Accelerate penetration sinking market ctrip and OYO hotel to reach cooperation
Update time:2019-05-28         Source:Electricity network operators

May 28, ctrip recently reached a strategic cooperation agreement with OYO hotel. In the future, users can search OYO hotel via ctrip platform.According to the agreement, the two sides will cooperate on traffic exchange, scene exchange, data operation, brand promotion and other aspects. OYO hotel will also explore cooperation with ctrip to help hotel owners in terms of brand, talent, technology, traffic and operation.OYO hotel, founded in 2013, is the largest hotel chain in India. In recent years, the group has gradually expanded from India to the United Kingdom, Malaysia, Nepal and other countries and regions by renovating and renovating the unified brand and service of single hotels with low average price, small volume and low quality. In 2017, the group moved into shenzhen and began to penetrate third - and fourth-tier cities. According to data, OYO had entered 300 cities nationwide by April 2019, operated more than 8,000 hotels and had 400,000 rooms online.It is worth mentioning that OYO was once blocked by OTA platforms such as ctrip and Meituan in the process of entering the Chinese market. According to published reports, in November last year, online travel platforms such as ctrip and Meituan 'froze' OYO, and couldn't find OYO hotels in either App.OYO seems to have paid a high price for the cooperation. According to global travel news, OYO will probably pay ctrip 200 million yuan a year in fees, plus an additional commission. But in the eyes of some in the industry, the amount of traffic ctrip can generate is likely to be more important than those fees. OYO entered into cooperation with OYO, which is beneficial to its layout in the Chinese market in the long run.From the perspective of ctrip, the cooperation with OYO hotel will also be conducive to its further expansion of the hotel territory, accelerate the penetration of the sinking market. In recent years, the company in low-line cities and low-star hotel market is also a constant move. Ctrip is gaining market share in lower-tier cities, according to the official financial results for the first quarter of 2019. In the first quarter of 2019, ctrip's low-star hotel nights saw a year-on-year growth rate of about 60%, while offline stores also saw a triple-digit year-on-year growth in the first quarter.In addition, during a recent earnings call, company co-founder liang jianzhang said ctrip still has great potential to further expand its user base in China. 'Overall tourism demand is still very strong, especially in lower-tier cities. So far, we have only covered about 25 to 30 percent of the first-tier urban population, and much less than 10 percent of the lower-tier urban population.' Obviously, OYO's hotel resources in lower-tier cities can complement ctrip's layout in lower-tier cities.However, ctrip's OYO deal is not without its pitfalls. It is understood that the company's travel yue group also launched the main light chain hotel brand 'simply'. At the annual event of 'acceleration' 2019 held at the beginning of this year, the group also announced that it will continue to expand its business in the New Year to ensure that its three major brands, including 'simply', achieve the goal of 'a total of 2,605 stores across four continents'. In the view of some industry insiders. After ctrip access to OYO, it will inevitably import traffic to it, but this may have a certain impact on its own brands.In addition to joining forces with ctrip, OYO is also set to cooperate with Meituan, according to media reports. So it remains to be seen whether ctrip can rely on this cooperation to occupy more market advantages.

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