline only have Ctrip to worry about.

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