The long thesis is that the most of the spending will be behind us and that Ctrip's acquisition of a large stake in a competitor will improve pricing power
Ctrip.com International Ltd. surged to a record after it purchased a 38 percent stake in Elong Inc., improving the outlook for pricing and profits in China’s increasingly competitive online travel-booking industry.
Ctrip Rallies as Elong Purchase Cools Chinese Travel Competition - Bloomberg Business
However, there is a new competitive threat looming:
Alitrip, essentially the combination of Alibaba's (BABA) Taobao and Tmall travel sections, debuted last October. It allows consumers to book travel, reserve taxis and even apply for travel visas. The brand is "more bark than bite" for now, said Olson, and hasn't made much of a dent in Ctrip's lead. But, he warned, "You need to be cautious when such a large and well-resourced competitor is getting into the space. Alibaba's travel arm has a smaller market share in terms of bookings, but it has a trusted online payment platform and a wide consumer reach, Rauch also cautioned. "It signals a more serious entrance of an Internet giant in China," she said. "The potential is huge."
Ctrip May Tighten Grip On China Boom After Taking Stake In Rival Site eLong - Yahoo Finance