Hoping to cash in on the growing cross-border tourism market, Ctrip.com and Shenzhen-listed Utour have entered into a 2.6 billion yuan ($397 million) share-swap deal, the companies said yesterday.
Utour issued a private placement of 2.6 billion yuan to investors including Ctrip and acquired a stake of Huayuan Tours, a subsidiary of Ctrip, which plans to increase its stake in Utour within 12 months, both firms said in statements yesterday.
Huayuan Tours focuses on outbound tourism, one of the hottest segments in the Chinese market thanks to improved consumption capacity and relaxed visa policies.
Outbound tourism is also a key part of Ctrip's business, accounting for 50 percent of its total volume, said Chief Executive James Liang, adding that the segment still has great untapped potential, as only 10 percent of Chinese people have passports.
China's economic transformation, which focuses on consumption, and rising purchasing power are expected to fuel the Chinese tourism market, industry insiders said.
Chinese tourists spent US$164.8 billion in 2014, a fourfold jump over 2008, according to the China Tourism Academy.
