Trip's Unbridled Behavior

On August 27, 2024, Trip (携程) released its latest financial report, showing impressive growth across various revenue indicators. Internationally, Trip has expanded its footprint by acquiring similar brands overseas, leading some market observers to believe that its international operations are thriving. However, upon examining various overseas review platforms, one can find an abundance of negative feedback, similar to the example above.

Against the backdrop of Chinese companies expanding overseas, Trip is undoubtedly one of the beneficiaries. Whether for international business travel or leisure tourism, Trip has become a major choice for Chinese users. At the end of August 2024, Trip released its financial report, indicating that in the second quarter, the company’s net revenue reached RMB 12.8 billion. Hotel booking revenue was RMB 5.1 billion, transportation ticketing RMB 4.9 billion, vacation business RMB 1 billion, and business travel services RMB 630 million, all showing strong growth momentum. Clearly, Trip's various online ticketing services are experiencing steady growth.

Simultaneously, Trip's international expansion is accelerating. Since 2017, Trip has been actively expanding its overseas business by acquiring several international brands, including the UK’s Skyscanner, India’s MakeMyTrip, and the Netherlands’ Travix. These acquisitions helped Trip establish a strong foothold in Europe, India, and other regions, expanding its share in the global travel market. The trip has also increased investments in the Asia-Pacific region, partnering with key global travel entities to further bolster its leadership position in international markets.

The growing numbers from Trip suggest that its international business is thriving. However, EqualOcean, a think tank focused on international business, remains skeptical of the underlying issues behind these figures. Based on various on-the-ground insights from Trip’s international operations, some less visible aspects of its expansion can be revealed.

Why has Trip developed so rapidly?

In 2023, Trip vigorously promoted the recovery and expansion of the domestic market, actively collaborating with multiple Chinese provinces to launch cultural and tourism vouchers during the Lunar New Year, attracting more tourists. These promotional activities not only helped Trip revitalize the domestic travel market but also led the company to achieve a total revenue of RMB 44.5 billion for the year, with a net profit of RMB 10 billion, representing a 614% year-on-year increase. Trip’s success in the domestic market can largely be attributed to its well-executed business operations.

The Survival Dilemma: "Not participating means extinction, but participating is also hard."

In today's fiercely competitive tourism market, travel agencies struggle to attract enough customers without collaborating with OTAs (Online Travel Agencies) like Trip. Traditional promotion methods, such as opening physical stores, advertising, or partnering with local guides, are no longer as effective. Especially among younger generations, who prefer to seek travel services online rather than rely on local agencies. While older customers might still trust local agencies, younger travelers depend heavily on online reviews and guides, marginalizing agencies that do not operate on these platforms.

Price Wars and the "Platform Effect"

According to an EqualOcean analyst, who interviewed high-level executives from anonymous local tour operators, it was revealed that while a ground operator might charge RMB 7,800 for a service, Trip could sell it for as much as RMB 14,880, reaping substantial profits. Ultimately, customers attribute the positive experience to Trip, not the actual service providers. Trip's branding gives consumers the impression that the platform acts as a "large global ground operator," further cementing its market position.

Many customers choose OTAs like Trip because they doubt the reliability of independent travel agencies and find it difficult to defend their rights. In contrast, the customer service and review system provided by the platform offers a greater sense of security. Although local tourism regulatory bodies exist, many customers believe that Trip has more leverage over travel agencies. For example, a family booked a hotel room through Trip, enjoyed their stay, but then requested a refund upon checkout. Trip unconditionally supported the customer’s refund request, despite the loss this caused the merchant.

Price Discrimination – Trip’s Long-Standing Controversy

The trip has long been criticized for price discrimination practices, commonly referred to as "killing the loyal customers" ("杀熟"). In recent years, Trip has faced a barrage of negative reviews and complaints. On the Black Cat Complaint platform, a search for the keyword “Trip” reveals as many as 93,129 complaints, with more than 78,900 specifically targeting Trip's travel services. These complaints come from a wide range of user groups, highlighting trust and service issues that Trip faces in its domestic market.

The Black Cat complaint (和猫投诉)  has nearly 90,000 complaints about the Trip

Source: Black Cat Complaint

These negative reviews primarily focus on issues such as poor customer service, hidden fees, and problems with booking cancellations. Many users reported technical difficulties when booking flights or hotels, or discovered that prices were not transparent, with hidden fees driving the final price higher. Furthermore, Trip’s slow response and poor communication when handling customer complaints have further intensified user dissatisfaction. This has led to widespread negative word-of-mouth, particularly on online platforms such as Black Cat Complaint, Weibo, and WeChat.

"The same flight: On August 29, it was priced on the app, but by September 3, the price had already increased by 1,400 yuan. I’m used to it now; five of us bought flight tickets together, but after the payment, the price immediately dropped by 1,000 yuan per ticket. When communicating with Air China, they said that compensation would be provided if the tickets were purchased through their app, but not through third-party platforms like Trip.”

— Negative feedback on Black Cat Complaint about Trip

According to official records, Trip's earliest “price discrimination” scandal dates back to 2020. At that time, a traveler, Ms. Hu, booked a hotel through Trip’s app, paying 2,889 yuan. However, upon checking out, she discovered that the hotel’s official price was only 1,377.63 yuan. Ms. Hu believed she had been targeted by Trip’s “price discrimination” practice. After negotiations, Trip only agreed to refund part of the price difference.

Subsequently, Ms. Hu sued Trip, claiming that the app had collected unnecessary personal information and used it to implement big data-driven price discrimination. She requested a refund of three times the overcharged amount. Eventually, the court ruled that Trip had engaged in false advertising, price fraud, and deceptive behavior, and ordered Trip to compensate Ms. Hu with 4,777.48 yuan.

Even four years after this case, complaints about Trip's price discrimination continue to surface on social media. Why does Trip turn a blind eye to such criticisms? From a business model perspective, if “price discrimination” or poor customer service were serious issues, it could affect Trip’s profits and expansion. However, the stability of its business model has helped Trip maintain growth despite these controversies.

From Domestic to International "Price Discrimination"

Trip's price discrimination practices are not limited to the domestic market; overseas users are subjected to the same treatment. As the saying goes, “killing loyal customers all over the world.”

"I booked a flight to Vancouver, but when I went to check in, I discovered that the actual destination was Abbotsford."

— Negative feedback from a Trustpilot user regarding Trip

Trip has become the preferred platform for overseas users visiting China, offering services such as visa processing guides, hotel and attraction recommendations, mobile payment and communication options, and booking transportation and dining. However, during our review of international third-party platforms, EqualOcean found plenty of negative reviews from overseas users. For example, users reported many hidden fees during bookings, causing the final price to be much higher than expected. Others complained about the difficulty of getting refunds after cancellations, even when the hotel or airline allowed refunds. Trip’s policies often resulted in significant losses for customers. Some users also found that after booking, the selected hotels or flights were unavailable, forcing them to accept lower-quality or more expensive alternatives.

Why do overseas users persist in using Trip despite knowing about its price discrimination?

EqualOcean analysts, after conducting interviews with over a dozen European and American users visiting China, found that Trip provides clear and straightforward entry tips for international users. Thanks to its acquisition of Skyscanner, Trip also highlights low-price advantages abroad. However, many overseas users said they encountered problems like drastic price fluctuations or being denied service when arriving at the booked location.

Despite facing a massive market overseas, Trip undoubtedly plays a key role in global tourism. Yet, its repeated scandals of “price discrimination” cast a shadow of concern. In the booming travel market, platforms like Trip need to shoulder greater responsibility to maintain a positive industry image, something that they urgently need to address.

Trip's Overseas Expansion: Still a Long Road Ahead

This article serves as the first in EqualOcean's series on "Global Benchmark Enterprises: Trip (1)." In future installments, we will dive deeper into the stories behind Trip’s global expansion and more insights into its business strategies.

In 2024, China’s easing of entry policies has spurred a boom in inbound tourism, pushing Trip's inbound travel bookings to nearly double year-on-year in the first half of the year. Inbound travel accounted for 25% of Trip’s overseas platform revenue, while its overseas businesses in Southeast Asia, Japan, Korea, Europe, and the U.S. saw a 70% year-on-year revenue increase in the second quarter. Despite these impressive numbers, Trip’s overseas expansion still has a long road ahead.

Brand awareness ranking of the most well-known travel portals in the United States by 2023

Market share of major online travel agents (OTAs) in the hospitality industry in Europe by 2023

The Trip has a low brand name in Europe and is not even a well-known travel portal in the United States

Source: EqualOcean Analysis

Although Trip has shown remarkable growth overseas, it still faces challenges in brand recognition. In Europe, its brand presence is low, and in the U.S., it is not even considered a leading travel portal.

"I booked a flight from Miami to Cartagena. For two weeks, I’ve been trying to change the flight, but the website simply doesn’t allow it. So, I requested a refund. Avianca confirmed that the refund was processed yesterday, but I still haven’t received my money. This is the worst scam website I’ve ever encountered. I am incredibly dissatisfied and disappointed. I just want my money back! Even customer service promised a refund, but it has never been fulfilled."

— Negative feedback from a Trustpilot user regarding Trip

As China’s flagship OTA, Trip has become symbolic of the domestic travel service industry. However, it faces an overwhelming amount of negative reviews in international markets, often being labeled a “scam website” or accused of “bait and switch” practices. These image problems stem from issues such as hidden fees, misleading discounts, and false information, leaving users feeling deceived. These poor experiences not only damage consumer trust but also spread rapidly on social media and travel communities, further eroding Trip’s reputation.

The discrepancy between service standards and customer support between the domestic and overseas markets exacerbates dissatisfaction among international users when issues arise. Over time, this has evolved into a widely held perception in international markets, with many users viewing platforms like Trip as untrustworthy and avoiding them altogether.

To reverse this situation, Trip must enhance communication with overseas markets, improve service quality, and increase transparency in pricing and policies to rebuild trust and establish a more positive international brand image.