Leading Australian corporate travel provider Corporate Travel Management has announced further advances into China with a strategic joint venture with one of the country’s fastest growing e-commerce companies, World 99.
The joint venture will see CTM subsidiary Westminster CTM Limited and outbound travel company World 99*, funded by UTour**, establish 99 Westminster e-commerce Company Ltd, which will have distribution rights for CTM’s products outside of China.
CTM founder and Managing Director Jamie Pherous said the company had developed an intimate understanding of the unique requirements of Chinese travellers via the 2014 acquisition of Asian travel company Westminster CTM.
“The joint venture will enable a travel solution that more suitably caters to the cultural, language and service expectations of the Chinese consumer within China and abroad,” Mr Pherous said.
“It allows World 99 to rapidly open up key overseas markets outside of China and create a global market place for Chinese travellers by leveraging CTM’s one contact point across our offices in the Asia Pacific, Europe and the USA.
“The alliance also leverages the enormous technical and operational experience, customer base and product diversity that both UTour and World99 possess”, said Mr Pherous.
The joint venture requires minimal additional capital, leveraging CTM’s current technology, relationships and processing platform.
“We are delighted to be working with such great Chinese travel companies. World 99 has experienced tremendous growth in a short period and is poised to continue its trajectory,” Mr Pherous added.
World99 is focused on the FIT market – Chinese free independent travellers – globally, and since founding in April 2014 is now servicing more than 80,000 customers and transacting RMB250m (AUD50.4m) a month.
“We have been clear that, above all, acquisitions and partnerships must be the right fit for our business,” Mr Pherous said.
* World99 (Beijing) Electronic Commerce Co. Ltd
** Beijing UTour International Travel Service Co Ltd.
“World99 leverages its proprietary technology to integrate the fragmented resources of global suppliers for Chinese consumers.”
The companies have been operating under the terms of the joint venture since late in the third quarter of this financial year, and last month alone Westminster CTM issued more than 50,000 tickets for this venture.
CTM now expects full year underlying EBITDA to be slightly above the top end of the previous guidance range of $46m-$48m.
Mr Pherous said the earnings upgrade reflected the business’ strong ongoing performance across all regions, together with a strategic move into the world’s most populous country.