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Quake's impact felt online
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The devastating earthquake that hit Sichuan province last month has created a huge loss in the real world but the impact has also been felt online.

Top officials from China's major online travel companies said the quake led most travelers to cancel and postpone their trips.

"Sichuan province is one of the major travel destinations and it contributed about 10 percent of our business," said Cui Guangfu, CEO of eLong Inc. "The earthquake will have a significant impact on our business in the second quarter and its long-term impact is still hard to tell."

As one of the major online travel companies, eLong posted revenue of 81.4 million yuan in the first quarter of this year, an increase of 25 percent over the same period last year.

But the company lowered its projected revenue growth rate to 6 percent from 18 percent after the earthquake.

Beside eLong, China's top online travel agent Ctrip.com was also hit by the earthquake. The company said the Sichuan earthquake could hurt its second-quarter revenue because customers no longer wanted to travel.

"The whole country right now is focusing on the relief efforts," said Jane Sun, chief financial officer of Ctrip, at an analysts' conference. "They (the government) are discouraging people from traveling to Sichuan province so that they do not interfere with the relief efforts."

Sun said the direct impact from the cancellations were limited, but said the earthquake has damaged the industry.

According to government figures, 384 popular destinations, 524 star-rated hotels, 684 travel agencies and 58 tour vehicle companies in Sichuan province have basically closed down after the earthquake.

The National Tourism Administration estimates that China has lost over 53.37 billion yuan in the tourism sector due to the earthquake. Sichuan province accounted for over 98 percent of the loss.

Sun from Ctrip said consumer sentiment may rebound in the second half of the year. She estimates the company's third- and fourth-quarter revenue growth could still reach 35 percent.

According to domestic research firm iResearch, China's online travel booking market reached 2.27 billion yuan last year, a 47.5 percent increase over 2006. The company estimates that it will reach 10 billion yuan by 2011.

(China Daily June 18, 2008)

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