Ctrip $1,7bn Skyscanner acquisition: consolidation and new scenarios

On November 24th the Chinese colossus Ctrip officialised British metasearch Skyscanner‘s purchasing for about 1.74 billion US$ (about € 1,64 billion). Nowadays, Skyscanner serves about 60 million customers per month and is available in more than 30 languages. The acquisition is aimed at complementing Ctrip’s positioning at a global scale.

This acquisition fits in the actual scenario, where, as we reported previously, Chinese investors have shown to be deeply interested in the European Travel & Tourism environment, and a number of new deals, such as Marriot-Starwood or Lufthansa-Air China, are going to modify the industry environment.

Last month Amadeus released a report called “Online Travel 2020. Evolve, Expand or Expire” using a new methodology called “scenario planning”, in order to hypothesise what the future of online travel agents could be.

The report foresees 4 future scenarios. “Digital Tour Operators” scenario states that tour operators and OTAs might merge in order to create huge online agencies to provide personalised travel experiences. “Mobile Travel Retailers” scenario imagines mobile app-based travel agencies which will follow people during their travel. “Travel Marketplace” scenario supposes that the players of the Travel & Tourism industry could merge and build their own Travel Marketplace platform for OTAs, airlines, hotels, and other travel-related companies to sell their products and services. “Mega Online Travel Retailers” scenario is described by Amadeus as “the consolidation between OTA and metasearch business models, as well as the rise of online advertising” and the Skyscanner deal goes in this direction.

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Source: Amadeus, Online Travel 2020

Ctrip’s acquisition of Skyscanner follows the consolidation in the Indian OTA Makemytrip and of two US travel agencies, Ctour Holiday and L&L Travel. This is a clear signal of the overseas orientation of the Chinese players.

At Twissen we are recording that Europe is in the grip of acquisition mainly by China and Us players. Moreover, we observed that new forms of alliance are developing and there is room for more cooperation. Examples is the one between the Chinese OTA Alitrip, subsidiary of Alibaba, and VisitFinland to increase the Chinese tourist flow to Finland. Or between destinations: Greece and India’s region of Karnataka for mutual promotion and increasing air connections; Chinese province Sichuan and Germany developed mutual cooperation agreements to boost the exchange of tourists.