China travel firm Ctrip to buy Skyscanner for $2.5b

Tourists at Beijing Capital International Airport. Ctrip's move to acquire British travel search site Skyscanner could help broaden its footprint abroad while enabling it to offer Chinese users a wider array of options.
Tourists at Beijing Capital International Airport. Ctrip's move to acquire British travel search site Skyscanner could help broaden its footprint abroad while enabling it to offer Chinese users a wider array of options.PHOTO: AGENCE FRANCE-PRESSE

BEIJING • Ctrip.com International will buy British flight price-checking site Skyscanner for about £1.4 billion (S$2.5 billion), as China's largest online travel firm explores ways to expand beyond a home market it already dominates.

The deal will allow Ctrip, whose growth has been tied to the sharp rise of Chinese tourism, to gain a strong foothold in Europe. Skyscanner, one of the region's larger flight-ticketing services, has more than 60 million monthly active users. Ctrip said it would be able to offer a more complete array of options combining air, rail and road travel.

It announced the deal on Wednesday, alongside better-than-expected quarterly revenue and earnings. Its shares climbed almost 7 per cent in New York in after-hours trade.

Ctrip remains largely unknown outside the China travel market. It merged with rival Qunar Cayman Islands in a deal that made search engine giant Baidu one of its main shareholders. Bloomberg Intelligence estimated in September that Ctrip handled 70 per cent of China's online travel transactions.

Chinese consumers have traditionally used low-cost tour groups for foreign trips, but rising affluence and Internet use have popularised the sort of independent travel that Ctrip facilitates. About 10 per cent of Chinese travel sales last year were booked online, said Bloomberg Intelligence analyst Michelle Ma.

It is unclear if Ctrip's latest buy is targeted at new foreign customers or designed to help Chinese tourists travelling abroad, said Gartner research director Sandy Shen.

"There are a lot of Chinese firms moving overseas by building their own offices or via acquisition," she said. "But it's not that easy to just buy a company and use it as a channel to sell your own services."

She said the move could also be designed to help Chinese consumers by making it easier to search for international flights.

The Skyscanner site searches through travel options and gives price comparisons. Bloomberg reported last month that the Edinburgh-based firm was looking to sell itself or go public. It was valued at over £1 billion by investors after a financing round in January, according to a British securities filing. Backers include Sequoia Capital and Scottish Equity Partners.

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A version of this article appeared in the print edition of The Straits Times on November 25, 2016, with the headline 'China travel firm Ctrip to buy Skyscanner for $2.5b'. Print Edition | Subscribe