eLong, Inc. (LONG)
Q4 2012 Earnings Call
February 21, 2013 8:00 PM ET
Mike Doyle – CFO
Guangfu Cui – CEO
Eddie Leung – Merrill Lynch
Wendy Huang – CIMB
Fawne Jiang – BM Capital
Muzhi Li – Citigroup
Tian Hou – T. H. Capital
Alicia Yap – Barclays
Hello everyone, thank you for joining eLong’s fourth quarter 2012 conference call.
Previous Statements by LONG
» eLong's CEO Discusses Q3 2012 Results - Earnings Call Transcript
» eLong's CEO Discusses Q2 2012 Results - Earnings Call Transcript
» eLong's CEO Discusses Q1 2012 Results - Earnings Call Transcript
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 containing our fourth quarter and full year 2012 unaudited financial results, 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.
Guang Fu - CEO
Thank you, Echo. Hello everyone, thank you for being on this call.
Before I discuss the Q4 performance, I would like to share with you a great honor eLong received in 2012. eLong was named the 2012 China Best Employer by Zhaopin.com and Beijing University. As part of this award, eLong was also ranked No. 26 among the top 100 best employers in China. This is the first time eLong has received the best employer award in China. eLong company culture “People, Service and Profit” is well received by our employees and is now well recognized by our society.
Now the business result. In Q4, hotel room nights exceeded 5 million for the first time. Our hotel room volume growth accelerated in each quarter during 2012. And now more than three-quarters of our hotel bookings are made by our customers online through our websites or mobile applications. Our domestic hotel coverage network expanded 53% to over 39,000 domestic hotels as of December 31, 2012. In addition, our international hotel coverage totals over 160,000 hotels through our direct connection to Expedia. The highlight for 2012 was that hotel room nights grew 75% to 16.1 million room nights compared to 9.2 million in the prior year.
In Q4, we continued our largest-ever marketing campaign featuring the “Book Hotel, Use eLong” branding message and coupon offers. This marketing campaign improved eLong brand awareness and contributed to our hotel volume growth. Our goal is to become the No.1 online hotel booking service provider. We have been executing our online hotel strategy for 5 years. We are moving along well towards this goal. Given the great opportunity ahead of us, we are willing to bear the costs of increased marketing efforts, and we will continue our aggressive marketing approach in 2013.
Despite intensified competition, our hotel groupbuy product growth accelerated in the fourth quarter, and remains the clear market leader in China. During the quarter, we expanded groupbuy deals from approximately 6,000 to 10,000. Hotels typically offer deep discounts for groupbuy deals. Our leadership in this product segment reinforces our overall brand value proposition.
We continue to see high growth from our mobile booking channels, and now provide a full range of mobile options for our customers to book hotels and air tickets, 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.
To support our growing hotel business and to maintain our high quality service, we made significant investment in improving our infrastructure in recent quarters, and expect to continue these investments in 2013. These investments include IT infrastructure and operation capacity. We opened our second customer service center in Hefei in Q2 and continued to staff that facility in Q4. We intend to further expand capacity in Hefei in 2013.
In 2013, we will continue executing on our online hotel strategy with an increased emphasis on mobile. Most of our priorities in 2013 remain consistent with 2012, and these priorities are:
1) Offer more competitively priced hotel products;
2) Offer more domestic hotels;
3) Aggressively market to and attract online customers, especially mobile customers;
4) Improve the online booking experience and overall customer service quality; and finally
5) Continue to build IT and operation infrastructure.
To compete and win, we must continue to provide customers with broader hotel product choices at competitive prices coupled with an outstanding user experience. We are excited about the great opportunity in front of us!