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eLong, Inc. (LONG)
Q3 2012 Earnings Call
November 16, 2012 8:00 PM ET
Echo Yan - Investor Relations
Michael Doyle – CFO
Guangfu Cui – CEO
Alicia Yap – Barclays
Fawne Jiang – BM Capital
Tian Hou – TH Capital
Mu Zhi Li – Citigroup
Jiong Shao – Macquarie
Chris Lai – Bank of America
Felix Hong – Goldman Sachs
Wendy Huang – CIMB
Previous Statements by LONG
» eLong's CEO Discusses Q2 2012 Results - Earnings Call Transcript
» eLong's CEO Discusses Q1 2012 Results - Earnings Call Transcript
» eLong's CEO Discusses Q4 2011 and Full Year 2011 Results - Earnings Call Transcript
Hello everyone, thank you for joining eLong’s third quarter 2012 conference call.
Today, Guangfu Cui, our CEO, will make some remarks about the company’s performance in the third quarter 2012 followed by Mike Doyle, our CFO, who will provide additional detail on our financial results. Following their prepared remarks, Guangfu and Mike will be available to take your questions.
Before the management presentations, please allow me to read our Safe Harbor Statement. During this call representatives of the company will make certain forward-looking statements within the meaning of the U.S. Securities Act and the Securities Exchange Act. These statements are based upon management’s current views and expectations with respect to future events and are not a guarantee of future performance. Furthermore, these statements are, by their nature, subject to a large number of risks and uncertainties that could cause actual performance and results to differ materially from those discussed in the forward-looking statements as a result of a wide variety of factors. eLong undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Please refer to the risk factors described in our Annual Report on Form 20-F, as well as the full text of the Safe Harbor Statement in our Form 6-K, which will be furnished to the SEC in connection with our press release, for discussion of some of the important factors that could affect future results.
I will now turn the call over to our CEO, Guangfu Cui.
Thank you, Echo. Hello everyone, thank you for being on this call.
Hotel room nights grew 70% year over year to 4.6 million in the third quarter. It is the first time that our quarterly room nights exceeded 4 million and represents nearly 2 million additional room nights compared to the third quarter 2011. 76% of our hotel bookings are now made by our customers online or through our mobile applications. Our domestic hotel coverage network expanded 54% to almost 36,000 domestic hotels as of September 30, 2012. In addition, our international hotel coverage totals over 160,000 hotels through our direct connection to Expedia.
In Q3, we launched our largest-ever marketing campaign featuring the “Book Hotel, Use eLong” branding message and an increased level of coupon offers. This marketing campaign significantly improved eLong brand awareness and contributed to our expanded market share. It did come with a price, but we are willing to take a short-term loss for the long term market share gain. We have been executing on-line hotel strategy for 5 years. Our goal is to become No.1 on-line hotel booking service provider. We are moving along well toward our goal in the past few years.
Despite intensified competition, our hotel groupbuy product growth accelerated in the third quarter, and remains the clear market leader in China. During the quarter, we expanded groupbuy daily hotel deals from approximately 4,500 to 6,000. The hotel groupbuy products provide significant consumer savings, and our leadership in this product segment reinforces our overall brand value proposition.
We continue to see high traffic growth from mobile booking channels, and now provide a full range of mobile options for our customers, including iPhone, iPad, Android and Winphone as well as our mobile website m.eLong.com. We will continue to invest to strengthen our position in this growing channel. Due to the outstanding user experience of eLong mobile applications, eLong was awarded the 2012 China Top Micro Innovation Company by Business Review Magazine
To support our growing hotel business and to maintain our high quality service, we made significant investment in improving our IT infrastructure in recent quarters, and expect to continue these investments for the remainder of 2012. We also opened our second customer service center in Hefei in Q2 and continued to staff that facility in Q3. We now have 700 service agents in Hefei. We currently intend to further expand capacity in Hefei in 2013.
In Q3, we received the 2012 China Best Employer award, and our customer service center received the 2012 China Best Contact Center award for the sixth consecutive year.
Looking forward, we will stick to our online hotel strategy. We will stay our course. There is no change here. In 2013, we will take an investment mode and aim to push forward. We will market aggressively to further improve eLong brand awareness and expand market share. We will fight aggressively and drive harder.
Now, I would like to hand the call over to Mike for a review of our financial results.
Thank you, Guangfu. In the third quarter, strong online hotel performance drove our year-on-year net revenue growth to 20% compared with the third quarter of 2011.
Our hotel business benefitted from our continued product investment and innovation in emerging hotel booking models such as groupbuy as well as developing channels such as mobile. Q3 room nights booked through eLong increased 70% year-on-year to 4.6 million.