eLong Discusses Competition in China's Travel Services Sector (LONG, CTRP)

From eLong's (LONG) Q1 2006 earnings conference call transcript:

William Bao Bean - Deutsche Bank

Okay. Can you give us a sense if there is any change in your thinking on marketing spend going forward?

Derek Palaschuk - Chief Financial Officer

Sure, William. What we always said is that we have a very long-term view. As Tom often tells our senior management team, we are clearly in the right place at the right time. So we are going to make the necessary investment to take us to the number one position in this market. We have a very strong competitive position now, and we want to protect that and increase our position. So we will invest what we think is necessary to achieve that.

William Bao Bean - Deutsche Bank

So no change then? Can you give us a sense of when you expect the international to become material, or over 5%?

Derek Palaschuk - Chief Financial Officer

We would not see it happening this year, William.

William Bao Bean - Deutsche Bank

Okay. Can you just give us an update on the competitive environment? Anything new from Travel Sky?

Derek Palaschuk - Chief Financial Officer

Since our last call, William, there has not been, as we said on the hotel business, there has not been any change in the competitive landscape. There are really very few players in that area. In the air, we have seen some new entrants, but if you look at eLong’s competitive advantage, we are very well-financed. We have over $130 million in cash. We have Expedia as a shareholder. We also have a very broad product offering, hotel and air, so that some of these new air entrants are not able to provide a full suite of products, so we are well-positioned and we are working hard to improve on our existing execution.