The relationship between partners Booking Holdings (formerly Priceline Group) and Ctrip has been strange, to say the least. The two travel booking giants are partners in the Chinese market. However, that hasn’t stopped the two companies from pursuing avenues of competition against each other, both in the international and Chinese travel markets. Nonetheless, the two companies appear to be committed to their strategic partnership, at least according to a new press release from Ctrip.
Ctrip and Booking Holdings are ostensibly deepening their ties, but it isn’t clear what the move actually changes about the still ongoing partnership
In the press release, Ctrip announces that its partnership with Booking Holdings is being deepened. Gillian Tans, CEO of Booking.com, has been named as the observer for Booking Holding to the Ctrip board of directors. Booking.com is the largest part of the Booking Holdings travel empire, and the observer position was previously held by the Director for the Asia Pacific at Booking.com.
This move does reflect, at least to an extent, that Booking Holdings is attempting to express the value it places on its relationship with Ctrip by sending a higher-level executive to observe the Ctrip board. To what extent this move deepens cooperation between the two companies isn’t entirely clear, however. The press release also points out that Ctrip also entered into a partnership with Booking Holdings’ OpenTable to expand offerings of restaurant reservations via Ctrip.
The two companies already have a relatively deep relationship, primarily through the sharing of their hotel inventories. This gives Ctrip’s users access to one of the largest international hotel portfolios in the world and gives Booking Holdings access to the Chinese market. Booking Holdings has also been a major investor in Ctrip for some time.
The announcement seems less about a deepening partnership, and more about reassuring investors that the partnership will continue
The primary purpose of the announcement of the “deepening partnership” seems to be to reassure industry watchers and investors that this key pillar of the relationship, critical for Ctrip in catering to Chinese outbound tourists, will remain strong.
Regardless, it’s hard to ignore the cracks in the partnership. Booking Holdings’ CEO Glenn Fogel has made it clear that the company is committed to the China market. But that same level of commitment does not seem to extend to Ctrip. Last year, Booking Holdings participated in a round of investment into Ctrip competitor Meituan-Dianping, along with Tencent.
Of course, the same can be said of Ctrip. The Chinese company has had a growing interest in harnessing non-Chinese travel as a revenue source. Most notable among these moves have been the acquisition of Skyscanner in 2016, a Scottish OTA, and the launch of Trip.com in 2017.