author | Xie Han
editor | Chen Yanxu
operation | Chen Xiaoyan
another mirror (ID: DMS-012)
Recently, Ctrip Group released its third quarter financial report this year, with revenue growth exceeding expectations. Research reports from many international institutions pointed out that they are optimistic about the fundamentals of and Ctrip . Morgan Stanley , Macquarie and UBS have all raised the target price of US stocks , with Macquarie rating it as "outperform". UBS issued a report that lowered Ctrip's revenue forecast for the fourth quarter of this year by 5% to 4.9 billion yuan, and raised Ctrip's US stock rating from "neutral" to "buy."
The epidemic has continued to spread since the beginning of 2020, with the tourism and hotel industries bearing the brunt of the impact. As the current domestic epidemic gradually eases, the country gradually moves away from the zero-clearance policy, and border control measures are further relaxed. Offline traffic pools have regrouped, OTA's business logic closed loop has begun to be reconstructed, and Ctrip's performance has also recovered.
On December 15, Ctrip released its third quarterly report for this year. Its revenue was 6.9 billion yuan, increased by 29% year-on-year, and increased by 72% month-on-month. The financial report stated that the substantial growth in revenue was mainly driven by the strong recovery of the domestic market and overseas markets; the net profit of was 245 million yuan compared with the same period last year; the adjusted EBITDA was 1.4 billion yuan, a year-on-year increase of 164%.
"In the third quarter, driven by strong summer travel demand and the ninth version of the epidemic prevention and control plan, the domestic and international tourism markets performed well." Liang Jianzhang, co-founder and chairman of the board of directors of Ctrip Group, said bluntly that although the rebound of the epidemic since late August affected the recovery of the domestic market in the second half of the quarter, Ctrip's performance continued to outperform the market. In the third quarter, domestic hotel and air ticket revenue both achieved year-on-year growth.
Liang Jianzhang said that after the release of most of the retaliatory tourism demand, the continued growth of overseas markets is encouraging. As the global market continues to recover and China moves toward further easing, Ctrip is now standing at an inflection point.
In the past three years, the tourism industry has endured tremendous development pressure. The domestic tourism business has shown resilience in the third quarter. The market is still in a weak state, and the industry competition pressure faced by Ctrip cannot be underestimated.
Douyin , Meituan , Alibaba Fliggy, Kuaishou, Xiaohongshu and other Internet traffic platforms are all relying on cheaper traffic and customer acquisition costs within the platform to storm the wine and travel market.
Douyin even announced in mid-July that it would switch its wine and travel business from the e-commerce sector to the local life service sector, with the intention of creating a "Byte version of Meituan".
At the same time, there are still uncertainties in overseas travel, but it is expected to continue to improve in the coming months. As more countries reopen and return to normal, Ctrip's long-term international business expansion is expected to be unleashed, and the growth momentum of international business will also attract outside attention.
Change the way of playing
Distinct Mirror
Facing the changes in the industry, Ctrip actively responded and began to build a traffic ecosystem. In the early days of the epidemic, Liang Jianzhang led a live broadcast team, focusing on high-star hotel pre-sales, to explore new ways to monetize traffic. "Ctrip Live" currently has 200 million users.
In addition, Ctrip also launched the Xingxing flagship store in 2021, aiming to build an private domain traffic pool for partners. Some destination partners issued consumption coupons at the Xingxao flagship store to further enhance user stickiness.
Another important move by Ctrip in the field of marketing is the launch of high-quality lists to attract traffic to merchants on the lists. Since this year, merchants on the list have received an average of more than 10% additional GMV and 20% additional traffic. Ctrip established the Ctrip Word-of-mouth Ranking for the first time in 2014. Through continuous upgrading, this blockbuster content product not only solves users' "travel choice difficulty ", but also brings significant benefits to partner merchants.
According to the latest data, 60% of Ctrip users will be attracted by the items on the list after using the word-of-mouth list. Since this year, merchants on the list have gained an average of over 10% more GMV and 20% more traffic. The
Super Series is a blockbuster marketing IP officially created by Ctrip. Since its launch in the second half of 2021, it has helped multiple brands and destinations quickly break out of the industry in the field of integrated marketing, achieving a double explosion of publicity and sales, and inspiring more new possibilities for brand business growth.
On December 2, Ctrip Group held the "Getting Together with the Times" 2022 Global Partner Summit in Macau. At this summit, Ctrip and the Macau Special Administrative Region Government Tourism Office officially opened a new chapter in global cooperation.
At the conference site, Ctrip Group released the "Super Global Travel" IP. In the future, Ctrip will cooperate with more overseas travel partners to cultivate ideas for tourists at home and abroad, and help accelerate the development of the global tourism industry.
In terms of marketing, Ctrip issues consumer vouchers through cooperation with domestic and foreign tourist destinations to help cooperative destinations achieve faster recovery. It is worth noting that as of the end of the third quarter of this year, the total amount of funds and wealth management products on Ctrip’s books reached 62 billion yuan.
Thanks to the rapid growth of local hotel bookings and the rapid recovery of long-distance hotel bookings, in the third quarter of this year, Ctrip’s overall domestic hotel bookings returned to 2019 levels, and domestic hotel booking revenue increased by 25% year-on-year.
Compared with air tickets, Ctrip International Hotels’ recovery is stronger. In the third quarter of this year, overseas hotel bookings on international platforms increased by 45% compared with the same period in 2019, exceeding the 2019 level for three consecutive quarters. Among them, local hotel bookings in overseas markets increased by 300% compared with the same period in 2019.
Accelerate product layout
Distinct Mirror
Ctrip relies on its strong resources to create ecological advantages in transportation ticketing, business travel, supply chain, high-end hotels and international business. The competition barriers created by Ctrip in a short period of time are difficult to be easily shaken by Internet companies such as Meituan and Douyin.
In terms of news, data from Ctrip’s FlightAI market insight platform shows that from December 7 to 11, domestic passenger traffic recovered to about 40% of the same period in 2019, and the overall search popularity has recovered to about 80%. In addition, since the prevention and control policies have been continuously optimized, the civil aviation market has also entered the fast lane of rapid recovery, maintaining a daily growth of 5%. In addition to orders for immediate travel, the number of ticket bookings during the Spring Festival has increased significantly.
The financial report shows that Ctrip Group’s main business will accelerate its recovery in the third quarter of 2022. Among them, accommodation booking revenue was 2.9 billion yuan, a year-on-year increase of 32%; transportation ticketing revenue was 2.6 billion yuan, a year-on-year increase of 44%; tourism and vacation business revenue was 387 million yuan, relatively stable year-on-year; business travel management business revenue was 370 million yuan, a year-on-year growth of 9%.
In the hotel business, Ctrip, which has always had the advantage of high-end hotel business, has innovated hotel packages. In 2020, Ctrip launched a new project to build hotels into "destination", not only to meet the demand for accommodation, but to meet the entire entertainment needs, and include high-value entertainment projects around the hotel into the hotel package.
Currently, the number of high-star hotels covering package packages ranges from 6,000 to more than 8,000.
In addition, Ctrip has increased the scalability of mid- to low-star hotels. In the evolution of information, Ctrip has also supplemented hotels with high-quality and high-value list content, relying on the industry's largest travel transaction data and review data, covering more than 1,800 cities and more than 2,000 homestays on the list. To attract traffic to hotels on the list, it attracts more than 400,000 visitors every day, increases traffic by more than 20%, and transaction GMV exceeds 10%.
Chen Ruiliang, CEO of Ctrip Group’s Accommodation Business Group, said that in the past year, the changing characteristics of users and hotels can be summarized in four keywords: shorter booking cycles, accelerated local booking speed, quality and chain.
Ctrip is also building core competitiveness in terms of services and improving service levels through technical means. By promoting voice automation robots, the huge transaction costs, and service time are reduced.
In terms of tourism business, peripheralization and small groupization are obvious trends. Ctrip's various business lines continue to develop the peripheral tourism supply system, and the quality of products and services continues to improve. From 2020 to 2022, the cumulative number of private group tours will exceed 330,000.
This year, Ctrip Business Travel restructured its organizational structure, broke the original system, and formally established five major competency centers, namely technology center, resource center, service center, compliance center and marketing center.
In addition, Ctrip Business Travel has officially launched Ctrip Business Travel product cloud map to the market, and has made arrangements in five markets in East Asia, Southeast Asia and Europe. There are now more than 34 million business travel users in the world. The business travel "hotel supply chain" has established global strategic cooperation with multiple international giants. It has established a "business travel cooperation network" with more than 1.2 million "hotel partners" in more than 200 countries and regions.
For Ctrip, there are both opportunities and challenges ahead. With the recovery of the domestic tourism market and the liberalization of outbound travel in the future, the closed loop of OTA's business logic will also be reshaped. The industry structure has already changed. If you want to truly seize the "inflection point" opportunity, the overseas strategy can indeed find new performance growth points, but how to expand platform traffic and expand the sinking market is also particularly critical.
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