Ctrip to benefit from Qunar US stock offering

Mainland travel agency expected to get business boost from bigger search platform post-listingCtrip.self storagecom International, the mainland's largest online travel agency, may be an unintended beneficiary of the proposed US$125 million initial public offering by Qunar.com, the leading Chinese travel search engine controlled by Baidu.That outlook stems from the alliance forged in August between former rivals Ctrip and Qunar, which agreed to co-operate on providing packaged tour offerings online.A bigger Qunar platform after the stock listing is likely to drive even more business to Shanghai-based Ctrip, which is already the second-largest provider of packaged tours to Qunar's website.A Barclays report said Ctrip might "contribute close to 15 to 20 per cent of total package tour products for Qunar"."Based on our expectation that Ctrip's packaged tour business will benefit from the partnership with Qunar, we raise our package tour estimates for 2014 and 2015, with year-on-year growth of 35 per cent and 33 per cent respectively, from 29 per cent and 27 per cent previously," Barclays said."We would not be surprised if Ctrip were to explore opportunities to provide its hotel and air ticketing inventories on Qunar's platform in the future."Founded in Beijing in 2005, Qunar offers consumers real-time searches for air and rail tickets, hotels and tour packages.Qunar on Monday filed for its long-anticipated initial public offering with the Securities and Exchange Commission in the United States as Qunar Cayman Islands.The company will list its American depmini storagesitary shares in the New York Stock Exchange.No pricing terms were disclosed. Underwriters of the share sale include Goldman Sachs (Asia), Deutsche Bank Securities, Stifel, Pacific Crest Securities and China Renaissance Securities (Hong Kong).Qunar, which booked revenue of 501.7 million yuan (HK$635 million) last year, said in its filing that the proceeds from the share offering would be used to invest in technology, infrastructure and product development efforts; expand sales and marketing; and for general corporate purposes.Its platform currently has more than 131,000 tour packages covering 1,268 travel agencies. Offerings from Ctrip and rival online packaged tour providers Tuniu.com and 17u.com are featured most frequently.In a report published on Monday, Alicia Yap, Barclays' head of China internet research, said many offline travel agencies had seen significant year-on-year declines in demand for the national golden week holiday, which started yesterday, as a result of higher packaged tour prices.Ctrip, however, "has seen a meaningful pickup in demand over the past few weeks", Yap said."We believe a reacceleration of top-line growth for Ctrip is likely over the next 12 to 24 months, boosted by faster market share gain."Unlike offline travel agents, Nasdaq-listed Ctrip has larger scale, more do-it-yourself travel products, lower pricing and a popular mobile travel application for smartphone users.The mainland's online travel market is forecast to grow to 408 billion yuan by 2016 from 170.9 billion yuan last year, according to iResearch.迷你倉