Ctrip surges in Q3 with US$400m profit

Ctrip experienced a sharp upturn in profits in the third quarter of the year, as its sales soared.

The Chinese online travel giant generated a net profit of CNY2.5 billion (approx. US$401 million) in the three months to 30 September 2015, up more than 600% year-on-year.

This was driven by a 49% jump in revenues, to CNY3.2bn, with turnover from the accommodation reservations increasing 45%, transport ticketing revenues up 150%, and package tour turnover rising 66%. The company also saw double-digit (+19%) growth in its corporate travel revenues.

Ctrip has experienced strong sales growth for some time now, but this has often been offset by the soaring costs. In Q3 2015 Ctrip’s expenses continued to rise (including a 50% rise in sales and marketing expenses and a 36% increase in product development costs), but were outpaced by the company’s rising revenue.

James Liang, Ctrip’s chairman & CEO, said this was the result of efforts being made by the company to improve its operational efficiency.

“Ctrip maintained strong momentum and delivered great results in the third quarter of 2015,” said Liang. “Both hotel and air ticketing businesses reached 50% year-over-year growth in volume. Outbound travel continued to grow at triple-digit in the core business segments due to the booming demand this quarter. Meanwhile, the Ctrip team has demonstrated its strong execution through significant improvement in operational efficiency.”

The third quarter is shaping up to represent a very significant period in the company’s history. As well as the sharp upturn in profits, Ctrip recently entered into an agreement with Baidu to acquire a stake in its major rival, Qunar.

Ctrip’s fortunes are in sharp contrast to another of its big rivals, eLong, which posted a net loss of CNY156m for the third quarter, 168% worse than the same period last year, with revenues rising just 2%.