Taiwan Today

Online travel service operators in Taiwan and China have begun eyeing cross-strait merger opportunities, with Shanghai’s Ctrip purchasing a majority stake in Taipei-based Eztravel. Ctrip, which holds 60 percent of China’s online travel service market, became Eztravel’s largest shareholder during the second quarter, lifting its stake from 20 percent to over 50 percent. The purchase, described by Ctrip chief financial officer Jane Sun as a “strategic move,” demonstrates the company’s resolve to tap into the Taiwan travel market. In March of this year, Ctrip announced the expanded partnership with Eztravel, becoming the first major China-based online operator to promote “Taiwan travel” services. According to Ctrip’s financial statements, the company’s operating revenue for the second quarter of this year was 476 million yuan (US$69.7 million), up 27 percent from the same period a year earlier. During this period, Ctrip reported a net profit after tax of 159 million yuan, marking an increase of 33 percent year-on-year. Eztravel’s contribution to Ctrip’s earnings for the period amounted to 23 million yuan, or 6 percent. Sun said that following Taiwan’s further opening to Chinese tourists last year, the island has become an attractive travel destination for mainland visitors. The Ctrip-Eztravel alliance will allow the Chinese company to offer a wider range of direct services for mainlanders traveling to Taiwan, Sun said. Eztravel will also be able to use Ctrip as a platform to book accommodation for Taiwanese tourists visiting China. You Chin-chang, general manager of Eztravel, said that Chinese tourist numbers to Taiwan are on the rise. In the first half of this year, Eztravel’s revenues and profits hit record highs, he noted, adding that the travel agency is not limited to Taiwan with its plans to go public. Separately, Ctrip announced the purchase of 7.51 million shares of Chinese hotel chain Home Inns at a price of US$50 million May 7. The buy increased Ctrip’s stake from 9.5 percent to 18 percent, making it the largest shareholder in the company. (SB-JSM)