Goldman Sachs Says Ctrip.com's New Promotions are a Sign of Elevated Competition

According to a research report published today by Goldman Sachs, Ctrip.com International's CTRP newest hotel coupon/rebates are indicative of intensified price competition amongst hotels. In the report, Goldman Sachs commented, “We estimate hotel rebates, which are treated as contra-revenue, to have a more pronounced impact on revenue growth than on gross margins. However slower revenue growth also negatively impacts operating margins, especially given rapidly rising marketing costs. We forecast 16% revenue growth in 2012E (versus 20% in 3Q11 and 16% in 4Q11E), below Bloomberg consensus' 25%, as we expect a moderate acceleration in travel demand growth to be partly offset by lower yields.” Goldman Sachs maintains its Sell rating and $21 PT on Ctrip.com, which closed yesterday at $25.92.