Summary of Key Points
On July 25, Ctrip was fined 5.179 billion yuan by the State Administration for Market Regulation for monopolistic practices, such as forcing hotels to choose between two options and using technical tools to control minimum prices (setting the lowest prices). Three days later, the A-share hotel sector rose against the market trend. The article discusses topics including "how much money Ctrip has made from hotels" and "whether hotel price wars will disappear," revealing the hidden structure of Ctrip's commission revenue, the current imbalance between supply and demand in the hotel industry, and the long-term impact of the penalty on the industry.
I. Ctrip's 5.1 Billion Yuan Fine: Two “Records” in Platform Antitrust Cases
What makes this fine so severe? There are two key points:
1. The highest fine percentage: The fine amounted to 3.521 billion yuan, accounting for 7.5% of the relevant sales revenue—higher than Alibaba’s 4% and Meituan’s 3%, making it the highest proportion in platform economy antitrust cases to date.
2. Forced confiscation of illegal gains: In addition to the fine, Ctrip was also required to pay back 1.658 billion yuan in illegal profits, a penalty not previously imposed in Alibaba and Meituan cases, indicating that Ctrip’s monopolistic behavior was more substantiated.
The penalty did not come out of nowhere: It started with a meeting in Guizhou in August 2025, followed by an identification of price manipulation in Zhengzhou in January 2026, and after six months of investigation, the case was filed in January 2026. The target of the regulation was Ctrip’s main source of revenue—the accommodation booking business, which accounted for 42% of its total sales in 2025.
II. How Much Money Ctrip Makes from Hotels: Hidden in “Commissions”
Ctrip’s revenue from accommodation bookings mainly comes from commissions (the fees hotels pay to the platform for selling their rooms). But where does this money come from?
- Most revenue comes from non-chain hotels: In 2025, Ctrip’s accommodation booking revenue was 26.1 billion yuan, of which only 728 million yuan came from affiliated companies (such as Tongcheng and Huazhu), with the remaining 97% coming from non-affiliated hotels (individual properties and homestays).
- Commission rates vary significantly: Chain hotels, with their brand and membership systems, have stronger bargaining power and thus higher commission rates of 8%-15%. Individual hotels, lacking customer sources, rely more on OTAs and face commission rates of 15%-30% (some even exceeding 30% of the order amount). This means that smaller hotels lose a significant portion of their profits to Ctrip.
III. Why Did the Hotel Sector Rise Despite the Fine? The Market Hopes for “Cost Relief”
On July 28, the hotel sector rose 2% against the market trend, with Huatian Hotels hitting two consecutive daily limit up levels. The reason is simple: Investors expect that after Ctrip makes adjustments, the restrictions on hotels will be lifted.
The core changes for Ctrip include:
- Ending the requirement to choose between two options (no longer forcing exclusive partnerships)
- Releasing the obligation to maintain the lowest price across all platforms
These changes mean that hotels can now sell their rooms on multiple platforms without fear of penalties from Ctrip and have more flexibility in setting prices. Additionally, the 123 million yuan in reserve funds that were previously deducted due to violations will be returned to hotels. These improvements directly reduce hotels’ operational costs, which is why the market reacted positively.
IV. Hotel Price Wars Haven’t Ended; They’ve Just Moved to New Players
The fine has dismantled Ctrip’s ability to control prices, but price wars won’t disappear because the underlying issue of supply and demand imbalance remains:
- Excessive supply and insufficient demand: In 2025, hotel supply increased by 3.2%, while demand only grew by 0.4%, resulting in 3% of rooms remaining unoccupied.
- Price cuts are necessary for survival: Chain hotels with membership systems (like Huazhu, which receive 70% of their bookings from members) can withstand price pressures, but the 200,000 individual hotels without customer sources rely on OTAs to attract customers and must offer lower prices to gain visibility.
The current price wars have shifted: Instead of Ctrip forcing prices down, hotels are now competing to reduce prices themselves. Platforms no longer impose price controls, but hotels are hesitant to raise them due to fierce competition.
V. The Penalty is a “Red Line,” but Recovery Depends on Supply-Demand Balance
This penalty has set a clear boundary for platforms (no more forced exclusivity or price control), but the industry’s true recovery depends on:
- Elimination of inefficient hotels: In the next 1-2 years, less efficient hotels will be phased out, slowing down supply growth.
- Demand recovery: The cultural and tourism industries are becoming strategic pillars, but demand growth takes time.
Only when supply and demand are balanced will hotels dare to raise prices, and price wars will truly end.
In summary, the Ctrip fine is a signal of industry regulation, but the tough times for the hotel sector have not yet passed. Unless the supply-demand relationship improves, price wars will continue, though the tactics may change. For consumers, low-priced hotels may still be available in the short term, but small and medium-sized hotel owners will face continued challenges.