Chinese online travel service company Ctrip.com International Ltd reported a sharp increase in revenues throughout 2003, owing to the rising enthusiasm to travel among Chinese people and higher usage of the Internet for travel services.

Ctrip said in its financial report yesterday that its revenues in the fourth quarter grew by 22 percent quarter-on-quarter and 116 percent year-on-year to US$8.1 million in the past quarter.

Its annual revenues reached US$20.9 million in 2003, with a 73 percent increase.

"It has been a great year for Ctrip," said James Liang, chairman and chief executive officer with the Chinese company, which issued its US depository shares on the NASDAQ stock market in New York in December.

He said during a telephone conference yesterday that Ctrip's profits in the fourth quarter also tripled over the same time the previous year and had grown by 20 percent to US$3 million, or 11 US cents per diluted share.

Its full-year profits stood at US$6.5 million by the end of December.

The company said its hotel reservation service revenues rose by 19 percent quarter on quarter in the fourth quarter to US$7 million, while its air ticket booking revenues totaled US$1.1 million, growing 27 percent over the third quarter.

According to consulting firm Shanghai iResearch Co Ltd, China's online travel service market almost doubled in 2003 to 500 million yuan (US$60 million) from the previous year, which is expected to grow 62 percent to 810 million yuan (US$98 million) this year.

Michael Yin, an analyst with iResearch, pointed out that increasing recognition of the Internet as a means to reserve rooms and buy tickets is a major factor behind Ctrip's growth.

"Its focus on travel service also helped it win more customers," he said.

Ctrip also spent considerable effort in its promotion of travel packages, through which individuals do not need to join a tour group and have more freedom in travel by reserving hotel rooms and air tickets on the Internet by themselves.

Ctrip stock prices fell more than 13 percent in after-hour trading to US$28.28 on the NASDAQ index after the announcement, mainly due to its lower forecasts on its first quarter performance.

The company predicted its revenues will be US$6.6-6.8 million this quarter and profits will be between US$1.8 million and US$1.9 million.

Ctrip President and Chief Financial Officer Neil Shen explained the forecasts were "very conservative," as the first quarter is usually the weakest season for a Chinese company. During that period, business people stop traveling during the Chinese Lunar New Year.

He added that his company already saw some signs of strong growth in the quarter, such as a significant increase of the number of Internet users, who visited Ctrip's website.

The company also said it would explore new marketing channels like telemarketing and joint marketing with banks or insurance companies.

(China Daily February 25, 2004)