Closer alliance forged by Princeline with Ctrip to promote tourist traffic from China

San Diego News .Net Thursday 7th August, 2014

WASHINGTON / SHANGHAI - Expanding on the existing commercial relationship, Priceline Group, world leader in online accommodation reservations, has agreed to invest $500 million in China's biggest online travel company Ctrip.com International.

The Priceline investment will be through a convertible bond.

Ctrip, China's largest online travel has granted the Priceline Group permission to acquire Ctrip shares in the open market over the next twelve months, so that combined with shares convertible under the bond Priceline Group may hold up to 10% of Ctrip's outstanding shares.

Upon purchase of the convertible bond, The Priceline Group will acquire the right to appoint an observer to the Ctrip board of directors.

Expansion of the commercial relationship, established in 2012, is expected to build upon a history of cross-promoting accommodations inventory between the companies.

Through promotion of tourism to and from China, Ctrip is expected to help Priceline Group's global portfolio of over 500,000 accommodations outside of the Greater China Region, and the US company's customers to reach Ctrip's over 100,000 accommodations in the Greater China Region.

The Priceline Group and Ctrip will offer their respective hotel inventory to each other on an enlarged scale with more favorable partnership terms, including an agreement to enhance promotional efforts.

Ctrip has agreed to offer additional Priceline Group brand services to its customers, including inventory from rentalcars.com and OpenTable.

In turn, the Priceline Group has agreed to promote Ctrip's other travel services to its customers, including air ticketing and attraction ticketing services.

"Ctrip is the clear leader in online travel in China and we are pleased with the growth in Ctrip bookings through Booking.com and Agoda over the last two years. We are eager to build upon what has already become a great partnership, and thrilled to be able to offer our customers even more hotel options in China," said Darren Huston, President and CEO of The Priceline Group.

"Travel to and from China is growing rapidly, and through this partnership, we have an opportunity to further help the world experience China, and China experience the world."

Chinese travelers, currently accounting for nearly one in 10 tourists globally, are known as the biggest spenders in the world, making the arrangement very attractive market for travel companies.

"The Priceline Group is the global leader in online accommodations, and as such, a key strategic partner for us as we look to expand our global footprint," said James Liang, Co-founder, Chairman and CEO of Ctrip. "We are eager to jointly invest in improving the experience for travelers worldwide."