“Why do employees in China keep sending me screenshots of flight prices that undercut our corporate rates?” If you’ve asked this question, you’re not alone. For global travel managers overseeing China programs, fare discrepancies between consumer platforms and approved booking channels are a recurring issue. Screenshots of cheaper options from Chinese online travel agents (OTAs) are often sent in good faith by local employees, but they raise important concerns about program compliance, transparency, and duty of care.
A recent market shakeup highlights the issue: One of China’s largest airlines, China Southern, suspended a prominent OTA from selling its fares, citing pricing transparency and distribution concerns. Events like this expose the fragility of the fare ecosystem in China – and the risks for corporate travel programs. Here’s what travel managers need to know to navigate this complex environment.
How China’s OTA ecosystem works
China’s consumer OTAs operate differently from those in other regions. The platforms prioritize agility, hyper-local pricing, and layered distribution – often enabling third-party agents to list fares without standard documentation or full transparency.
1. Fare display norms
- Unbundled base fares: Initial prices may exclude taxes and fees, giving the illusion of a cheaper fare (e.g., ¥499 becomes ¥650+ at checkout).
- Third-party listings: Smaller agents can sell fares on OTAs – often without issuing a T4 electronic itinerary, a crucial element for corporate reporting and traveler tracking.
2. Inventory tactics
- Temporary reservations: OTAs may hold seat blocks using automation, showing urgency cues like “Only 2 left!” even if seats are still widely available.
- Delayed booking: Some third-party sellers delay ticket issuance while monitoring price trends, leading to last-minute cancellations or rebookings.
3. Revenue models
- Upselling ancillaries: Services like seat selection or meals, typically included in full-service airline fares, are sold as premium add-ons.
- Membership hooks: Deep discounts may require joining loyalty clubs or purchasing bundles.
4. Dynamic, algorithm-driven pricing
- Demand-based adjustments: Prices shift in real time depending on user activity, search behavior, and IP address.
- First-time user discounts: Lower fares may be exclusive to new users as platforms attempt to drive conversions.
- Bank/card promotions: Payment method–specific deals create further price fragmentation.
- Bundled upsells: Base fares may be subsidized by bundling high-margin products like insurance or prepaid credits.
Recent challenges for corporate programs
- Airline-OTA friction: Airline decisions to cut ties with OTAs over distribution disputes (e.g., China Southern) disrupt access and raise concerns over how fares are displayed and sold.
- Lack of documentation: Without T4 itineraries, travelers receive incomplete confirmations, making auditing, traveler tracking, and airline support much harder.
What travel managers can do
1. Break down the costs and risks
- Educate stakeholders with side-by-side comparisons: consumer platform fares with full add-ons vs. all-in corporate fares.
- Emphasize what’s missing from non-compliant fares – like T4 e-tickets – impacting expense reconciliation and duty of care.
2. Engage with airlines directly
- Ask about their China distribution strategy and clarify how corporate fares are offered.
- Explore SME contracts for underused routes to unlock value.
3. Revisit local policy guidance
- Encourage comparisons only using official airline websites, apps, or verified flagship OTA stores.
- Avoid relying on screenshots from third-party sellers with unverifiable fare conditions.
The bottom line
China’s travel marketplace thrives on flexibility, but with it comes complexity. By understanding how fares are priced and distributed – particularly through OTAs – travel managers can:
- Shift the conversation from price to value and compliance.
- Partner with local teams to explain fare behavior and the risks of unofficial bookings.
- Align with airlines and TMCs to reinforce documentation standards.
- Update policies to ensure cost savings don’t come at the expense of traveler safety or program control.
The next time someone flags a suspiciously low fare in China, you’ll be equipped to explain what’s really going on – and why booking through trusted, compliant channels matters more than ever.
Join the conversation: If you have questions or experiences to share about fare discrepancies in China, connect with Jonathan Kao, CFA, on LinkedIn.
