Business, Internet

Internet Travel In China Looks Better For eLong.com

Chinese online travel firm eLong Inc. has reported its unaudited financial results for the third quarter ended September 30, 2009.

Total revenues increased 15% year-on-year to CNY103.2 million and net revenues increased 16% year-on-year to CNY97.2 million. Operating income in the third quarter was CNY5.9 million compared to operating loss of CNY19.9 million in the prior year period, driven primarily by decrease in sales and marketing expenses and increase in gross profit. Net income in the third quarter was CNY7.5 million compared to net loss of CNY15.5 million in the prior year period.

"The summer travel season turned out to be a strong one for eLong. We were pleased with the customer response to our first ever virtual coupon campaign, and are looking forward to providing many more money-saving and worry-free travel booking opportunities to our customers," said Guangfu Cui, CEO of eLong.

Hotel commissions increased 5% for the third quarter of 2009 compared to the prior year quarter, primarily due to higher volume, which was partially offset by lower commission per room night. Commission per room night decreased 7% year-on-year primarily due to lower average daily rates, primarily due to an increase in the proportion of volume from budget hotels, partially offset by an increase in hotel commission rates. Room nights booked through eLong in the third quarter increased 13% year-on-year to 1,183,000.

Air ticketing commissions increased 27% for the third quarter of 2009 compared to the prior year quarter, driven by a 24% increase in air segments to 604,000 and an increase in commission per segment. Commission per segment increased 2%, due to a 13% increase in average ticket price, partially offset by a decrease in air commission rates compared to the prior year quarter.

Gross margin in the third quarter of 2009 was 70% compared to 71% in the prior year quarter, primarily due to the higher growth of lower margin air revenue relative to hotel revenue. Total operating expenses decreased 22% for the third quarter of 2009 compared to the third quarter of 2008. Total operating expenses were 64% of net revenues, a decrease of 30 percentage points compared to the prior year quarter.

eLong currently expects net revenues for the fourth quarter of 2009 to be within the range of CNY90 million to CNY99 million, equal to an increase of 5% to 15% compared to the fourth quarter of 2008.

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