The Priceline Group is planning to invest US$500 million in China’s Ctrip International, as part of an expanded commercial partnership.
The US-based online travel company, which operates brands including Booking.com, Agoda and Kayak, confirmed that it has enhanced its existing commercial agreement with Ctrip, which started in 2012. As part of the new agreement, Priceline has agreed to invest half a billion dollars in Ctrip through a convertible bond, while Ctrip has granted Priceline permission to acquire its shares in the open market over the next 12 months.
As a result, the Priceline Group could hold up to 10% of Ctrip’s outstanding shares and will have the right to appoint an “observer” to the Ctrip board of directors.
“Ctrip is the clear leader in online travel in China and we are pleased with the growth in Ctrip bookings through Booking.com and Agoda over the last two years,” said Darren Huston, president & CEO of Priceline. “We are eager to build upon what has already become a great partnership, and thrilled to be able to offer our customers even more hotel options in China.
“Travel to and from China is growing rapidly, and through this partnership, we have an opportunity to further help the world experience China, and China experience the world,” he added.
The two companies initially joined forces in 2012, with the partnership allowing Ctrip’s customers to access the Priceline Group’s global portfolio of more than 500,000 hotels and resorts outside China. In return, Priceline was offered access to Ctrip’s Chinese inventory 100,000 accommodation options.
According to the companies, the expanded partnership will see Priceline and Ctrip provide each other with hotel inventory “on an enlarged scale with more favourable partnership terms”.
Ctrip will also now be able to offer more of Priceline’s brands to its customers, including inventory from rentalcars.com and OpenTable, while Priceline will have access to Ctrip’s air and attraction ticketing services.
“The Priceline Group is the global leader in online accommodations, and as such, a key strategic partner for us as we look to expand our global footprint,” said James Liang, co-founder, chairman & CEO of Ctrip. “Both of our companies operate on the same philosophy to deliver exceptional products and seamless online booking experiences for our customers, and we are eager to jointly invest in improving the experience for travellers worldwide.”