eLong delivers another quarter of positive operating income

Long’s net income in the third quarter was RMB7.5 million ($1.1 million) compared to net loss of RMB15.5 million in the prior year period.

Total revenues increased 15 percent year-on-year to RMB103.2 million and net revenues increased 16 percent year-on-year to RMB97.2 million.

“The summer travel season turned out to be a strong one for eLong,” said Guangfu Cui, chief executive officer of eLong.

Operating income in the third quarter was RMB5.9 million compared to operating loss of RMB19.9 million in the prior year period, driven primarily by decrease in sales and marketing expenses and increase in gross profit.

Hotel commission is in the range of 15-16 percent and air commission the range of 5 -6 percent.

“Even with  continued mix shift to the budget sector hotels, that actually does not provide, create any pressure on our hotel commission rate. Though the ADR is lower, the commission rate is in line with that of our broader hotel portfolio,” said a spokesperson.

The company, which had introduced its first ever virtual coupon campaign this year, is planning to offer more money-saving and worry-free travel booking opportunities.

Focus

According to Cui, online growth is a lot faster than the off-line and online percentage is about one-third right now approximately. In this context, the company is continuing to enhance its website.

“We have upgraded our homepage already and eLong website is a lot faster than in the past,” said Cui, who added that the plan is to continue to upgrade each and every single channels of the website, and make sure that “our website is, the speed is within 3 seconds, loading time, and trying also to increase our availability time.” Cui shared such plans during company’s third quarter earnings call (transcript on Seeking Alpha).

He added that the travel destination information will be more meaningful, more relevant and tailor-made for travellers.

eLong currently expects net revenues for the fourth quarter of 2009 to be within the range of RMB90 million to RMB99 million, equal to an increase of 5-15 percent compared to the fourth quarter of 2008.