While Ctrip.com reported today that its net revenues were 396 million yuan?for the fourth quarter of 2008, up 11% year-on-year, and gross margin was 77% for the fourth quarter of 2008, compared to 81% in the same period in 2007, the company's income from operations was 117 million yuan, down 8% year-on-year. Operating margin was 30% in the fourth quarter of 2008, compared to 36% during the same period in 2007. Net income dropped to 121 million yuan?in the fourth quarter of 2008, down 10% year-on-year.

"Despite the challenges in the travel industry in China, our team delivered a solid result in 2008. We strengthened our market leadership, enhanced our vendor relationship, elevated our customer service level, improved our operation efficiency, and achieved a steady revenue and earnings growth," said Min Fan, CEO of Ctrip. "In the near term, we remain cautious about the global economy. We will prudently manage our business and capitalize the opportunities ahead of us."

Though the last quarter of 2008 showed a worrisome trend, the year overall did have positive results, though perhaps not as high as investors had hoped. For the full year 2008, net revenues were 1.5 billion yuan in 2008, up 24% from 2007. Gross margin was 78% in 2008, compared to 80% in 2007, and net income was 444 million yuan?in 2008, up 11% from 2007. For the first quarter of 2009, Ctrip.com expects to continue the year-on-year net revenue growth at a rate of approximately 5-10%.

Hotel reservation revenues amounted to 211 million yuan for the fourth quarter of 2008, representing a 7% increase from the same period in 2007, driven by a 11% increase in hotel room reservation volume, which was partially offset by a decrease in commission per room. Hotel reservation revenues represented a 13% increase from the previous quarter, primarily due to increased hotel booking volume. For the full year ended December 31, 2008, hotel reservation revenues were 764 million yuan, a 13% increase from 2007. The hotel reservation revenues accounted for 48% of the total revenues in 2008, compared to 53% in 2007.

Air ticket booking revenues for the fourth quarter of 2008 were 166 million yuan, representing a 7% increase from the same period in 2007, driven by a 41% increase in air-ticketing sales volume, which was partially offset by a decrease in commission per ticket. Air-ticketing revenue for the fourth quarter of 2008 remained relatively the same as the previous quarter. For the full year ended December 31, 2008, air ticket booking revenues were 659 million yuan, a 31% increase from 2007. The air ticket booking revenues accounted for 42% of the total revenues in 2008, compared to 39% in 2007.

(China Hospitality News February 10, 2009)