China’s travel industry upended by ticket scams

Passenger complaints about scams among travel operators selling airline tickets on the Internet are upending China’s travel industry and likely to bring about significant changes.

OTACtrip.com International, the country’s largest online travel agency, has been exposed for a series of unscrupulous actions, according to an expose in Chinese news site Caixin.

In January, travel writer Li Miao posted a series of articles on the popular messaging app WeChat describing problems he had with Ctrip.com. Li said he bought two flight tickets for a trip from Beijing to Tokyo. But when he got to the airport, they weren’t accepted because the tickets were fake and the booking had never been completed.

Another traveler Fu Jingnan publicized his bad Ctrip experience by announcing it on Weibo, China’s version of Twitter. After buying a ticket he was denied a boarding pass by Japan Airlines at Haneda airport in Tokyo. It appears the travel operator used a shady technique to get the ticket at discount. He redeemed frequent flier miles from another passenger flouting airline rules.

Ctrip blamed third-party agents operating on its platform and did offer Fu and Li a refund and compensation.

Still, by posting their complaints to social media, the travelers were able to garner the attention of the China Consumer Association, a semi-governmental organization that monitors consumer rights issues. The agency has begun looking into other complaints linked to the sale of flight tickets at not just Ctrip but the other major online travel websites such as Qunar, Tuniu and Alitrip. They discovered problems with two out of every 10,000 flight tickets sold on Ctrip.com.

In addition to passengers now avoiding the travel firms, news of the scams have gotten the attention of the airline companies. Consumer complaints on unexplained extra charges and problems with refunds have led the four top domestic carriers in terms of passengers per year to stop selling tickets on Qunar.com, the second largest online travel agency in the country.

The National Statistics Bureau says China’s air travel market tripled in size from 2000 2015, with 400 million trips made by plane last year. Three-quarters of the tickets sold in 2015, were handled online, according to data from E-travel Center, a tourism industry information provider.

Out of all that Ctrip had 26% of the market and Qunar came in second, with just under 25%, E-travel Center said. Only 11% of the tickets were purchased via the official websites of airlines in 2015.

In light of the complaints, analysts told Caixin they expect a reshuffling in the industry. They predict the total number of agents will decline as smaller players are forced out of the market or merge with bigger outfits. In addition, this will lead to the airlines selling a higher percentage of their own tickets directly to consumers.



Categories: Asia Unhedged, China

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