Tuniu Tumbles on Report Chinese Travel Agencies Boycott WebsiteBelinda Cao
Tuniu Corp. fell the most in three weeks in New York amid reports that pricing disputes have prompted a group of 17 Chinese travel agencies to boycott the company’s booking website.
The American depositary receipts slid 4.7 percent to $15.84 on Thursday. Trading volume of 1 million shares was more than triple the daily average of the past three months. It was the worst performer in a Bloomberg gauge of U.S.-traded Chinese stocks, which gained 0.8 percent.
The travel agencies including Beijing UTour International Travel Service Co. said they will stop offering services through Tuniu’s website starting July 15 because of disagreements over pricing, the online news portal iFeng.com reported, citing their joint statement. The conflict comes as Chinese travel websites seek to expand sales by adding more providers to their platforms, which is increasing price competition and crimping profits at some of the larger ones.
“It may have a negative impact on revenue in the short term,” Tian X. Hou, the founder of research firm T.H. Capital LLC, said by phone from New York Thursday. “In the long run, this will remain an issue for the industry amid the fast growth of China’s tourism industry. Offline travel agencies are not benefiting as much as the online booking sites.”
Thursday’s drop reduced Tuniu’s gain since its U.S. debut in May to 76 percent. Ctrip.com International Ltd., a larger competitor, dropped 0.8 percent to $65.62, while Qunar Cayman Islands Ltd. slid 2.3 percent to $48.16.
Tuniu has removed from its website all offerings by Beijing UTour after the agency “unilaterally” ended their cooperation, according to the report from iFeng.com, which is owned by Phoenix New Media Ltd. The People’s Daily’s website and Sina.com published similar stories.
Nanjing, China-based Tuniu has more than 6,000 partners and a halt in the cooperation with any supplier “won’t have a significant impact” on its development, it said in a statement posted on its microblog regarding its removal of UTour’s offerings.
UTour accounted for 3 percent of Tuniu’s revenue in 2014, and the percentage will be lower this year, 86Research Ltd. said in an e-mailed note to clients Thursday.
The Bloomberg China-US Equity Index rose to a record 129.58. E-House China Holdings Ltd., an online real estate brokerage, surged 13 percent in the largest gain in five months. The iShares China Large-Cap ETF, which tracks Hong Kong-listed companies, slumped 1 percent to $51.85 in its first decline this week.