Chinese online travel company，Rising rapidly with the Internet trend。Ctrip was born in the late 1990s、Elong，Qunar, which was born in 2005, has been included in the territory of Baidu and Ctrip after years of fighting.；Tuniu, born in 2006, has become an important part of the puzzle of HNA’s tourism map；Lvmama, which was born in 2008, has gradually established itself in collaboration with Jingyu Group online and offline and relying on Jinjiang resources；Tongcheng, which was established in 2004, has played fiercely and fiercely for many years，Radical expansion，Become a strong player in OTA，And defected to Wanda in July last year。2016，The power of OTA from all sides is gradually forming。

Over the past few years，Tongcheng has been repeatedly criticized for unclear strategy。Entering 2016，Tongcheng’s strategy seems to be becoming clearer，Especially after entering Wanda territory。June this year，Structure adjustment with the same process，Split the two core businesses，And seek independent listing。Tongcheng Group begins to implement the “big data + people” strategy，Accelerate the momentum of online and offline integration；Tongcheng Travel Agency (Group) has established 6 regional centers and more than 300 directly operated experience stores，And vigorously promote the quality tourism brand and happy life community for middle-aged and elderly people - 100 Travel Club。Same as the previous OTA playstyle，The same process is equally fast and radical when extending offline。

October 2016，Tongcheng announced the merger and reorganization of its Tongcheng Travel Agency (Group) and Wanda Travel。Indicated by Tongcheng，The merger and reorganization with Wanda Tourism is in line with the current strategic decisions of both parties，The 12 travel agencies controlled by Wanda Tourism have been deeply involved in the industry for many years，Accumulated a good reputation advantage in terms of user service experience，Tongcheng hopes to use this to achieve a good start for Tongcheng’s offline layout，Combined with the traffic and efficiency advantages of its own online resources，Enhance the complementarity between online and offline，Optimize and upgrade the industrial structure and service experience；Wanda Tourism stated，The merger and reorganization of the tourism business，On the one hand, it can be seen as an asset reorganization within the group，Enhance the online and offline linkage effect of its tourism sector；On the other hand，As the largest shareholder of Tongcheng，You can use this to obtain higher capital gains in the future。

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One is，The implementation of Tongcheng’s six regional operation centers and 300 directly operated experience stores across the country overlaps with Wanda Tourism’s 12 travel agencies，There is direct competition between the two in actual business operations，How to efficiently collaborate to optimize resources and organizational structure is not difficult for TongchengSmall.

The second is，Is Wanda Tourism dumping 12 travel agencies to dump its burden?？According to Wanda Group’s latest financial report data disclosure analysis，Wanda Tourism’s contribution to Wanda Group’s overall revenue is relatively small，And high cost investment can easily lead to useless profits，And there is the possibility of uneven distribution of resources and shift of strategic focus。Wanda Group may want to get rid of its burden with this adjustment，The main purpose of Wanda acquiring a large number of travel agencies is，Bring customers to Wanda’s scenic spots (theme parks and tourism complex projects)，And tap new values ​​in the tourism industry chain。But travel agency management is not important to Wanda team，Not the section he is good at。Wang Jianlin challenged Disney before this，To develop Wanda City、Paradise and other business，All prove that the group pays more attention to offline scenes、Offline paradise，Instead of traditional travel agencies。Some comments suggest，After a period of exploration，Wanda’s decision to throw the “baggage” to Tongcheng is also a reasonable one。

Three is，Tongcheng wants to go public to gain higher market value and development space，Requires revenue contribution from Wanda Tourism。As understood，Tongcheng’s overall revenue will exceed 60 billion yuan in 2016，Financial revenue will exceed 20 billion yuan，Wanda Tourism’s financial revenue in 2016 exceeded 12 billion yuan。

And in June this year，Tongcheng announced the establishment of a travel agency，Vertically cut into the offline supply chain，Investment in travel agency business reaches 3 billion yuan，1 billion yuan of which is used to establish a travel agency investment fund，Currently Tongcheng has more than 300 offline experience stores。For companies with more than 18,000 employees，Tongcheng needs Wanda’s financial help to solve possible problems。It seems now，The relationship between the two is far more complicated than the disclosed information。

And check out Wu Zhixiang’s personal interviews，The two most mentioned words are “online and offline integration” and “service and reputation”，This is the embodiment of the differentiated system that Tongcheng is trying to create。Wu Zhixiang once publicly stated，For OTA，On the ticket、In standardization fields such as hotels，Internet dividends continue to exist because of the huge traffic，But in the field of non-standard products where decision-making is complex，The benefits of the Internet are no longer particularly obvious。Therefore，OTA companies need to find ways to truly leverage their online advantages，That is to integrate with offline travel agencies。

The following months，Tongcheng announced the blockbuster news of its merger with Wanda Tourism。Tongcheng strongly advocates the development of offline travel agencies，And expect to achieve differentiated competition at scale and high experience。From the perspective of investment cost and effect，There are currently obvious differences with other companies that are also OTAs - Ctrip has successively acquired eLong、Where to go，Holding Travel Knowledge，Merge where to go on vacation，Stand firmly in the OTA world，Liang Jianzhang retreated to the second line，Focus on thinking and promoting Ctrip’s internationalization、Innovation、Long-term development of technology and so on；HNA Travel invested 500 million yuan in Tuniu and became the largest shareholder，Trying to create an O2O closed-loop model，Although Tuniu also has an offline presence, its intensity and scale are much slower than Tongcheng。

Tongcheng explores the way to integrate online and offline，From the perspective of service and product experience，High-cost investment in offline travel agencies is to improve the upgraded experience that is missing online，The efficient collaboration between the two can achieve complete core competitiveness。2016 is a critical year for Tongcheng，Competition among OTAs intensifies losses，All parties are exploring strategic upgrades，Pursue innovation system。Today，The overall situation of the tourism market is still uncertain，The opportunities and challenges left coexist。Whether Tongcheng’s five major strategies can consolidate its position？How should Tongcheng fight after the spin-off？

1. Tongcheng explores the way to integrate online and offline

As per capita GDP begins to move toward US$10,000，The leisure and vacation tourism market has begun to usher in an explosive stage，Tourism companies are rushing in，Hope to get a share of the consumption upgrade process。As an online travel service provider，June 2016，Tongcheng Travel announced that it will be split into two major business segments: Tongcheng Network and Tongcheng Travel Agency (Group)，Focus on air tickets respectively、Hotel、Train tickets and other standard products are the main business 188bet Online Sports Betting and Casino and the business segment focuses on leisure vacation travel and scenic destinations。

End of 2015，Tongcheng proposes implementation strategy，Established a radiation network of "Suzhou headquarters + 6 regional centers"，Forming a strategic development model of “big data + people” through Tongcheng’s big data support。As understood，Tongcheng Network has realized large-scale profits，And maintain a relatively stable growth。The leisure and vacation travel market continues to grow and has not yet formed an absolute monopoly，The required services and experiences are constantly being upgraded，The online part has been difficult to meet the needs of tourists，At this time, the advantages of accumulating offline resources are more obvious，So judging from the overall environment, Tongcheng still has a huge chance of success。But the layout of offline resources is scattered，Small-scale development can easily form a ceiling，For Tongcheng who made his fortune from tickets and online business，Large-scale expansion can easily lead to an increase in management and talent costs，If collaboration cannot be achieved well，Even if there is an incremental market, it is difficult to take advantage of its scale，In addition, integrating a large company like Wanda Tourism is still a big challenge for Tongcheng with strong online genes。

Demand analysis from the non-standard product market，The combination of online transaction traffic advantages and offline travel agencies’ professional travel service capabilities and user experience can form a competitive advantage。Tongcheng aims to build a differentiated system in the leisure and vacation market，Through crazy investment acquisitions and store openings to capture key target markets first。Since 2016，Tongcheng has invested in and acquired many offline travel agencies，And opened more than 300 directly operated experience stores nationwide。October，The merger and reorganization of Tongcheng International Travel Agency and Wanda Travel is regarded as a key event for Tongcheng to deepen its offline travel agency business。2016，The total transaction volume of Tongcheng Travel Group is expected to exceed 60 billion yuan，Financial revenue will reach 20 billion yuan，Service visits will exceed 300 million。According to the "Destination "Internet + Tourism" Development Research Report" data display，Sampling statistics of Tongcheng Travel’s popular destination promotion activities from January to October 2016，In completed promotions，Tongcheng online promotion accounts for 37.5%，Offline activities account for 16.1%，The proportion of online and offline combined promotion is as high as 46.4%。

In terms of destination，Tongcheng continues to explore tourism destination marketing，Promote the development of all-region tourism by deepening strategic cooperation with various tourist destinations。On the specific implementation methods of precise marketing of customer source areas，Vigorously promote the efficient system of online and offline integration and collaboration through offline direct experience stores，Full coverage of first- and second-tier cities has been basically completed，And began to extend to third- and fourth-tier cities。Tongcheng is currently taking more active actions in exploring online and offline integration，Hope to provide consumers with more comprehensive and high-quality landing services，And form a certain scale of reputation。

2. The specific performance of Tongcheng’s deep penetration into the leisure and vacation market

1. Based on the middle-aged and elderly tourism market, establish 100 Travel Club: Relevant data display of "Research Report on Tourism Consumption Behavior of Middle-aged and Elderly People in China 2016"，Currently 81.2% of middle-aged and elderly people are willing to travel。Among them，51.1% of middle-aged and elderly people have participated in cruise travel，The proportion of middle-aged and elderly people who have participated in outbound travel is 68.7%。Tongcheng Travel established "Bailuhui", a middle-aged and elderly tourism service brand，Developing efforts in the middle-aged and elderly tourism market，There are relatively optimistic opportunities from a policy perspective。For this，Tongcheng Bailv will continue to innovate in the form and content of products for middle-aged and elderly people，Gathering middle-aged and elderly people through offline experience stores，Trying to create a closed loop of "service + experience + transaction"。According to Zhihui’s understanding，In order to promote tourism consumption among middle-aged and elderly people，As one of the measures，Tongcheng starts selling and promoting 100 Travel Club membership cards，Recruiting a large number of salespeople，Set KPI indicators for sales assessment，Promote membership cards priced at 1,999 yuan/piece to middle-aged and elderly people，It once caused criticism from consumers。

2.Currently，Tongcheng’s strategic thinking in facing the middle-aged and elderly market seems too vague，Although the transactions directly generated by selling membership cards can very well supplement cash flow，Solve Tongcheng’s liquidity problem，But judging from the results，The original intention of improving user experience faces the risk of discounting。

3. Increase the layout of cruise business：May，Tongcheng Cruise successfully completed its maiden voyage to Tianjin，This is Tongcheng Travel’s first chartered voyage in North China。means the same cruise ship is sailing into 3.0 era。Cruise is a moving destination，It is also a mobile leisure and vacation center，Cruise related vacation products，Such as island tour、Cruise travel is slowly gaining popularity among consumers。The cruise market is real and has development potential。

But Qianzhan Industry Research Institute pointed out，The current Internet penetration rate of cruise ships in China is less than 0.02%，Meaning that operating cruise ships in our country faces two major risks。First, Chinese tourists’ awareness of cruise products is still in its infancy，The frequency of cruise travel is still very low，The current charter model of China Cruise Line requires a large amount of direct investment，Cost pressure and revenue risks appear to be too great，；Second, cruise ships are highly non-standardized products，Rich cruise product SKUs，Also more complicated。Tongcheng’s cruise business layout is currently unable to take advantage of its scale advantage，Currently, companies related to cruise products in my country are still in the stage of price war。

4. Lay out large traffic and obtain air ticket traffic entrance: We know that mass transportation has long been a rigid demand product and traffic entrance in the consumer market，The large traffic crowd is also the first traffic entrance for tourism。July，Tongcheng Travel and Okay Airways signed a strategic cooperation agreement on WeChat air tickets，This is the right step for Tongcheng，Can be analyzed from two aspects: 1.Air tickets are standardized products，Played a great role in promoting the expansion of Tongcheng，Can help products form a larger scale。Just like Ctrip’s acquisition of Skyscanner，I just like Skyscanner’s integration ability in transportation，Can help Ctrip quickly achieve international business growth。二.The unit price of air tickets is higher，And it is a relatively high-frequency product，Good for improving cash flow situation。

Three. Opportunities and challenges faced by Tongcheng’s international expansion

2016 is China’s Outbound Tourism Year，Data display from the "2016 China Outbound Tourism Annual Development Report" released by the China Tourism Academy，The number of Chinese outbound tourists in 2015 reached 1.200 million，Outbound travel consumption reaches US$104.5 billion，Year-on-year growth of over 16.6%，Per capita consumption is 893 US dollars (approximately 6,000 yuan)。With the continuous optimization of the travel environment，Chinese citizens’ demand for outbound travel has been further released，More and more tourism companies are optimistic about China’s outbound tourist source market。The optimization space of the outbound tourism industry chain is further expanded,Capital and technology support the emergence of new outbound tourism models。For Tongcheng，The favorable policies and tourism market trends and the booming outbound tourism market have accelerated Tongcheng’s international layout。

February 2016，Tongcheng and Wanmei Holidays reached strategic cooperation，Both parties established a joint venture in Thailand，Dedicated to the procurement 188bet sports betting app download of local tourism resources and the reception of Chinese tourists traveling to Thailand；June，Strategic cooperation between Tongcheng and Swedish Tourism，Both parties aim to further improve the service level of the same journey travel line，At the same time, it also created a new tourism expert selection model for the Swedish Tourism Board；July，Tongcheng Travel Japan Osaka Branch and Kansai Region Tourist Service Center Officially Opened。This is after Tongcheng Travel established a joint venture with HIS, Japan’s largest listed travel agency group，The first regional branch in Japan，It is also the first branch with the nature of a service center。

Whether it is a domestic tourism enterprise，Still an international giant，The integration of overseas fragmented resources (non-standard) is relatively slow。If non-standard products are to be combined with the Internet，Combined with the online part，Necessarily requires high penetration rate，Move destination products online，There is currently a lack of similar tickets in the industry、Fragmented GDS distribution system like hotels。And Yelp，Open Table has also been proven to be unsuitable for Chinese outbound tourists。The domestic Xinmei Dayong system integrates these fragmented resources through the crowd strategy and forced local promotion，However, the "Internet + Lifestyle" concept and specific business it advocates do not pose a threat to online tourism companies。

Tongcheng’s international layout will face the following challenges:

First, tourists’ demand for fragmented resources after going abroad，It is difficult to achieve both scale and efficiency improvement through the integration of products including higher gross profit；

Second, competition among international giants，Priceline、International tourism companies such as Expedia and TripAdvisor are the first things Tongcheng needs to face。Ctrip, the leader of domestic OTAs in the past two years，Conducted several investments and mergers and acquisitions in the international market，Accelerating international layout，Recently acquired Yuansearch Skyscanner，Overall view，Ctrip’s international layout is still in its early stages，Liang Jianzhang’s second retirement is seen as the beginning of Ctrip’s acceleration of international layout；

Third, international layout faces challenges in talent and management；Tongcheng launches global recruitment plan，Designate 2016 as the Year of Outbound Tourism，And launched ten new measures including setting up six major operation centers in China。In the opinion of industry insiders，The launch of this global recruitment is one of the measures taken by Tongcheng Travel to implement its strategy，However, the internationalization capabilities of Chinese enterprises are generally weak，Few successful people，Can Tongcheng Travel find its own path to internationalization？

IV. Tongcheng Travel’s innovative financial system

From the perspective of the impact of tourism on social economy，The comprehensive contribution of tourism to the national economy and employment exceeds 10%，Meaning the impact of tourism on all areas of the national economy including finance、Entrepreneurship and innovation in various industries are strategic opportunities。The integration and innovation of tourism + Internet + finance is the future direction of OTA，Relative to house and car，Relatively high frequency of travel，Compared to catering，Tourist unit price is higher，Daily transactions will generate a large amount of funds，In addition, OTA has a high degree of informatization，Most suitable for combination with finance，Conforming to the development trend of Internet finance。Tongcheng’s current layout in “tourism + finance” is earlier and more comprehensive。

End of 2015，Establishment of Tongcheng Financial Services Company，Various financial management and travel installment products will be launched soon；Firefly Small Loan Company was established in Guangzhou in early 2016，Became one of the first online travel companies in China to obtain an Internet small loan license；June，Tongcheng announced that it will cooperate with Tianan Property Insurance Co., Ltd.、China Pacific Property & Casualty Insurance Co., Ltd.、Three insurance companies of China People's Property Insurance Co., Ltd. form the "Business 188bet sports betting app download Travel Comprehensive Insurance" co-insurance body，Jointly launch integrated financial management、Risk Protection、A comprehensive financial product integrating business and travel services。Ma Heping, President of Tongcheng said，1.5 billion yuan will be invested in the future，Create integrated financial resources、Unified platform for innovative financial services。

In addition to Tongcheng，Like Ctrip、Many well-known OTAs such as Tuniu are stepping up their deployment in the financial industry: second half of 2015，Tuniu Financial Services, a subsidiary of Tuniu specially established for financial services, has launched self-operated consumer installment products，Start with first payment、Interest-free installment repayment and other measures；Ctrip launched prepaid card wealth management products in 2014，Established Ctrip Financial Division，Revealing its ambition to enter the financial business。Take American Express as an example，American Express, founded in 1850, is the largest travel service and comprehensive financial company in the world、Global company in financial investment and information processing。Although this company is also now expanding financial services for institutions，However, financial services revenue directly to domestic and international travelers still accounts for 67% of the total turnover.8%。This shows that financial services featuring tourism can become an independent business segment，It can also support the strategic growth of world-class enterprises。”In China，There may be financial services companies similar to American Express’s business model in the future，”Some tourism companies involved in the financial field have indeed set American Express as their development goals，Back in 2007，Ctrip executives have publicly revealed that they will work hard to catch up with American Express。

5. Tongcheng Branding Strategy

Whether it is the international travel giant Expedia，It is still one of the major domestic tourism groups，The high cost of brand marketing has become an inevitable cost budget for every company，The ongoing price war among online travel companies once became the Achilles heel of each company’s profits。In recent years，The popularity of China’s entertainment reality shows has attracted high favor including tourism companies，The large number of users gathered by the program and the highly intensive brand exposure have become the standards for competition among various companies，Therefore it is not uncommon to spend huge amounts of money on naming。In addition，Travel IP、Travel+Live Broadcast、Travel Spring Festival Gala、Travel + audio and other communication forms have become new innovations in Tongcheng’s branding strategy，The investment in this aspect can be said to be high-profile。

Summary

current，Among the major OTAs，Most are still in the loss stage，Show profitability、Improving their own value has become the most urgent matter for online travel companies。At the Tuniu 10th Anniversary Conference，Founder and CEO Yu Dunde said that Tuniu will strive to achieve profitability first，After Tongcheng split，Also hope to achieve breakeven in 2017。Wu Zhixiang, founder and CEO of Tongcheng Travel, said in an interview，The online travel industry will become more and more rational，Price wars and other money-burning behaviors will gradually decrease，Profit is the most important issue。

Pass review，We found that online travel companies face some common difficulties，If customer acquisition costs and marketing costs are high，Some business lines suffer serious losses, etc.，Each company has different solutions。Ctrip acquires eLong、Qunar becomes the leading company in the standard product market，The rising star Tuniu、Tongcheng、The three families of Donkey Mother chose to lean against the big tree，Tuniu enters HNA territory，Tongcheng chose Wanda Group to become its first shareholder，Jinjiang Group incorporates Lv Mama into its expansion territory。Each company relies on the strong resources of shareholders，A new round of competition has begun。Facing the pressure of competition and profitability，Tongcheng seems to have a plan，Previously，Wu Zhixiang said in an interview with the media，Tongcheng Travel 188bet sports betting app download is expected to be profitable in 2017，Revenue in 2018 exceeded 50 billion yuan，Net profit exceeds 2 billion yuan。

Working hard to achieve profitability, 2017 will be an exciting year.

* Wu Zhixiang, founder and CEO of Tongcheng Travel, confirmed to attend the "2016 China Tourism Big Consumption Annual Summit and Awards Ceremony"。

*Author of this article: Chen Ju (personal WeChat: cham_ch)，Executive reporter，Welcome to follow and communicate！

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