The latest tourism consumption statistics show that the just-concluded National Day Golden Week was another carnival for the travel industry.
Around this long holiday, several major industry news items have particularly caught attention. On September 28, Alibaba Group announced a RMB 2.81 billion investment in hotel information service provider Shiji Information, acquiring a 15% stake upon completion of the deal. In the future, Shiji Information’s systems will be fully integrated with Taobao Travel, expanding Alibaba Group’s foundational service capabilities in the online travel market. Coincidentally, at the end of September, industry insiders revealed that JD.com, following its acquisition of a well-known hotel booking app earlier in the year, is now very likely secretly acquiring the HUBS1 Huitong Tianxia hotel SaaS system. JD.com intends to leverage HUBS1’s professional SaaS central reservation system to build its own "inventory and logistics" management system for travel O2O, replicating JD’s successful model in the travel O2O market.
The key focus of the future in-depth collaboration between Alibaba’s “Taobao Travel” and Shiji Information lies in the hotel information system sector, including direct hotel system connections, development of post-payment booking products, integration with member service platforms, and scan-to-pay bill services. Shiji Information will integrate its hotel information management system with Taobao Travel’s management system to facilitate better e-commerce operations for Shiji’s hotel clients. Additionally, Shiji will provide technical support for the integration of hotel group systems with Taobao Travel’s management system, and will jointly develop an inn management system with Taobao Travel, connecting the backend store system of the Taobao Travel platform to enhance the informatization level and e-commerce service capabilities of the inn industry. All of these are “infrastructure” collaborations for the online travel industry based on SaaS big data. Once their effects become evident, they will significantly impact the current landscape of the online travel market.
While OTAs are forming alliances and competing fiercely, travel SaaS platforms are attracting increasing attention. The biggest difference between a “SaaS big data central reservation system” and existing OTAs is that it acts as a “pathway” rather than a “node,” emphasizing “collaboration” over “control.” In the intense and even brutal competition among OTAs, the ultimate goal is to leverage their vast terminal customer resources and purchasing power to exert control over upstream travel resources (such as hotels). For example, Ctrip continuously demands higher commission rates and more inventory from hotels, while Qunar has raised its ad click prices on its website multiple times within a year. As a result, the interests of upstream travel resource providers (like hotels) are squeezed incessantly. On the other hand, when resources and channels are controlled by just a few major OTAs, terminal consumers ultimately lose more choices in the long run. All of this affects the healthy cycle of the entire travel industry. Under such a market structure, SaaS big data platforms must and will increasingly become a crucial supporting force for the healthy development of the industry.
Using big data to improve hotel management and optimize pricing through big data and revenue management can better match supply with demand for both upstream hotels and downstream consumers. This is a major trend in the international tourism industry. JD.com, as a flagship company in China’s e-commerce sector, has long had its eye on the online travel market. Its successful Nasdaq listing in May, with a market value exceeding $30 billion, gives JD.com the confidence to make a strong push into the travel O2O market. HUBS1 Huitong Tianxia possesses a leading domestic SaaS big data central reservation system for hotels, and has real-world cases of using big data to help merchants optimize revenue management. In 2007 and 2010, it became the official and sole hotel booking provider for the Shanghai Special Olympics and the Shanghai Expo, respectively; in 2010, it was the sole CRS (Central Reservation System) provider for Jinjiang Group, Asia’s largest hotel brand conglomerate. Over the past few years, HUBS1 has accumulated extensive experience in product packaging, integration, and distribution across various hotel products such as pay-now, prepaid, packages, last-room availability, and various promotions. Furthermore, regarding downstream channel connectivity, it has successfully implemented technical integrations and business operations with different types of channels such as Ctrip, Qunar, Taobao, and various banks. These efforts and accumulations are exactly what JD.com needs for its bold foray into the travel O2O market.
Through SaaS big data feedback to hotel revenue management systems, revenue managers can directly push optimal prices to various travel distribution platforms via the HUBS1 system. For the travel and hotel industry, which lacks physical inventory and logistics delivery, such a SaaS system is akin to the industry-leading inventory and logistics management system that JD.com has long been building.
A similar “SaaS big data platform” business model also exists and has achieved some success in other e-commerce sectors. For example, Edbao, a professional solutions provider in China’s e-commerce ERP field, officially established a partnership with Taobao in 2008. In 2010, it connected with JD Mall, Amazon, Dangdang, and QQ Mall by completing API integration. In 2012, it successfully interfaced with Yougou, Youle, and QQ Online Shopping. In 2013, it connected with Kuba, Tpin.com, ShowJoy.com, Qutianmai.com, China’s No.1 Department Store, Jumei Youpin, Meituan, and the Construction Bank. As a big data platform for e-commerce, Edbao provides various product solutions for e-commerce businesses in sectors such as apparel, footwear, 3C electronics, cosmetics, home textiles, food, and bags, tailored to different stages of development. Data shows that during last year’s Taobao Singles’ Day, over 10% of the transaction data processed was handled by Edbao.
In recent years, the rapidly growing online travel market has attracted widespread interest. The two giants, Alibaba and JD.com, both aim to invest in the big data infrastructure systems of online travel, intending to establish comprehensive layouts, dig deep roots, secure stable resources, and connect both upstream and downstream for a full-scale push. This will undoubtedly bring revolutionary changes to China’s online travel distribution industry. How will OTAs represented by Ctrip and Qunar respond? Will the battle among the major players bring more “benefits” to consumers? This remains a matter worth ongoing attention.