Expedia invests in eLong to grow China presence

Expedia has strengthened its ties in China by increasing its investment in Beijing-based online travel firm eLong. China’s largest provider of internet, mobile and telecommunications services, Tencent Holdings, has also invested in the company.

Expedia has paid $41.2 million to raise its majority shareholding in eLong to 56% while Tencent has made its first “significant” move into the travel sector by acquiring 16% of the business for $84.4 million.

The two Chinese companies plan to form a business partnership to develop online travel products and distribute eLong’s hotels to Tencent’s 674 million online community users in China.

eLong’s portfolio covers more than 150,000 hotels worldwide, including more than 19,000 in China, and over 130,000 internationally through a connection with Expedia.

Expedia president and chief executive Dara Khosrowshahi said: “The online travel market in China is expected to double by 2012 from 2009 levels, and the growth opportunity there makes it a key geographical area for us from a strategic perspective.

“Aligning ourselves with the online industry leader in China and increasing our own investment in eLong strengthens our position in this critical market and will allow eLong to strengthen its outstanding online hotel services and provide air and hotel products to more and more customers in China.”

Guangfu Cui, chief executive of eLong, said: “Given Tencent’s user base and its reach across multiple platforms, including portal, mobile, instant messaging and social networking, we believe consumers throughout China will benefit from this partnership, while eLong and Expedia supply partners will enjoy significant new access to internet traffic and young customers in China.”

Tencent president Martin Lau Chi-ping added: “We believe this partnership will bring our users innovative and quality services that combine our community leadership and marketing know-how with eLong’s online travel expertise and unmatched supply portfolio.

“Through the implementation of open platform, we will continue to enhance our service offering to users by exploring the synergies between their online activities and offline lifestyle.”

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