CCTV found the popular travel booking site charges more than 40% commission for refunding a travel package costing 1,057 yuan (US$170), with the main item being a round-trip plane ticket from Qingdao to Beijing. Airlines, in comparison, typically charge 5% commission for refunding plane tickets returned before takeoff or 10% after takeoff.
In addition to plane tickets, the travel package service offered by Ctrip also includes hotel accommodation and admission tickets for travel sites. The website charges 947 yuan (US$152.50) for the plane ticket, a markup of 87 yuan (US$14) over the actual price of 860 yuan (US$138.50), on top of the exorbitant commission for refunding.
Ctrip alleged that the commission for plane ticket refunding is actually collected by ticket agents, rather than the website.
At the end of 2013, Ctrip opened up its platform to travel agencies and ticket agents for sales of travel products or plane tickets, collecting fixed commissions from the latter, rather than cuts on sales. The website claims that such platform partners will number several thousands in the future, allowing consumers to make comparisons among products offered by those partners.
"The opening of its platform enables consumers to purchase plane tickets or travel products at the lowest prices but risks the inclusion of unscrupulous partners," said an industry insider.
The open platform practice of Ctrip and other travel sites originates from price comparison sites for the sales of plane tickets and travel products, whose agents often profit from commissions provided by airlines or hotels for massive sales of their products. With airlines lowering the commissions for such agents, they compensated by hiking the commission for refunding bookings to offset the thin profit margin, according to market players. Statistics show that the return rate for plane tickets in China stands at less than 5%.
Source: Want China Times
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