Ctrip suffers loss despite surging sales
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Ctrip.com International, the Chinese travel giant, suffered a net loss CNY521 million (US$78m) in the second quarter, despite seeing a sharp rise in sales.
The result did mark an improvement from the CNY1.6 billion net loss it suffered in the first quarter of 2016, but means that for the six months between January and June 2016 Ctrip lost more than CNY2bn.
Business was brisk in the second quarter, with Ctrip’s revenues jumping 75% to CNY4.4bn, reflecting the continued strength of the Chinese travel sector. Accommodation revenues jumped 61% year-on-year, while transportation ticketing revenues surged 90%, and package tour turnover increased 44%.
Ctrip’s costs however, continued to spiral. Product development expenses for Q2 2016 jumped 116%, while sales and marketing costs almost doubled. Much of this growth – both in terms of revenues and expenses – can be attributed to the recent acquisition of Qunar, but the results follow a longer-term pattern of strong sales and rising costs, as Ctrip rapidly ramps up the scale of its operations.
“Ctrip continued to execute strongly in the second quarter of 2016, delivering solid top line growth and healthy margin expansion,” said James Liang, the company’s chairman & CEO. “We will continue to strengthen our industry leadership by focusing on our one-stop online travel platform, expanding international travel inventory coverage, and improving operating efficiency.”
In late 2014, Ctrip revealed plans to spend almost US$500m on a new state-of-the-art office complex in Shanghai.
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