Bottom line: Qunar could experience some short-term loss of business due to the withdrawal of Home Inns properties from its site, and its open platform business model makes it prone to such problems.
Signs of turmoil are coming from the lodge operated by Qunar (Nasdaq: QUNR), with word that the online travel agent has just lost a major customer with the abrupt departure of leading budget hotel chain Home Inns (Nasdaq: HMIN). The departure of such a major customer, if true, would mark a big blow to Qunar, which had a recent similar break-up with chief rival Ctrip (Nasdaq: CTRP). Home Inns’ decision is motivated by different reasons than Ctrip’s, which I’ll explain shortly. But the 2 spats highlight the fact that Qunar’s business model, which centers on an open platform for third-party travel agents, is far more prone to problems than traditional travel sites that directly sell products like hotel rooms and air tickets to consumers. Read Full Post…
China’s hotel operators have been suffering from an “Expo hangover” for much of this year, as room prices dip sharply in the key Shanghai market after business returned to more normal from inflated levels during the city’s 6-month-long mega-event in 2010. Most were expecting the hangover to start easing in the fourth quarter of this year as the Expo effect faded, though early signals from 7 Days (NYSE: SVN), the first operator to report third-quarter results, seem to indicate the headache could continue a while longer. The company, based in Guangzhou and therefore less exposed to the Expo effect than peers like Shanghai-based Home Inns (Nasdaq: HMIN), saw its third-quarter total net revenue jump 33 percent year-on-year, even as its profit dipped 26 percent on lower occupancy and room rates and higher expenses. (
