ELong's CEO Discusses Q1 2011 Results - Earnings Call Transcript

eLong, Inc. (LONG)

Q1 2011 Earnings Conference Call

May 16, 2011 8:00 p.m. EDT

Executives

Mike Doyle – CFO

Guangfu Cui – CEO

Analysts

Eddie Leung – Merrill Lynch

Ming Zhao – SIG

Fawne Jiang – Brean Murray

Wendy Huang – Royal Bank of Scotland

Question-and-Answer Session

Operator

Okay, our first question is from Eddie Leung of Merrill Lynch. Your may now ask your question, sir.

Eddie Leung – Merrill Lynch

Hey, good morning, Guangfu and Mike. Thank you for taking my questions. I have a couple of questions. The first one is regarding international flights. You mentioned that in this quarter you guys were helped by the mix of ships to international flights. So just wondering how much percentage of ticketing sales would be related to outbound. And then I also have follow-up questions on some of the operating metrics regarding your strategy of going online. Could you share with us the percentage of transactions done online in the quarter, and then the percentage of payment, non-cash payment? Thank you.

Mike Doyle

Eddie, this is Mike. On the international air side, while we're seeing mixed ships into the international businesses, it's still quite small as a percentage of the total. We're seeing just over 5% of our segment volume coming in from international transactions [inaudible].

Guangfu Cui

Eddie, this is Guangfu. Let me take your question regarding the mix of website versus call center. And in the first quarter our hotel bookings over the website is about approximately 50% of our total hotel business. And we do predict that in the second quarter we will see more than 50% of hotel bookings coming from our website.

Your third question regarding the non-cash transaction for the air ticketing business right now, 100% of our ticketing transactions of the eLong customers using either credit card, online banking or online third-party tools to pay us. So there's no cash transaction at eLong right now. Thank you.

Eddie Leung – Merrill Lynch

Got that. Thank you very much.

Operator

Thanks for the question. Our next question is from Mr. Ming Zhao of SIG. Sir, you may now ask your question.

Ming Zhao – SIG

Thank you. Good morning, Guangfu and Mike. Very exciting news. So on this Tencent partnership, could you give us a little bit more color as to how you two are going to work together, you know, they have a lot of users, how are you going to leverage their user base to increase your business? And another topic on your marketing plan online, could you comment on how you have been using the social media to market your service? Any comments over there? Thank you very much.

Guangfu Cui

Ming, this is Guangfu. Let me take your question. The first question is about how to work with Tencent to promote eLong business to their users. First of all, we recognize that Tencent has a lot of user base and market platform. Most of the platform, leading platform in China, like eLong, has the broadest hotel offering in China. So those are our strengths. So the cooperation going forward will be focused on how to promote eLong's hotel products to Tencent users and help eLong to achieve number one online hotel booking provider here in China. So that's the main focus of the cooperation.

The second question, about, if I understand correctly your question, is about how to use social media to promote eLong's business going forward. So if you'll recall that we do have a series of actions to promote eLong's business via social network. For example, eLong is now the number one enterprise microblog with the most number of friends or followers in SINA microblog. So, up to date, we have about 560,000 followers in SINA alone and over 100,000 followers in Tencent microblog. So, as a matter of fact, eLong is the number one company with the most friends or followers in those -- in SINA microblog.

And with Tencent, again Tencent has the SNS, and we will promote our business working with them on this [effort]. And last but not least, we are working with Renren to promote our business in direct social network also. So those three are the most powerful players in the SNS area and we are happy to see that eLong is better positioned to promote our business in these three networks. Thanks.

Ming Zhao – SIG

Okay, thanks. Just a quick follow-up to the Tencent partnership, do we know if eLong is the exclusive partner or the most important partner in the travel area to Tencent?

Guangfu Cui

Due to our agreement with Tencent on the commercial product, we can't disclose the exact cooperation details, but we can confidently say that we got sufficient level of support and commitment from Tencent to make sure we bring in their platform and promote our hotel products to their users. Thank you.

Ming Zhao – SIG

Thanks.

Operator

Thank you. Our next question is from Fawne Jiang of Brean Murray. Ma'am you may now ask your question.

Fawne Jiang – Brean Murray

Good morning, Guangfu and Mike. Thank you for taking my question. My number one question is actually a follow-up on the Tencent partnership. If I recall correctly, Tencent is actually -- their hotel booking on their own website is actually powered by eLong. I just wonder, do you expect more volume to drive from that site specifically? Or is there any other collaboration format you're expecting?

Guangfu Cui

Fawne, this is Guangfu. Let me take your question. We have cooperated with Tencent for over a year in different platforms of Tencent, and we did have our hotel offering in QQ, travel.qq.com, and had some level of success. And I think in the future we will not only promote our products in this travel.qq.com but also promote our products in mobile, SNS and other platforms also. So, not limited only to these travel.qq.com, but of course travel.qq.com will be the main channel for us to promote our hotel products to their users. Thank you.

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