The Infernal Affairs and Rashomon between Ctrip and Qunar

Regarding the rumors about the merger between Ctrip and Qunar , Qunar gave the answer: Not willing.

On June 2, Qunar.com announced when releasing its first quarter report, "On May 8, Qunar.com received an unsolicited acquisition offer from Ctrip, but Qunar.com rejected the proposal in writing on June 1."

Yesterday (June 3), Ctrip responded to a reporter from the "Daily Economic News" that based on Qunar's recent performance and corporate behavior, Ctrip no longer has interest in continuing to explore possible investment opportunities with Qunar and has terminated relevant negotiations.

A person from Ctrip's public relations department said, "When Qunar.com took the initiative to contact Ctrip about its intention to invest in it, Ctrip sent a preliminary acquisition proposal containing confidentiality clauses and no legal binding force to the board of directors of Qunar.com, expressing its possible interest in acquiring Qunar.com. This week, Ctrip received a written notice from Qunar.com rejecting the proposal and expressing its hope to further negotiate with Ctrip on this matter."

Qunar.com CEO Zhuang Chenchao said in an internal email that Qunar.com officially rejected Ctrip's acquisition offer on June 1 and will always maintain an open attitude in investment, mergers and acquisitions and integration.

Just after Qunar.com announced that it had rejected Ctrip's acquisition offer, Ctrip's stock price fell 5.6% to $77.04 on Tuesday (June 2), the biggest drop in nearly six months. Qunar.com's stock price remained basically unchanged, closing at $46.02.

U.S. brokerage Stifel announced on Tuesday that it would downgrade Ctrip's stock rating from buy to hold, mainly because "Ctrip will take countermeasures against Qunar's competitive actions."

Bao Liwei, an analyst at Travel Daily, said, "Ctrip and Qunar seem to have only two options: either come together to share the value increase, or cling to each other and suffer a lose-lose situation in terms of short- and medium-term profitability. Perhaps the ideal situation is for the two companies to merge. If they merge, the growth rate of the new company in the next few years is expected to remain at 60% to 70%, or even higher, and the conservative valuation of the new company is between US$25 billion and US$30 billion."

The reporter noticed that before Qunar.com released its first quarter report, several online travel giants had already released their financial reports, and the results were basically in line with the industry's expectations. The first quarter report showed that Ctrip lost 126 million yuan; eLong had a net loss of 181 million yuan; Tuniu had a net loss of 233 million yuan; and Qunar.com had a net loss of 701 million yuan. It seems that the online travel giants have entered a vicious cycle of "investors injecting capital - subsidizing clients - performance losses".

Bao Liwei said, "Competition among OTAs has become increasingly fierce. These companies have significantly increased their investment in R&D and marketing. Competition will make it difficult to reduce costs in the short term."

Major online travel giants are favored by capital even as they continue to suffer losses. Recently, Tuniu received a $500 million investment led by JD.com; Ctrip acquired part of eLong’s equity, invested in Tuniu, and received an additional $250 million investment from Priceline, an international online travel giant; Tongcheng announced the restart of its IPO; on June 1, Lvmama also announced that it had received a strategic investment of 500 million yuan from Jinjiang International Group; Qunar announced the termination of its intimate agreement with its controlling shareholder Baidu , and received a $500 million investment led by Silver Lake Investment Group.

The above financing behavior may mean that the "money-burning" war between online travel giants will resume.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.