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China's Ctrip Becomes Controlling Shareholder of ezTravel

2009/08/06 | By Philip Liu

Taipei, Aug. 6, 2009 (CENS)--Ctrip and ezTravel, the leading online travel websites in China and Taiwan, respectively, have entered a close bond, as the former has anted up its stake in the latter over 50%, paving the way for both to tap the fast expanding cross-Strait online travel market together.

Ctrip, a NASDAQ-listed company, disclosed yesterday (Aug. 5) in its second-quarter financial statement the increase of its stake in ezTravel to the level requiring it to compile consolidated financial statement with the latter, indirectly indicating that its stake in ezTravel has exceeded 50%, up from original 20%. Listed enterprises must produce consolidated financial statement with subsidiaries in which they own over 50% stake or majority voting right, according to the U.S. accounting criteria.

The increased stake is expected to further intensify the cooperation between the two websites in tapping the fast-growing cross-Strait online travel market, thanks to the thawing cross-Strait relationship. In March, Ctrip rolled out online Taiwan-travel service, in cooperation with ezTravel, ahead of other Chinese online travel websites.

Sun Jie, chief financial officer of Ctrip, noted that the increased investment is out of strategic consideration, pointing to the strong attraction of Taiwan travel for Chinese tourists. The cooperation between the two websites can provide more value-added service to Chinese tourists to Taiwan and ezTravel can book hotel accommodations via Ctrip platform for Taiwanese tourists to China, according to Sun. Ctrip bought 20% stake in ezTravel Ctrip in 2006 in personal name before the latter became a private company in August 2008.

Yu Chin-chang, president of ezTravel, remarked that the cooperation between the two websites is supplementary, as Ctrip owns massive market and ezTravel possesses advanced online technology and creative talents. He pointed out that thanks to the influx of Chinese tourists, ezTravel scored record revenue and profit in the first half this year.

Ctrip now boasts 60% share in the Chinese online travel market, with total revenue reaching US$1.7 billion in 2008. Founded in 2000, ezTravel racked up NT$5.1 billion of revenue last year and has 500 employees.