1999 was a year that we couldn’t go back to, and we thanked the era of the great company and great cause.
Editor’s note: This article is from WeChat public account “Travel Star “The sea” (ID: travelzoo_0021), author Xu Yi, formerly titled “ 20 years of past, present and future online (below)”
Recommended to read the previous article: Online travel for 20 years , present and future
1999 is a great year. This is the year of the establishment of Ctrip Yilong. It is also the starting point for the development of China’s Internet. A large number of knowledgeable sea turtles have begun to return to China this year.
Liang Jianzhang of Oracle China, Shen Nanpeng who has experienced Citibank and Lehman Brothers, and Tang Yue on the other side of the ocean, it is an era with dreams and many possibilities.
If time is pushed forward one more year, Tencent and Sohu are established in 1998
Ali was established in 1999
Baidu was established in 2000
……
It seems that today’s Internet giants were chosen by the crazy era when the new millennium arrived. Of course, the people behind them were chosen to change the people behind history.
Back to the battlefield of online travel, in the past two decades, China’s online travel has sung all the way, and has passed the first half of the leaps and bounds.
Today, Ctrip, Flying Pig, Ma Honeycomb, and Tongcheng Yilong’s online travel pattern were initially set. Cross-border small and beautiful travel agencies have sprung up, wholesalers and land exchanges have lost profits, and early travel startups have closed down.
Not that the current tour is too difficult to do, but the past tour was too good.
This is a timeline for the key nodes in online travel development. It can be roughly divided into four periods, from the germination period of Ctrip Yilong in 1999 to the start-up period from 2003 to 2008.
Today’s scale of OTA, Tuniu, Tongcheng, Qunar, Poor, and Cellular are all established during this period. Although Ctrip is already listed in the US at this time, China has There are still a lot of pain points in the huge user base and leisure holiday market, and there are still plenty of opportunities for online travel.
Time has entered 2009, the way to the cattle, the two Internet giants who do not travel began to formally travel, and do a good job, Ali travel changed its name to flying pigs, the US group established an independent brand watermelon travel, online travel officially Enter the outbreak period.
After 2018, the pattern of online travel has basically appeared. After the past 20 years of development, each has its own core strengths, relative barriers and user groups.
Ctrip: The advantages in scale, user base, supply chain, technology system, brand and user mind are obvious
Toriu: It has obvious advantages in resource direct mining, trading system and brand accumulation
The same journey: We have the unparalleled traffic entry advantage of WeChat
After Cell: Decision-making consumption closed loop based on content + platform
Meituan: With high-frequency advantages and local life attributes, the advantages in hotels, play, etc. are obvious
Flying Pig: With mature trading platform + traffic advantage, the transaction efficiency is the highest
20 years of online travel business model and role change
Although they are all online travel companies, but after 20 years of down, each company’s business model and role are different, we first look at the business model.
There are mainly six types of self-operated, agent and retail as well as supplier OEM, dynamic packaging and semi-packaging.
Self-operated is the independent research and development of products, direct resources, products from production to service are done by themselves, Tuniu’s overseas direct mining, Ctrip self-employment is currently this practice.
The agent is the supplier to provide products to OTA, OTA to help the operation, the two sides cooperate in the cost increase mode, the order consultation, pre-sales and after-sales service is completed by OTA, this part of the operating cost is in OTA, the merchants only provide products and Travel services, such as: vacation agency business with the same way out of the way cattle
Retail is a “Taobao” model derived from the expansion of OTA scale, which requires a certain amount of traffic.OTA only provides traffic import, in the mode of platform trading commission, the pre-sales and after-sales service of the order is completed by the supplier, the platform only provides the transaction portal, and the retail mode can help OTA improve the product richness and resource coverage, relative agent and self In the battalion mode, it is relatively “light” because it does not involve resource procurement and does not involve pre-sales consulting services, such as the current flying pig hen honeycomb and the US group.
The OEM model is a supplier OEM, similar to the manufacturing model of the mobile phone industry. Suppliers provide tourism products and services according to the standards given by OTA. This model combines the efficiency of the resource side and also takes care of OTA. The brand distinction is a relatively good cooperation model.
In addition to these four common trading modes, there are two kinds of technical means to bring the transaction mode to super free travel, also called dynamic packaging. With the expansion of the free-market market, users’ travel experience is mature. Need more independent choices to meet the demand, Ctrip also provides individual resources such as air tickets, hotels, visas, destinations, and pick-up and drop-off to the user’s own combination, package themselves into a line, dynamic packaging requires a powerful background resource system Guaranteed ticket, hotel program matching and price accuracy, and front-end enough user scale to ensure the entire logic run, now the industry can really do dynamic packaging is currently Ctrip and Wayne.
This is the common 6 business model of OTA. It is also used by an OTA at the same time. For example, Ctrip has these 6 modes.
In fact, each model has its strengths and weaknesses and the necessary conditions to determine its success.
Retail can maximize the problem of transaction efficiency, but the commission rate is low, the control of resources is not enough, no resources are touched, services are not touched, it is a light operation mode, and because services are not touched, services are standardized. And the quality is lacking, and there are also the possibility that the flyers and suppliers themselves deposit users.
The agent’s commission rate is relatively high. The service is more standardized because it is provided by OTA, but it requires the platform to provide customer service and operating costs. The conversion rate is lower than the retail model, because in the understanding of tourism products, Must be more professional.
The self-operated commission rate is the highest, and the service is controllable. It is also easy to accumulate advantages on the resource side. The self-operated mode is “take one more kilometer”, that is, after you hold the traffic, you have to master the resources, but The self-operated model needs to support the operation and customer service costs. At the same time, the requirements for the passenger capacity are also very high. The charter/private room is prone to hard damage, and the amount of hard damage is very large at the beginning of the business. Therefore, it is necessary to do a self-operated business. The financial strength and confidence, self-operating early losses are almost inevitable.
The OEM model requires a certain degree of control over the supplier and its ability to stabilize the customer. Because there is only a guarantee of quantity, there will be enough chips to find a supplier who is willing to customize cooperation for you.Guests are provided with exclusive services such as a uniform LOGO bus, restaurants, guides and hotels.
DP and SDP both have strong data systems and user bases, and they must be based on scale traffic.
With the rise of the flying pig and the cellular retail platform, there are now many new suppliers relying on platform growth to open stores on the platform. These suppliers often have accumulated many years of destination resources, relying on the OTA platform to receive customers and pay. Commissioning commissions for the platform, pre-sales consulting and after-sales service are all done by themselves. This efficiency is often very high. If you can really polish the service and quality, have a continuous word-of-mouth communication and a certain percentage of repurchase, appropriate OTA’s guests do some precipitation and conversion of their own brands. This model is very good. In fact, this is also the choice of Chinese travel entrepreneurs today.
In particular, the merchants above the cellular, there is a strong content output capability, because at the destination for many years, the understanding and professionalism of the destination are more than OTA, these vertical and small companies in the destination, often Hold up a good business.
After finishing the business model, look at the changes in the business role:
In 2013-2018, OTA triumphed and capital investment and financing was very active. The background of this period of time was that the Internet user dividend ended, and new users were all finished, and the new downloads of the app could not go up, so Start digging into the value of single users of old users.
Rather than spending a higher cost of customers to grab a new user, it is better to intensively maintain existing users, let a user stay, and continue to repurchase consumption, which is now from the members of various OTAs. The pattern can be seen.
From the development stage, the stage of traffic dividends has passed, and the cost of getting customers is getting more and more expensive. The profitability determines how long a company can live and search traffic is getting weaker. Community traffic and content traffic become online travel. New battlefield.
The leisure and holiday sector business, which is still not profitable today, is waiting for the final moment of the ruling.
Value chain for the travel industry
What I just said is the change in these 20 years. Is there anything that has not changed for 20 years?
Yes
All industries are divided into two parts: value creation and value transfer. From the perspective of the industry chain of the tourism industry, one product has gone through two links from resources to users. One is the joint that creates value, and the other is the transmission. The link of value, the travel suppliers and resource providers we see today are actuallyCreate value links, and OTA, offline stores, travel distributors, product promotion, and promotion are all in the process of delivering value.
There are many criticisms in the tourism industry in previous years. It is because tourism products have gone through the price increase of many links from resource providers to users. However, these links do not really create value for users and products. Simply increase the price, “act as a porter of nature.”
The Internet breaks the information asymmetry and constantly eliminates the intermediate links. The information that many users have not been able to access before is now very well acquired, so I feel cheated, see how much you earned, and know that you did not provide Additional value.
In the past, the development of the tourism industry, from offline to online, from OTA to stores, from B2B to B2C, is the same thing, that is, value transfer, which reflects the sale of goods And about the value of the product itself, such as production, such as design, such as gameplay, there is almost no innovation and change.
A really good business model must be more efficient for the industry and truly valuable to users and resource providers.
If you are in the travel industry, you can compare which part of the value chain your own work or company is in, whether it is really valuable to the user, and whether it is more efficient for the industry.
Creating value is also divided into two parts: one is design (ODM), the other is production (OEM), design + production constitutes the creative value of the product.
The price of tourism products = creation value + delivery value (also known as cost price + channel price), some products are not expensive, but the channel price is very expensive, because he has a lot of middle chain or pass the fee cost.
We also call this product a high rate, what is the fixed rate?
The price of the product to the user is divided by the cost price of the product. The cost of 100 yuan is 500, and the rate is 5 times. In China’s current shoe and apparel industry, the fixed rate is generally 5- 10 times, the cosmetics industry is generally 20-50 times, so large