On August 27th, Ctrip Group (NASDAQ: TCOM; Hong Kong Stock Exchange: 9961) announced its unaudited financial results for the second quarter of 2024. In the second quarter, benefiting from the recovery of outbound tourism and the sustained growth of domestic tourism, Ctrip achieved a net revenue of 12.79 billion yuan, a year-on-year increase of 13.5%. A net profit of 3.89 billion yuan was recorded, which is six times that of the same period last year, but decreased by 10% month on month.
At the financial report conference, Ctrip Group's co-founder and chairman of the board, Liang Jianzhang, CEO Sun Jie, CFO Wang Xiaofan, and other company executives communicated with investors for the first time in the image of AI agents. Liang Jianzhang stated, "The use of AI agents reflects our firm commitment to innovation and the adoption of new technologies to drive the transformation of the tourism industry." At the conference, Liang Jianzhang's "Digital Twins" also introduced Ctrip's specific achievements in applying AI - two content products, namely "Travel Hotspots" and word-of-mouth rankings, which are based on AI driven and integrated user search data and real evaluations.
Liang Jianzhang, co-founder and chairman of Ctrip Group, interprets the financial report as a "digital twin".
GMV of exhibition and performance tourism products increased by over 70% year-on-year
In the second quarter, Ctrip's four major businesses all achieved varying degrees of growth: among them, the accommodation booking revenue was 5.1 billion yuan, up 20% year-on-year and 14% month on month, mainly due to the increasingly strong tourism demand during holidays. The revenue from transportation ticketing was 4.9 billion yuan, an increase of 1% year-on-year. However, the financial report mentioned that despite the strong growth in transportation ticketing bookings, this revenue decreased by 3% month on month due to fluctuations in ticket prices in the second quarter of 2024.
During the same period, the operating revenue of tourism and vacation business was 1 billion yuan, a year-on-year increase of 42% and a month on month increase of 16%, mainly attributed to the increasingly strong tourism demand during holidays. The operating revenue of business travel management was 633 million yuan, up 8% year-on-year, mainly due to the growth of business travel orders, up 24% month on month, mainly attributed to seasonal effects.
In the second quarter, while maintaining a historically high base, the domestic tourism market showed a trend towards diversified destinations. It is reported that in response to this change, Ctrip has partnered with 27 "C-brand cities" in multiple provinces and 22 domestic airports to carry out joint marketing, brand promotion and other activities, enhance the linkage of trunk and branch flights, drive tourists to discover and check-in at more treasure destinations, and achieve a significant increase of 1-2 times in the number of tourists in cities such as Quanzhou, Zibo, Luoyang and Anshan compared to the same period last year, with a 30% increase in ticket sales at related airports.
Since last year, the domestic tourism market has maintained a high base, and seeking incremental growth has become a focus of industry attention. In order to provide differentiated services for different users and explore new growth points, Ctrip has previously launched the "Friends Club" brand targeting the silver haired population who are "rich and idle" and increasingly inclined towards customized tours and private groups. It has cooperated with more than 1600 hotels in more than 40 popular destinations across the country, providing over 4000 hotel+package products to meet the travel needs of the silver haired population with exclusive products and services. According to financial reports, as of now, the GMV of Ctrip's Friends Club has reached 1.6 billion yuan. In the second quarter, Ctrip's Friends Club also launched the "Family Card" function, allowing young family members to book travel products on behalf of the silver haired population, which is expected to further drive the overall transaction scale to increase.
For young people who are passionate about sharing and pursuing emotional value, Ctrip has partnered with domestic and foreign partners to deepen the development of new tourism products such as "exhibitions+travel", covering scenarios such as concerts, music festivals, exhibitions, events, and film festivals, and launching services such as tickets+hotels and tickets+transportation. The financial report shows that in the second quarter, Ctrip's exhibition tourism products achieved a year-on-year growth of over 70% in GMV. It is reported that with the strong demand for cross-border tourism, exhibition tourism products have expanded to overseas markets such as Japan, South Korea, Singapore, and Thailand.
Inbound tourism contributes 25% of overseas platform revenue
Cross border tourism is a major highlight of the tourism market and has also driven significant growth in Ctrip's business. According to statistics, in terms of outbound travel, Ctrip's outbound hotel and flight bookings fully recovered to the same period in 2019 in the second quarter. The inbound tourism business contributed 25% of Ctrip's overseas platform revenue, and various entry facilitation measures drove the China Travel craze. Ctrip's inbound tourism bookings in the first half of the year increased nearly twice year-on-year. Combined with the development of Ctrip's overseas business in local markets such as Southeast Asia, Japan, South Korea, Europe, and America, the revenue of Ctrip's overseas platform in the second quarter increased by about 70% year-on-year.
Liang Jianzhang cites Ctrip's artificial intelligence product Trip According to Trends data, the newly opened international routes have greatly increased tourists' interest in related destinations. "In the past three months, the search volume for corresponding destinations on new routes has doubled or more. At the same time, in the first half of the year, Ctrip's inbound travel bookings increased by 150%, and it is worth noting that tourists from visa free countries surged by 190% during the same period
The stock price trend of Ctrip.
Sun Jie explained at the financial report conference that "China's tourism consumption demand is still strong," and "many users are using their visas to travel around the world, which partially offsets the pressure of ADR (average income per room per night) with the rise in overseas prices, so we have achieved quite stable growth. From the search volume, we have found that more and more users are interested in exploring domestic and international destinations in depth, so in the long run, tourism is still a powerful industry, and we need to provide better products and services
In terms of summer performance, hotel bookings have exceeded the same period in 2019 by 110% to 120%. Our performance has always been 20% to 30% higher than the market, "Wang Xiaofan said at the financial report conference. It is expected that tourism activities in the second half of the year will generally follow a normal seasonal pattern. Due to the high base of the same period last year, the year-on-year comparison data after the National Day holiday will be more anticipated.