Skyscanner acquired by China’s Ctrip for £1.40 billion

China’s largest online travel company, Ctrip, is looking to expand its reach beyond its home market by agreeing to buy Scotland-based Skyscanner, the air-ticketing specialist, for an agreed £1.4 billion. Back in January the Scottish startup had been valued at £1.0 billion after a round of financing. Skyscanner was founded 13 years ago, and currently has 60 million active monthly users searching for travel options and prices. The platform had been reported last month as looking for a buyer or to go public.
Skyscanner’s 2015 reported revenue was £120 million, up 29% year on year, with profit standing at £17.50 million, up 3% year on year.
Ctrip’s growth over the last few years has been tied to the phenomenal rise in Chinese tourism, though its existence is hardly known beyond China. It has been estimated that in September Ctrip handled nearly 70% of all online Chinese travel transactions. Until recently, Chinese tourists have used low-cost tour groups to visit foreign destinations, but with the increased use of and access to the Internet, plus rising affluence, independent travel has become more popular. Last year 10% of all travel sales were conducted online.
Uncertainty surrounds the acquisition of Skyscanner as to whether Ctrip is going to target new foreign customers, or whether they intend to help Chinese tourists travelling abroad.
According to Gartner Inc. research director Sandy Shen, “There’s a lot of Chinese companies moving overseas by either building their own offices or via acquisition, but it’s not that easy where you can just buy one company and use it as a channel to sell your own services.
“This could also be designed to help Chinese consumers when they travel overseas so that it’s easier to search for international flights.”
This latest purchase continues the Chinese spending spree in Europe. According to research by Deloitte, Chinese, 171 acquisitions across Europe with a combined deal value of $88.4 billion have been confirmed in 2016, already 40% up on all similar deals for 2015.
(£1.00 = $US1.25 at time of publication.)