eLong and Ctrip report losses

eLong attributed the loss to higher developmental expenses and marketing costs. Its third-quarter operating expenses rose 17 per cent in the quarter compared to the same time last year.

However, eLong posted slight year-one-year gross revenue gains of seven per cent to Rmb 90.0 million (US$13.1 million), with hotel commissions up one per cent and airline ticket commissions up 28 per cent.

eLong’s Chris Chan CFO said the current economic climate is creating operational challenges.

"In light of the current environment, we intend to balance prudent expense management against investments for growth in 2009, and are taking steps to streamline our costs," Chan said in a release. "We believe that our increased but focused investment in marketing, technology, and our product competitiveness will pay off over time while the reduced cost base relative to the business growth opportunity will help protect the bottom line and drive a higher efficiency."

The announcement comes after eLong’s primary competitor, China’s market leader Ctrip, also released disappointing third-quarter results, including a five per cent drop in net income from its third quarter in 2007. However, the company also posted a 15 per cent year-on-year increase for revenue and projects its fourth-quarter revenue to increase by five to 15 per cent.