Alibaba’s OTA Alitrip is making a foray into the US to develop closer relations with the US travel trade. It has picked Los Angeles as the location for its first overseas promotional event for investment, during which Alitrip will sign partnership agreements with a number of US tourism conglomerates and launch the US National Pavilion on its platform to mark the China-US Tourism Year. Alitrip will also invest for equities in US travel trade companies this year to form deeper partnerships.
The US is the second stop of Alitrip’s overseas venture within two weeks of entering the new year. Last week, Alibaba formed a partnership in Singapore to create a comprehensive tourism destination with its Hotel of the Future and Attraction of the Future models.
Alitrip’s vice president Zheng Zhou said the travel platform’s turnover had grown over 100% in 2014 and even more in 2015.
Unlike its competitors, Alitrip’s goal is to link up a series of basic infrastructure in the online tourism industry instead of doing direct management and direct procurement. “We think that high-quality DIY travel is a new frontier. Right now it’s very easy for Chinese travelers to visit Thailand and Japan on a tour, but bigger destinations like America are a lot more difficult for them to navigate. So in the future we will invest in partnerships with local ground operators in this segment” Mr. Zhou said.
“We will focus our investments on two directions – to gain traffic and improve our service quality. Up until now Alibaba has gained an excellent source of traffic and in the future we will search for ways to leverage this to boost Alitrip’s operations, as well as our positioning in the travel plus area,” he said.
Facing the fact that rival Ctrip is the indisputable leader of China’s online travel industry, Alitrip aims for a breakthrough by specializing in a single market. In the past various reasons the US was difficult for Chinese visitors to access, yet it is sought after for Chinese travelers.
The number of Chinese visitors applying for a US visa has gone up by 52.6% within a year, to 2.5 million, since the US extended its visa validity, according to a report of the Tourism Research Center at the Chinese Academy of Social Sciences.
Meanwhile, China’s OTAs have gone through a tumultuous year in 2015 having seen a number of realignments and mergers that led to full-scale subsidy wars. Alitrip’s president Xiaohua Li said that Alitrip would not be drawn into the quagmire of fierce competition and price wars. Instead it hopes to leverage its Alibaba family members and partners such as Ant Financial, Aliyun and big data as the basis of decision-making for destination service and break away from the old model of operations. On this basis, Alitrip will secure the US tourism market and set up a series of local service stations down the road.(Translation by David)
