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second quarter -

ctrip's net operating income12.8 billion yuan, a year-on-year increase of 14%; net profit is3.833 billion yuan, a year-on-year increase of 507.45%.

tongcheng travel achieves revenue4.25 billion yuan, a year-on-year increase of 48.1%, creating a new record for single-quarter revenue; adjusted net profit was660 million yuan.

tuniu's net income is about117 million yuan, a year-on-year increase of 17%; net profit of approx.43 million yuan, while the net profit in the same period last year was only 220,000 yuan.

it's the earnings season again, and the otas that submitted their second-quarter results earlier have performed particularly well. the accelerated market recovery, the enthusiasm for tourism consumption, and the continued recovery of the supply chain are all reflected in the performance of otas. after carefully reading the financial reports, some industry insiders lamented that these companies have continued their previous strategies to maintain stable performance. some industry insiders also noticed that whether it is the new actions in recent times or the performance of the financial report performance analysis meeting, they all reveal the urgency of otas to seize more market traffic.

01

stabilize the basic situation

in the past four years, when analyzing which part of ota business performs best every quarter, the answers are relatively similar:ctrip and tongcheng travel’s strengths lie in accommodation and transportation ticketing, while tuniu’s strengths lie in packaged travel business.however, for ota, performance is not static, and some projects may even see a slight month-on-month decline, which makes it quite challenging to maintain the basic market.

in the second quarter of this year, ctrip's revenue from accommodation bookings and transportation ticketing accounted for about 78% of its total revenue, totaling 10 billion yuan.in terms of growth, revenue from accommodation bookings increased by 20% year-on-year, while transportation ticketing only increased slightly by 1% year-on-year due to fluctuations in air ticket prices, and fell by 3% month-on-month.it is obvious thataccommodation business has become ctrip's top priority this quarter.however, this market is not easy to enter. meituan, which focuses on local life, fliggy, which allows merchants to open flagship stores, and douyin, which has a lot of traffic, are all very powerful players in this field. what are ctrip's advantages?

according to a research report by zhongtai securities,in the high-end hotel market, ctrip has an absolute advantage, and other otas have a significant gap in matching high-end hotel customers with ctrip.the people in this market tend to consume immediately, have low price sensitivity, and have strong platform stickiness. the traffic business logic of "goods find people" on some platforms does not have a particularly big impact on ctrip.

in fact, the accommodation booking business is not only the key to ota's revenue growth, but also the key to its outstanding profit performance. an industry insider told the china tourism news reporter,the platform commission rate for accommodation bookings is usually higher, generally between 8% and 15%, while the commission rate for high-speed rail tickets and air tickets is between 2% and 5%.therefore, how to gain a larger share of the sizeable mid-range and economy hotel market is something ctrip has been thinking about. if they do not want to compete with other platforms on price, they have to find other highlights.

it seems that they are doing similar business, but different companies have different advantages and focus points.

tongcheng travel's accommodation and transportation business revenue accounts for about 70% of its total revenue. the growth rates of these two revenue items in the second quarter of this year were not much different, increasing by 12.8% and 16.6% year-on-year respectively.

nowadays, booking tickets and hotels directly through wechat has become a habit for many users. the platform connected by this channel is tongcheng travel. not long ago, tongcheng travel renewed its 3-year strategic cooperation and marketing promotion agreement with tencent. in the future, it will continue to obtain user traffic through multiple channels, mainly wechat.

in recent years,tongcheng travel has been penetrating its services from the "aorta" of mass travel to the "capillaries", such as launching the "city pass" business product line.as of the second quarter of this year, tongcheng travel's "city pass" mini program has covered public transportation in more than 100 cities across the country, and its service scope has expanded to the city's subway system.

"our profitability has further improved, with net profit in the second quarter hitting a new quarterly high since our listing," said yu dunde, ceo of tuniu.

tuniu's business revenue structure is relatively simple, including packaged travel product revenue and other revenue.in the second quarter, packaged travel product revenue increased by 29% year-on-year, while other revenue decreased by 11% year-on-year. it can be seen that tuniu's revenue and profit mainly come from its main business and core products.although tuniu is relatively traditional in business development, its operating model is not conservative.during the reporting period,tuniu live’s transaction amount and write-off amount both increased by more than 200% year-on-year.as of the end of may this year, tuniu's live broadcast transaction amount and write-off amount have exceeded the full year of 2023, and the contribution of the live broadcast channel to the company's overall business continues to increase.

02

cross-border growth

the continuous expansion of china’s visa-free “circle of friends” has stimulated the vitality of the inbound and outbound tourism market.deepening cross-border tourism business has become the common choice of these three otas, and their performance was particularly outstanding in the second quarter.

let’s first look at the inbound tourism market. the implementation of the 72/144-hour transit visa exemption policy and the improvement of entry convenience have made “china travel” popular around the world, and ota’s inbound and overseas platform business has grown accordingly.

jane sun, ceo of ctrip, said:in the first half of the year, ctrip's inbound tourism business bookings increased by 200% compared with the same period last year.ctrip chief financial officer wang xiaofan revealed in a financial report performance analyst conference call that with the development of ctrip's overseas business in southeast asia, japan, south korea, europe and the united states, ctrip international achieved a year-on-year revenue growth of approximately 70% in the second quarter, contributing approximately 10% to 15% to the group's total revenue.

regarding the profit margins that investors are concerned about, wang xiaofan said that the international version of the brand will continue to prioritize growth while closely observing the profitability of each market. however, given the huge growth opportunities in the international market, they will continue to invest in this brand."ctrip's advantage lies in its abundant local guide and hotel resources in china. however, the key to expanding its scale is to let foreign tourists know and use ctrip's international version."

the overseas market has become a battleground for all otas.

for example, tongcheng travel, which previously focused more on the domestic market, has begun to pave the way for future development by strengthening its overseas supply chain layout. tongcheng travel has established its overseas headquarters in singapore and launched the international travel booking platform hopegoo. the platform's services cover six areas: air tickets, hotels, train tickets, tickets, boat tickets, and local entertainment, and supports payment in 16 currencies around the world.

the proactive internationalization strategy has quickly brought good performance returns to tongcheng travel. according to tongcheng travel's financial report, in the second quarter, its international air ticket volume hit a record high, with a year-on-year increase of more than 160%; and international hotel room nights increased by nearly 140% year-on-year.

let’s look at the outbound tourism market.with the recovery of related industrial chains such as international routes and the increase in the number of countries with mutual visa exemption, the recovery of the outbound tourism market is accelerating.

ctrip mentioned in its financial report that domestic users' business of booking overseas hotels and air tickets has fully recovered to the same level as the same period in 2019.

now,chinese tourists have more diverse choices of overseas destinations.if you want to expand your presence in the outbound travel market, you need to obtain better quality resources.during the reporting period, tongcheng travel reached cooperation with the serbian national tourism board and the portuguese national tourism board. at the same time, it also targeted the young group and jointly launched the "korea youth easycard" designed for young chinese tourists with the korea tourism organization. this series of customized travel experiences is not only fun, but also affordable.

since the beginning of this year, tuniu's "niuren special line" has continued to expand the coverage of outbound destinations such as southeast asia, central asia, the middle east and africa, europe, and the americas. for outbound short-distance travel, users can choose personalized and flexible product combinations such as free travel, semi-free travel, destination group travel, private tours, and 2-8 people boutique small groups; for outbound long-distance travel, group travel is still the market leader, but users can still choose travel products with in-depth experience, cultural characteristics, and the ability to visit multiple destinations at one time according to their preferences.

an industry insider told the reporter,the reason why these otas are working so hard to expand their resources is to make their products more segmented. nowadays, the more detailed the service population is, the easier it is to increase user stickiness.

03

technology helps

looking through the financial reports,research and development expenses are ctrip's largest expense.r&d expenses in the second quarter reached 3 billion yuan.where did this expense go?

at the earnings briefing, ctrip group co-founder and chairman of the board liang jianzhang and other company executives interpreted the financial report for the first time in the image of ai agent "digital twins" and communicated with investors.

"the use of ai agent in financial report meetings not only makes communication more attractive, but also demonstrates the application prospects of this technology," said liang jianzhang.artificial intelligence can enhance user experience and improve operational efficiency.“with large language models, we can analyze large amounts of data to understand user preferences, respond to unexpected events with adaptive recommendations, and provide customized itineraries that respond to each traveler’s unique interests.”

indeed,ai technology is optimizing products and services in multiple dimensions.for example, in the second quarter, from the perspective of after-sales service, the application of ai and big models improved the self-service resolution rate of customer complaints, saving nearly 10,000 hours of work time for manual customer service per day, which is equivalent to freeing up more than 1,000 customer service personnel per day.

"in the future, ctrip will continue to invest in ai technology to enhance user satisfaction," said liang jianzhang's "digital twin."

not long ago, tongcheng travel held a seminar related to digital transformation. at the meeting, tongcheng travel invited representatives from cultural tourism enterprises, scientific research institutions and other units to discuss innovative models of digital cultural tourism. in the view of bai zhiwei, chief marketing officer of tongcheng travel, with the rapid development of digital technology, the cultural tourism industry is undergoing an unprecedented transformation, and digital transformation is the core driving force for the high-quality development of the industry.

in fact, based on the platform's technological innovation capabilities, tongcheng travel has made many attempts to promote the digital transformation of cultural and tourism scenarios such as transportation, accommodation, scenic spots, and destinations.

tongcheng travel has participated in building the "travel in fujian" smart cultural and tourism comprehensive service platform. since its trial operation in july last year, it has had more than 2 million users and the transaction volume of cultural and tourism products has reached 180 million yuan; it has cooperated with changbai mountain to create the "changbai mountain one-device travel" platform to provide users with a one-stop travel experience for ticket purchase, catering, accommodation, travel, and shopping; it has participated in the digital practice of traditional cultural and tourism enterprises in quzhou, zhejiang, and through a series of actions such as basic transformation, system transformation, process standardization, and data collection, it has helped oriental group improve efficiency and save more than 30 million yuan in costs... as of august this year, tongcheng travel's digital platform has served more than 200 related tourism agencies.

the reporter noted thatafter the second quarter financial reports were released, several investment banks and brokerage firms gave these otas "buy" or "increase holdings" ratings.what they value is not only the growth of the platform's core business volume, but also the second growth curve gradually formed by new businesses, which includes the platform's technological exploration.

tuniu expects its net income to grow 3% to 8% year-on-year in the third quarter of this year; hsbc predicts that tongcheng travel's net profit in the third quarter will be 831 million yuan; morgan stanley's report said that ctrip's third-quarter profit is expected to increase both year-on-year and quarterly... whether such optimistic expectations can be sustained, the lively and challenging summer vacation has provided part of the answer, and the performance of ota in september, the off-season for tourism, is also particularly important.