Strategy

Expedia Sells China Stakes

The online travel site is one of several companies that have recently relinquished majority ownership of Chinese ventures.
Katie Kuehner-HebertMay 22, 2015

Expedia Friday said that it had sold its stake in eLong to several Chinese firms, with industry observers noting that the money-losing venture for Expedia could actually be a boon to some of the buyers.

The Bellevue, Wash.-based online travel company said that it had sold its 62.4% majority stake in the Chinese mobile and online travel service to several companies based there, including Ctrip.com, Keystone Lodging, Plateno Group, and Luxuriant, for a total purchase price of roughly $671 million.

“In addition, Expedia and Ctrip have agreed to cooperate with each other to allow their respective customers to benefit from certain travel product offerings for specified geographic markets,” the company said.

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A Wall Street Journal article Friday said that eLong’s growing losses have weighed on Expedia’s profit.

“In its most recent quarter, Expedia warned that spending would continue to grow at eLong, where losses have widened as the website spends more on sales staff, marketing, and discounts to lure travelers in the world’s most populous nation,” the WSJ wrote. “Expedia’s first-quarter profit fell 31%, in part thanks to eLong.”

However, the sale could bea huge win for Ctrip, which has now tamed its closest competitor,” according to a TechInAsia article.

“That leaves Ctrip freer to focus on newer and fast-growing rivals such as Baidu-owned Qunar, Tuniu, and LY,” TechInAsia wrote.