CTRP » Topics » Major Factors Affecting the Travel Industry

This excerpt taken from the CTRP 20-F filed Apr 29, 2008.

Major Factors Affecting the Travel Industry

A variety of factors affect the travel industry in China, and hence our results of operations and financial condition, including:

Growth in the Overall Economy and Demand for Travel Services in China. We expect that our financial results will continue to be affected by the overall growth of the economy and demand for travel services in China and the rest of the world. According to the statistical report published on the website of National Bureau of Statistics of China on February 28, 2008, the gross domestic product, or GDP, of China grew from RMB13.6 trillion (US$1.7 trillion) in 2003 to RMB24.7 trillion (US$3.4 trillion) in 2007, representing a compound annual growth rate of 16%. GDP per capita in the same period rose from RMB10,542 (US$1,273) to RMB18,665 (US$2,559), representing a 15% compound annual growth rate. This growth led to a significant increase in the demand for travel services.

According to the statistical report published on the website of National Bureau of Statistics of China on February 28, 2008, domestic tourism spending grew from RMB344.2 billion (US$41.6 billion) in 2003 to RMB777.1 billion (US$106.5 billion) in 2007, representing a compound annual growth of 23%. We anticipate that demand for travel services in China will continue to increase in the foreseeable future as the economy in China continues to grow. However, any adverse changes in economic conditions of China and the rest of the world, such as a slow-down of the Chinese economy, could have a material and adverse effect on the travel industry in China, which in turn would harm our business.

 

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Seasonality in the Travel Service Industry. The travel service industry is characterized by seasonal fluctuations and accordingly our revenues may vary from quarter to quarter. To date, the revenues generated during the summer season of each year generally are higher than those generated during the winter season, mainly because the summer season coincides with the peak business and leisure travel season, while the winter season of each year includes the Chinese New Year holiday, during which our customers reduce their business activities. These seasonality trends are difficult to discern in our historical results because our revenues have grown substantially since inception. However, our future results may be affected by seasonal fluctuations in the use of our services by our customers.

Disruptions in the Travel Industry. Individual travelers tend to modify their travel plans based on the occurrence of events such as:

 

   

the outbreak of avian influenza, severe acute respiratory syndrome, or SARs, or any other serious contagious diseases;

 

   

increased prices in the hotel, airline or other travel-related industries.

 

   

increased occurrence of travel-related accidents;

 

   

natural disasters or poor weather conditions;

 

   

terrorist attacks or threats of terrorist attacks or war; and

 

   

general economic downturns.

During the period from March 2003 through June 2003, the economies of several countries in Asia, including China, were severely affected by the outbreak of SARS. Our business and our operating results during that period were also adversely affected. From time to time, there have been reports on the occurrences of avian flu in various parts of China, including a few confirmed human cases and deaths. If there is a recurrence of an outbreak of SARS or any similar outbreak of other contagious diseases such as avian flu, it may adversely affect the travel industry and has a material and adverse effect on our business and operating results.

This excerpt taken from the CTRP 20-F filed Apr 12, 2007.

Major Factors Affecting the Travel Industry

A variety of factors affect the travel industry in China, and hence our results of operations and financial condition, including:

Growth in the Overall Economy and Demand for Travel Services in China. We expect that our financial results will continue to be affected by the overall growth of the economy and demand for travel services in China. According to the statistical report published on the website of National Bureau of Statistics of China on February 28, 2007, the gross domestic product, or GDP, of China grew from RMB12.0 trillion (US$1.5 trillion) in 2002 to RMB20.9 trillion (US$2.7 trillion) in 2006, representing a compound annual growth rate of 15%. GDP per capita in the same period rose from RMB9,398 (US$1,135) to RMB15,973 (US$2,047), representing a 14% compound annual growth rate. This growth led to a significant increase in the demand for travel services. According to the statistical report published on the website of National Bureau of Statistics of China on February 28, 2007, domestic tourism spending grew from RMB387.8 billion (US$46.9 billion) in 2002 to RMB623.0 billion (US$79.8 billion) in 2006, representing a compound annual growth of 13%. We anticipate that demand for travel services in China will continue to increase in the foreseeable future as the economy in China continues to grow. However, any adverse changes in economic conditions of China, such as a slow-down of the Chinese economy, could have a material and adverse effect on the travel industry in China, which in turn would harm our business.

Seasonality in the Travel Service Industry. The travel service industry is characterized by seasonal fluctuations and accordingly our revenues may vary from quarter to quarter. To date, the revenues generated during the summer season of each year generally are higher than those generated during the winter season, mainly because the summer season coincides with the peak business and leisure travel season, while the winter season of each year includes the Chinese New Year holiday, during which our customers reduce their business activities. These seasonality trends are difficult to discern in our historical results because our revenues have grown substantially since inception. However, our future results may be affected by seasonal fluctuations in the use of our services by our customers.

Disruptions in the Travel Industry. Individual travelers tend to modify their travel plans based on the occurrence of events such as:

 

   

the outbreak of serious epidemics;

 

   

travel-related accidents;

 

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bad weather;

 

   

natural disasters;

 

   

threats of war or incidents of terrorism;

 

   

general economic downturns; and

 

   

increased prices in the hotel, airline or other travel-related industries.

During the period from March 2003 through June 2003, the economies of several countries in Asia, including China, were severely affected by the outbreak of SARS. Our business and our operating results during that period were also adversely affected. From time to time, there have been reports on the occurrences of avian flu in various parts of China, including a few confirmed human cases and deaths. If there is a recurrence of an outbreak of SARS or any similar outbreak of other contagious diseases such as avian flu, it may adversely affect the travel industry and has a material and adverse effect on our business and operating results.

This excerpt taken from the CTRP 20-F filed Jun 26, 2006.

Major Factors Affecting the Travel Industry

A variety of factors affect the travel industry in China, and hence our results of operations and financial condition, including:

Growth in the Overall Economy and Demand for Travel Services in China. We expect that our financial results will continue to be affected by the overall growth of the economy and demand for travel services in China. According to the 2005 China Statistical Yearbook and the 2005 National Economic and Social Development Statistical Communiqué published by the National Bureau of Statistics published on February 28, 2006, the gross domestic product, or GDP, of China grew from RMB11.0 trillion (US$1.3 trillion) in 2001 to RMB18.2 trillion (US$2.3 trillion) in 2005, representing a compound annual growth rate of 13.4%. GDP per capita in the same period rose from RMB8,676 (US$1,048) to RMB13,985 (US$1,733), representing a 12.7% compound annual growth rate. This growth led to a significant increase in the demand for travel services. According to the 2005 China Statistical Yearbook and the 2005 National Economic and Social Development Statistical Communiqué published by the National Bureau of Statistics published on February 28, 2006, domestic tourism spending grew from RMB352.2 billion (US$42.5 billion) in 2001 to RMB528.6 billion (US$65.5 billion) in 2005, representing a compound annual growth of 10.7%. We anticipate that demand for travel services in China will continue to increase in the foreseeable future as the economy in China continues to grow. However, any adverse changes in economic conditions of China, such as a slow-down of the Chinese economy, could have a material and adverse effect on the travel industry in China, which in turn would harm our business.

 

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Seasonality in the Travel Service Industry. The travel service industry is characterized by seasonal fluctuations and accordingly our revenues may vary from quarter to quarter. To date, the revenues generated during the summer season of each year generally are higher than those generated during the winter season, mainly because the summer season coincides with the peak business and leisure travel season, while the winter season of each year includes the Chinese New Year holiday, during which our customers reduce their business activities. These seasonality trends are difficult to discern in our historical results because our revenues have grown substantially since inception. However, our future results may be affected by seasonal fluctuations in the use of our services by our customers.

Disruptions in the Travel Industry. Individual travelers tend to modify their travel plans based on the occurrence of events such as:

 

    the outbreak of serious epidemics;

 

    travel-related accidents;

 

    bad weather;

 

    natural disasters;

 

    threats of war or incidents of terrorism;

 

    general economic downturns; and

 

    increased prices in the hotel, airline or other travel-related industries.

During the period from March 2003 through June 2003, the economies of several countries in Asia, including China, were severely affected by the outbreak of SARS. Our business and our operating results during that period were also adversely affected. Since 2005 there have been reports on the occurrences of avian flu in various parts of China, including a few confirmed human cases. If there is a recurrence of an outbreak of SARS or any similar outbreak of other contagious diseases such as avian flu, it may adversely affect the travel industry and has a material and adverse effect on our business and operating results.

This excerpt taken from the CTRP 20-F filed Jun 22, 2005.

Major Factors Affecting the Travel Industry

 

A variety of factors affect the travel industry in China, and hence our results of operations and financial condition, including:

 

Growth in the Overall Economy and Demand for Travel Services in China. We expect that our financial results will continue to be affected by the overall growth of the economy and demand for travel services in China. According to the 2004 China Statistical Yearbook and the 2004 National Economic and Social Development Statistical Communiqué published by the National Bureau of Statistics, the gross domestic product, or GDP, of China grew from RMB8.9 trillion (US$1.1 trillion) in 2000 to RMB13.7 trillion (US$1.7 trillion) in 2004, representing a compound annual growth rate of 11.4%. GDP per capita in the same period rose from RMB7,086 (US$856) to RMB10,561 (US$1,276), representing a 10.5% compound annual growth rate. This growth led to a significant increase in the demand for travel services. According to the 2004 China Statistical Yearbook and the 2004 National Economic and Social Development Statistical Communiqué published by the National Bureau of Statistics, domestic tourism spending grew from RMB317.5 billion (US$38.4 billion) in 2000 to RMB471.1 billion (US$56.9 billion) in 2004, representing a compound annual growth of 10.4%. We anticipate that demand for travel services in China will continue to increase substantially in the foreseeable future as the economy in China continues to grow.

 

Seasonality in the Travel Service Industry. The travel service industry is characterized by seasonal fluctuations and accordingly our revenues may vary from quarter to quarter. To date, the third quarter of each year generally contributes the highest portion of our total revenues for the year, mainly because it coincides with the peak business and leisure travel season. The first quarter of each year generally contributes the smallest portion of our total revenues for the year due to reduced business activity during the Chinese New Year holiday. These seasonality trends are difficult to discern in our historical results because our revenues have grown substantially since inception. However, our future results may be affected by seasonal fluctuations in the use of our services by our customers.

 

Disruptions in the Travel Industry. Individual travelers tend to modify their travel plans based on the occurrence of events such as:

 

    the outbreak of serious epidemics;

 

    travel-related accidents;

 

    bad weather;

 

    natural disasters;

 

    threats of war or incidents of terrorism;

 

    general economic downturns; and

 

    increased prices in the hotel, airline or other travel-related industries.

 

During the period from March 2003 through June 2003, the economies of several countries in Asia, including China, were severely affected by the outbreak of SARS. Our business and our operating results during that period were also adversely affected.

 

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