Online travel wars: China’s Tuniu takes a shot at LY.com

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When it comes to online travel, China is different. Chinese tourists, by and large, don’t like forging their own path, preferring instead to travel in tour groups with carefully-planned itineraries and Chinese-speaking tour guides every step of the way. The country’s online travel marketplaces have grown to accommodate this, so where a Western online travel site mostly offers deals on flights and hotels, Chinese sites offer deals on full tour-guide-led trips.

But of course, this means that instead of just working with airlines and hotels, China’s travel sites also need to work with the country’s many travel agencies – the companies that coordinate and operate those group trips. That means that in a price war, things can get ugly, and that’s apparently what’s happening now. Techweb is reporting that according to several travel agencies, Chinese travel site Tuniu is demanding that all of its partner agencies give it lower prices than they give to LY.com, a rival online travel site. Some travel agencies have even reportedly been told that they must pick one or the other, and can no longer continue to offer trips through both sites.

Techweb reports that insiders have said that part of the problem is that LY.com is selling off some of its inventory at below cost just to get rid of it, which makes it difficult for others to compete on price. Tuniu has said it “strongly suggests” that its partners not work with LY.com, and this latest news suggests that it may be willing to shut out any travel agencies that won’t comply with that “suggestion.”

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