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"you guys start comparing prices, i'll quote the lowest price." this summer, zhang fei, the owner of a guizhou travel agency, met a customer who pulled salespeople from several travel agencies into a group to compare prices. after communicating with his peers, he found that he was not the only one who had encountered such a thing.

a tour guide also complained that their travel agency took a tour group worth more than 40,000 yuan this year, but "only made 700 yuan."

"the tourism industry is so miserable this year. the industry is extremely competitive and everyone is here to compare prices," complained a tourism practitioner.

unlike the increasingly competitive situation of travel agencies, the financial reports of ota platforms are much better.

in the second quarter of this year, ctrip's net revenue was 12.8 billion yuan, a year-on-year increase of 14%, and its net profit attributable to shareholders was approximately 3.833 billion yuan, a year-on-year increase of 507.45%. liang jianzhang attributed this to "the strong growth in tourism demand, especially cross-border tourism demand."

in the same quarter, tongcheng travel achieved revenue of 4.25 billion yuan in the second quarter, a year-on-year increase of 48.1%, setting a new record for single-quarter revenue; meituan's in-store hotel and travel business order volume increased by more than 60% year-on-year; tuniu's net profit in the second quarter reached 43 million yuan, compared with only 220,000 yuan in the same period last year.

hotels and ota platforms are entering an era of competition and cooperation with a more subtle relationship.

in early september, a short internal essay by qi ji, founder and ceo of huazhu group, pointed out the conflict of interest between hotels and otas: many stores are too dependent on the group's existing members and central channels, and have gradually lost their ability to sell and expand their customer base.

as a result, under performance pressure, store managers made various concessions to otas in order to increase occupancy rates, "offering prices lower than member prices", resulting in a large portion of the store's orders coming from otas.

in the long run, the hotel's profits will inevitably be diluted. what's more serious is that this is equivalent to giving up the pricing power, which is obviously a red flag for hotels. in fact, the dispute between hotels and otas is not new.

in 2015, huazhu terminated its cooperation with several ota platforms including ctrip because ota violated the principle of optimal price on huazhu's official website, resulting in price inversion. "the cooperation was interrupted until the 'intermediary prices were sorted out.'" in the end, the dispute ended with ota readjusting prices.

so why did the conflict between the two sides break out again this year? judging from the second quarter and first half financial reports released by domestic hotel listed companies, high-end hotels and chain hotels are not having a hard time, but the crisis has gradually emerged.

in the first half of this year, the comprehensive adr (average daily rate) of atour, huazhu, jinjiang and btg hotels all decreased year-on-year. as the industry becomes more competitive, hotels naturally pay more attention to the income taken from their pockets by ota platforms - in the second quarter of this year, ctrip's accommodation booking revenue was 5.1 billion yuan, up 20% year-on-year and 14% month-on-month.

similar to the e-commerce industry, the tourism industry is also quietly engaged in a price war.

according to shi xiang’s report, meituan has a price tracking system in its backend. once the system finds that the price on its platform is higher than that on ota platforms such as ctrip, it will automatically change the price to the lowest price on the entire network.

zimubang (id: wujicaijing) found that the hotel category in ctrip’s zhixing app will directly compare prices on the page, "tongcheng xxx yuan, mo naer xxx yuan, elong xxx yuan.

the tourism industry, which is experiencing an intensification of internal competition, is entering a cycle of increasing quantity without raising prices.

"this summer, both the average price per customer and the occupancy rate are hard to describe," said a villa hotel owner in guangdong. "before, the average price was 2,000 yuan and people were scrambling to get it, but now it's 800 yuan and you have to chat on wechat for a few days."

judging from travel data, people are not stopping traveling. on the contrary, mass tourism demand is growing: from january to august 2024, the national railway carried nearly 3 billion passengers, a year-on-year increase of 14.5%, setting a record high for the same period in history; in the first half of the year, the number of domestic tourists was 2.725 billion, a year-on-year increase of 14.3%, and the total travel expenditure of domestic tourists was 2.73 trillion yuan, a year-on-year increase of 19.0%.

but everyone's travel budget is tightening. according to huazhu china's data, in the second quarter, its comprehensive adr (average daily rate) was 296 yuan, a year-on-year decrease of 2.9%; occ (occupancy rate) was 82.6%, a year-on-year increase of 0.7 percentage points; revpar (average revenue per available room) was 244 yuan, a year-on-year decrease of 2%.

in other words, the workload of hotels has increased, but their income has decreased. "many hotels do not raise prices during the summer vacation," said the above-mentioned tourism practitioner.

of course, the year-on-year decline in average daily room rates is related to last year's strong demand and high base. when supply relations gradually recover this year, a decline in hotel prices is also inevitable.

travel agency sales are the first to feel the tightening of public budgets, hotels are the first group to be affected, and the impact will eventually be transmitted to otas that are deeply tied to hotels.

sun mengqi, an analyst at bocom international, believes that data after may day show that the decline in mainland hotel prices is higher than previously expected. it is expected that hotel prices will fall by about 10% in the second quarter, and the trend may continue into the third quarter, and will see marginal improvement in the fourth quarter. "therefore, we maintain our expectation of single-digit growth in ctrip's mainland business for the whole year."

in fact, although ctrip's net profit in the second quarter of this year increased by more than 500% year-on-year, its revenue growth was not too high, at 14%, lower than the year-on-year growth of nearly 30% in the first quarter of this year.

not only hotels, but also air ticket prices are falling. after the release of the first quarter financial report this year, ctrip group cfo wang xiaofan said that he had observed a decline in the adr of domestic hotels in recent months. in addition, the increase in hotel and airline supply has also put pressure on short-term prices, especially compared with last year's high base, he analyzed.

in the second quarter of this year, ctrip's transportation ticketing revenue was 4.9 billion yuan, up 1% from 4.814 billion yuan in the same period last year. ctrip explained that this was due to fluctuations in air ticket prices.

gangtise investment research previously quoted an ota analyst as saying that the annualized growth rate of the ota sector is expected to be 9-10% in 2024. the passenger transport market is highly fragmented, and the price markup rate of ctrip and tongcheng services is not high, so the market space is limited.

obviously, after the retaliatory tourism consumption, ota platforms are facing growth pressure.

the above analyst also mentioned that the competition landscape in the ota market is relatively stable, and ctrip, meituan, tongcheng, and fliggy each have stable sources of traffic.

judging from the scale of traffic, the internal structure of ota is also changing.

according to questmobile data, in june this year, the total number of users of tongcheng travel, fliggy, mafengwo, and meituan homestay all showed a year-on-year decline, among which mafengwo's traffic decreased by 40.2% year-on-year and fliggy travel's traffic decreased by 15% year-on-year.

ota platforms are experiencing their own growth problems.

the decline in mafengwo’s traffic is related to its product form. the internet industry has long entered the era of super apps, and the era of small and beautiful vertical products has ended. xiaohongshu and douyin have already entered the tourism content track where mafengwo is located. the niche products of the past are eventually gradually forgotten.

as for fliggy travel, it recorded a lower growth than its peers in the context of alibaba's merger and division adjustments. alibaba's new quarterly financial report did not mention fliggy much. it was included in "other businesses" together with hema, gao xin retail and other businesses. in the second quarter of 2024, the revenue of other businesses increased by 3% year-on-year.

in fact, at the beginning of this year, fliggy launched a round of price war. in march, fliggy published an article titled "accept price comparison, buy at a higher price and get a refund! kyoto westin's "siege price" is here!", which kicked off the price comparison. however, since then, fliggy has not made any further moves in the price war.

in fact, the competition within ota is still mainly concentrated on the two giants, ctrip and meituan, as well as the latecomer douyin.

in 2023, douyin entered the hotel and travel industry, impacting the existing ota market. in july of that year, douyin life service made a series of organizational adjustments, one of which was to upgrade the hotel and travel business to a first-level department of douyin life service, parallel to the in-store business, led by xiang wentian, who reported directly to zhu shiyu, then president of douyin life service.

according to a report by guosen securities, douyin's hotel and travel business is still in the penetration and category expansion stage this year, and its gtv has grown rapidly. according to a report by juliang suansu, douyin's life service gmv increased by 256% year-on-year in 2023. looking at the business by business, the hotel and travel gtv had the highest growth rate of 435%.

however, douyin's share in the tourism market is still not high.

regarding the market share of ota platforms, the latest data comes from a report by bocom international. in 2019, ctrip's market share was 67%, which dropped to 54% in 2022, and meituan rose from 9% to 17%. in terms of market share, douyin's share is still not high, accounting for 2% in 2022. it is estimated that in 2024, ctrip will account for 57%, meituan will account for 15%, tongcheng will account for 13%, fliggy will account for 6%, and douyin will account for 3%.

in addition to market share, another important impact of tik tok on online travel is that it will reduce the profit margins of existing players, especially new entrants with abundant traffic and funds.

guosen securities pointed out that since 2023q2, meituan has taken the initiative to subsidize the business, and the operating profit margin of the in-store hotel and travel business has dropped from 48% in 2023q1 to 29% in 2023q4. "the competition from douyin has become an important factor affecting meituan's stock price."

but the good news is that the impact of new channels such as douyin on ota is decreasing.

at the end of march this year, there was news that bytedance planned to cancel its hotel and tourism business department and return to the life service model in 2022; it clearly stated that it would not adopt the ota (online travel agency) model, but would commercialize the content traffic field and sell traffic and merchant services.

however, the person in charge of douyin’s life service later responded that this was false news.

according to the data from the bytedance research institute, in january and february 2024, douyin's hotel and travel payment orders increased by 50% year-on-year. among them, scenic spots, hotel accommodation and travel agencies had the highest order volume, but the growth rate was relatively slow, and the penetration rate was high. although the order volume of airlines and city travel was small, it was growing rapidly.

this is also the reason why douyin adjusted the commission of the hotel accommodation category in the middle of the year. in 2022, douyin's local life business commissions were collectively increased significantly, among which the accommodation software service fee rate was increased from the previous 0.6% to 4.5%, and the following year it rose from 4.5% to 6%. in july this year, the software service fee of the accommodation sector rose to 8%, approaching the commission of at least 10% of platforms such as ctrip, meituan, and fliggy.

obviously, douyin has reduced its subsidies and offensive efforts on the accommodation category, shifting from seizing market share to increasing operating profits.

douyin's entry into the hotel and travel industry also faces challenges, one of which is the write-off rate. compared with catering, the write-off rate of hotels and travel, which have higher consumption costs, is much lower, and the live broadcast format itself has a low write-off rate compared to trading platforms.

a merchant who sells hotel and travel group purchase packages on douyin told alphabet list that the write-off rate for catering group purchases is generally around 70%, while the write-off rate for hotel and travel live broadcasts can generally only reach 20%.

guosen securities also pointed out that the relatively weak growth of douyin's gtv this year is not just a short period of pain caused by organizational adjustments, but more of a correct strategy based on the development stage. "as merchants gradually penetrate the market, douyin embraces its own product advantages and explores new differentiated businesses, rather than winning the competition through price wars."

the competitive impact of tik tok on ota platforms has been reduced. however, new channels such as content platforms are still competing with traditional otas.

at the same time as douyin raised the commission for accommodation, kuaishou launched a special support plan for direct-operated accommodation and hotel merchants in july and august this year. that is, new merchants in the travel, accommodation and hotel industries that joined the platform in july and august were exempted from commission for the first month, and the commission was collected first and then returned. after deducting the 0.6% payment channel fee, a 100% refund was given.

the relatively stable ota market continues to have new stories.