(Bloomberg) Ctrip.com International Ltd. forecast revenue well below expectations, blaming the shortfall on new rules that constrained its business as well as a childcare scandal that drove customers away.
Shares in the world's No. 2 online travel service fell after the Chinese company said sales would rise 9 to 11 percent this quarter, lagging the 16 percent analysts projected. Ctrip, which is backed by global leader Booking Holdings Inc., also reported fourth-quarter revenue below estimates.
Executives lamented the impact of a ban on the default-bundling of services such as insurance and other extras with airfares, instituted by regulators after consumers complained about hidden charges.
Ctrip also blamed the backlash from footage posted online of infants getting abused and fed wasabi at a childcare center for employees. Though the center was run by a third-party, video of the incidents went viral and provoked widespread condemnation of the company online.
"We had an unfortunate PR crisis coincident with the change of VAS value added service process," Chief Financial Officer Cindy Wang said. "We saw some negative impact on Ctrip brand and traffic in the short run starting from the latter part of last quarter last year and first quarter of 2018."
Wang said however the ill-effects were starting to fade thanks to recovery efforts by the company and government authorities. The childcare center has been shuttered, a Ctrip representative said. The company now expects growth to bounce back in the second half, even as competition from the likes of Meituan Travel and Alibaba Group Holding Ltd.'s Fliggy remains on the rise.
China's largest online travel service is accelerating efforts to find new sources of hotel room inventory around the world, evolving into an international player akin to minority shareholder Booking Holdings -- formerly known as Priceline. It's actively looking for acquisitions, building on a shopping spree that included the U.K.'s Skyscanner.
"We will see our growth recovery towards the later part of the year," Wang said.
Source: Bloomberg
from China Travel & Tourism News http://ift.tt/1iB6EFm |  | |  |  |
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