Tongcheng Travel Holdings Limited, a pioneer and industry titan in China’s online travel sector, has released its unaudited consolidated results for the three months ending March 31, 2023. HONG KONG SAR.
Highlights from 2023 Q1 With 2022 Q1 Year-over-Year Comparison
- Strong Rebound in Revenue and Profit.
- To RMB2,586.1 million, revenue climbed by 50.5% over the previous year.
- The adjusted EBITDA margin grew from 25.5% in the first quarter of 2022 to 28.3%, representing a 67.0% year-over-year rise to RMB732.2 million.
- The period’s adjusted net profit rose 105.6% year over year to RMB503.6 million, and the adjusted net margin grew from 14.3% in 2022 Q1 to 19.5%.
Average MPU and MAU numbers have reached record highs.
- Average monthly active users (“MAUs”) climbed to 286.1 million, up 16.9% from the previous year.
- Average monthly paying users (“MPUs”) climbed to 41.4 million, up 30.6% from the previous year.
- Paying ratio increased to 14.5% from 12.9% in 2022 Q1.
The removal of pandemic limitations in early 2023, according to Mr. Ma Heping, Executive Director and Chief Executive Officer of Tongcheng Travel, “has resulted in an outstanding recovery of China’s domestic travel sector. We are happy to have met the long-unmet market demand and set all-time highs for business revenue in the first quarter of 2023, thanks to the strategic planning we did in earlier years that allowed us to continue growing even in the face of the pandemic. We have expanded our capacity for innovation, broadened our user base, and extended our reach into non-first-tier locations. We are well-positioned to benefit from the market recovery because to our adaptable and extremely effective methods that react quickly to market shifts. We anticipate stable consumer demand and have faith in our ability to beat the market with further expansion.
Reservations for lodging and transportation reached record highs.
Both of the Group’s two key businesses—reserving hotel rooms and purchasing tickets for transportation—reached record highs during the time period under consideration. The record high in overall ticketing volume helped to create a 35.9% year-over-year growth in revenue from transportation ticketing services to RMB1,382.7 million. The lodging industry saw significant growth, with revenue rising by 53.6% on a yearly basis to RMB834.3 million. Additionally, the number of hotel nights sold reached a record high and increased by almost 130% from the same time in 2018 to 2019. Other revenue climbed by 134.1% year over year to RMB369.2 million, including revenue from advertising services, membership services, corporate travel services, supplementary value-added user services, hotel management services, and attraction ticketing services.
Businesses in hotel management and packaged tours as New Growth Drivers
Tongcheng Travel developed organically and via acquisitions to create new growth opportunities. Following the acquisition of certain conventional travel agency firms, it extended the hotel management company coverage under a thorough brand matrix and began to build its own package tour business. The group’s entry into the domestic and international leisure travel markets is anticipated to come through the package tour industry.
Developed new scenarios and also tapped into the Tencent ecosystem to diversify user traffic
Through both online and offline traffic channels, Tongcheng Travel kept expanding its user base and varying the sources of user traffic. In order to improve user experience, it expanded the services through Weixin Search (), which includes hotel booking, transit ticketing, and tourist attraction tickets. It offers simple and convenient access. The Company has created use scenarios by leveraging the ecosystems of mobile makers, short-video platforms, APPs, and others while expanding its reach within the Tencent ecosystem. In order to attract customers from non-tier-one cities, it established alternate ways to tap into new situations like buses, metro, and intra-city buses. It also collaborated with hotels to redirect people to its platform using QR code scanning.
Enhanced Efficiency with Technology and Advanced Digitization
Tongcheng Travel investigated the viability of implementing Artificial Intelligence Generated Content (AIGC) in operations with regard to customer service, product development, and content management in order to further boost user happiness. Additionally, it improved its Huixing system, which provides intelligent travel solutions, to help consumers plan their journey more effectively at busy times when resources are limited.
Tongcheng Travel worked to further the industry’s digitalization while also enhancing its own capabilities. Through its extensive range of hotel PMS brands, it offered Software-as-a-Service (SaaS) solutions to more independent, chain hotels and alternative lodgings to assist them in enhancing operational efficiencies. By utilising its big data capacity and regional tourist resources, Tongcheng Travel formed strategic partnership with Yichang Sanxia Airport to promote it as the hub airport in southwest Hubei Province. Additionally, by creating transit goods for them, it helped rural airports in Inner Mongolia increase throughput.
The “Tongcheng Thousand Villages Programme” developed village tourism.
Tongcheng Travel is committed to generating socially responsible value for its stakeholders and society at large as a socially responsible business. To support the growth of the local green economy and assist additional communities in creating sustainable tourist models, it introduced the “Tongcheng Thousand Villages Programme”. Additionally, Tongcheng Travel established “Tongcheng Rest Stops” for outdoor workers and offered special customer care for the deaf. These initiatives were named one of the top 10 “Excellent Cases of Corporate Initiatives 2023” by the China Consumers Association.
Strong Rebound Over the Labour Day Weekend
The travel business in China is now recovering. The Ministry of Culture and Tourism’s data centre estimates that over the course of the 2023 Labour Day holiday, 274 million domestic tourist trips were made, an increase of 70.8% year over year and a recovery of up to 119.1% of the same period in 2019. The robust recovery was an unmistakable indication of people’s love for travel.
“We have high hopes for the future growth of China’s tourism sector. The infrastructure associated to tourism will greatly improve, especially in non-tier-one cities, providing a larger variety of services to the travel sector and more convenience to travellers. Consumer behaviour has changed fundamentally as a result of the pandemic, as seen by the growing appeal of short-haul vacations and staycations, which, in our opinion, will continue to fuel the travel industry’s expansion. By using our competitive advantages in diverse user traffic sources, a strong market position, a flexible operating strategy, and cutting-edge technology skills, we are convinced that we can outperform the market, Mr. Ma stated.
Tongcheng Travel will keep growing both its user base and its user traffic sources. Additionally, it will help to further enhance goods and services to meet customer expectations. In order to create long-term sustainable value for its stakeholders and communities, it will also investigate prospects for local and international company expansion and investment that align with its strategic goals for future business growth.
Travel Holdings Tongcheng Limited
For all of a user’s travel requirements, there is Tongcheng Travel. With the goal of “making travel easier and more enjoyable,” Tongcheng Travel provides a comprehensive and cutting-edge range of goods and services that nearly all aspects of travel, such as booking lodging, tickets for tourist attractions, package tours, self-guided tours and cruises, as well as a variety of transportation and leisure travel scenarios, primarily through its ten online platforms.
Tongcheng Travel, a tech-focused business, uses big data and AI to better understand customer preferences and behaviours in order to provide them with specialised goods and services. Tongcheng Travel has strategically targeted lower-tier Chinese cities and taken advantage of prospects there thanks to its varied traffic sources, capacity for product innovation, and adaptable operational techniques. Tongcheng Travel has transformed customer expectations for the online travel business with a thorough grasp of user experience and cutting-edge technical capabilities, making the entire travel experience more easy, individualised, and pleasant than before. In order to transition from an online travel agency to an intelligent travel assistant, Tongcheng Travel plans to develop and use its cutting-edge technologies.
Source: traveldailynews