Ctrip Enjoys 60% Share in China's Travel Booking; Huatai Maintains "Buy"
Shares in Asia's largest travel booking company rose 15 cents Tuesday after China's holiday week showed strong growth in the tourists' consumption trend.
The stock of Ctrip.Com International Ltd. (Nasdaq: CTRP) closed up 15 cents per American depositary share today at $34.71 after the company, following a holiday week in China, showed that it had a market share of more than 60 percent of online travel in the country and was the biggest platform for outbound travelers.
According to an Oct. 7 report by China's Ministry of Culture and Tourism, 726 million tourists traveled throughout China during the seven-day October National Day Holiday, up 9 percent from a year ago. Revenue in the tourism industry rose correspondingly and reached $86.5 billion.
Further, tourists traveling domestically increasingly selected specialized accommodations and star-rated hotels. The number of outbound Chinese tourists has seen a steady increase in the past two years, reaching 71.3 million in the first six months of 2018, up 15 percent year-over-year. As reported by Ctrip, Asia's largest travel booking company, of all travelers, 83 percent were seeking products rated four stars and above during the period.
Analysts at Huatai Financial Holdings (Hong Kong) Ltd. said in a report on Monday that they expected Ctrip to benefit from the consumption upgrade and continue to grow its market share in China's travel industry.
"[Online travel agency] platforms with large user bases, deep-rooted travel resources and service know-how will see higher user retention rates in the long term," the stock brokerage wrote.
"We believe Ctrip, which serves as a one-stop OTA and provides premium customer services, will continue to benefit from the consumption upgrade trend and gain more tourism market share as more and more tourism demand is shifted online."
Huatai reiterated its "buy" rating of the company in its statement.