Welcome to Issue 231 of Asia Travel Re:Set.
“The competitive landscape for Ctrip continues to evolve... Chinese OTAs were sacrificing their bottom lines in a price war to gain customers from competitors.”
Price wars are not new in China’s online travel space. Anyone watching closely will have witnessed intense price competition in the mid-2000s, and in the early 2010s.
The above quote is from a 2018 White Paper, called The Future of the Online Travel Giants: Ctrip, for which I was the Executive Editor.
This time it’s different. Race-to-the-bottom pricing is endemic across China’s vast platform economy.
The Chinese government is determined to stem the squeezing of suppliers that enable artificially reduced prices for consumers (who now habitually expect deep discounts and purchasing incentives).
As a result, Trip.com has been landed with an RMB5.179 billion fine by China’s State Administration for Market Regulation (SAMR) - and various structural issues to resolve.
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Being accused, investigated and found guilty of monopolistic conduct is a stain on a company’s reputation. Ctrip must wear this, and make transparent a series of rectification measures ordered by the State Administration for Market Regulation.
Ctrip – the Chinese entity of a larger company known as Trip.com worldwide – is China’s oldest and largest OTA. Trip.com is a familiar travel industry presence. Its logo is splashed across the air bridges and ad screens of Kuala Lumpur International Airport and Bangkok Suvarnabhumi International Airport. It is a prominent exhibitor at travel trade shows and its executives speak at leading travel conferences.
A large proportion of Chinese tourists in South East Asia booked at least part of their trip via Ctrip, and an increasing number of regional travellers use the platform to book vacations in China. In a special conference call on Monday, Trip.com confirmed that “APAC remains the cornerstone for our international business.”
This case relates to Ctrip’s domestic business in China. It was the first anti-monopoly investigation in China’s online travel industry, and the first case involving, in the SAMR’s words, “This type of novel monopolistic behaviour.“
Worldwide, Trip.com earned total revenue of RMB62.5 billion (US$8.9 billion) in 2025, up 17% from 2024. The fine levied by the SAMR amounts to 7.5% of Ctrip’s 2025 domestic sales revenue in China.
Firstly, the SAMR says Ctrip incentivised hotels to adopt ‘exclusive status’ by offering them preferential traffic allocation. This “required the hotels to sell their entire online room inventory exclusively on Ctrip” and “prohibited them from cooperating with competing platforms”.
Secondly, Ctrip “mandated hotels operating across multiple platforms to offer the ‘lowest price across the entire web’ - requiring ‘Gold-tier’ hotels to set prices at least 20 yuan or 5% lower than on other platforms, and ‘Non-tiered’ hotels to set prices no higher than those on other platforms”. If a hotel’s price was found to exceed that on other platforms, a ‘Price Adjustment’ tool “automatically lowers the price to the market-wide minimum.”
Other penalties imposed on hotels included “restricting traffic, revoking status designations (‘delisting’), and deducting order security deposits.”
These “constitute an abuse of market dominance by imposing unreasonable trading conditions,” said the SAMR.
China’s trade competition regulator pulled no punches in its verdict. It found Ctrip guilty of “abusing its dominant market position to engage in monopolistic conduct… through the use of data, algorithms, technology, or platform rules.”
The SAMR noted that “the penalties are significant for regulating the business practices of platform enterprises, maintaining fair market competition, safeguarding the legitimate interests of both business operators and consumers, and promoting the healthy development of the platform economy.”
The investigation began in January, and the seriousness of the case meant Ctrip faced a heavy penalty. The clues were signposted during its Q1 Earnings Call on 25 June.
“Looking into the second quarter [of 2026], we expect net revenue growth of approximately 3% to 8% year-over-year compared with the exceptionally strong [17%] growth in Q1,” said Cindy Wang, Trip.com’s CFO. “This guidance incorporates the near-term impact of upgrading our operational practices to align with updated industry standards and compliance framework.”
Trip,com has confirmed that the RMB3.521 billion fine, the confiscated RMB1.658 billion of “illegal gains,” and the RMB122 million of refunds to hotel operators will be absorbed into its Q2 accounts – which are expected to be published shortly.
This is all about China’s platform economy – and the government’s drive to eliminate “rat-race competition”. A deflationary environment has been exacerbated by ferocious price wars across the e-commerce landscape, including travel.
The size of the financial punishment, and the unflinching wording of the verdict, was formulated to reverberate throughout China’s platform economy.
Trip.com says it will implement “several strategic initiatives… to enhance [its] antitrust compliance system,” but warned on this week’s conference call that:
“As the transition progresses, we may see some fluctuation in our financial performance.”
As we say goodbye to July, The South East Asia Travel Show reviews the latest hot topics in travel and tourism from across South East Asia, China and India.
We break down Trip.com’s multi-billion-RMB fine for "monopolistic practices"
In Malaysia, an unexpected F1 Grand Prix race is raising the tourism temperature
In Singapore, the national carrier’s record quarterly revenue is offset by a stinging 78.5% rise in fuel costs
Cambodia Airlines ordered 20 COMAC aircraft and Thai AirAsia's suspended 9 domestic flight routes from Bangkok Suvarnabhumi until October.
How is Singapore's upcoming concert tourism season viewed by India’s media?
And how is AI impacting tour guiding?
Finally, to the Philippines for a humorous tale about a prospective jailhouse stay…
➡️ Click the live link below - or HERE - to listen to Trip.com’s Record Fine, Singapore Airlines’ Topsy-Turvy Financials & AI vs Tour Guides: Start the Weekend with The South East Asia Travel Show
Search for The South East Asia Travel Show on any podcast app.
Thanks for reading, that’s a wrap for Issue 231.
Asia Travel Re:Set will return next Sunday.
Meantime, find me on LinkedIn.
Safe travels…
Gary
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