How long can we stay in the "comfort zone" of the sinking market?

It’s the financial reporting season again. The financial reports of OTA giants Ctrip, Tuniu Travel and Tongcheng Travel, which have entered the capital market, reflect the new changes in the tourism market last year.

According to data from three financial reports, the "first brother" Ctrip's net loss was 550 million yuan, compared with a loss of 3.2 billion yuan in 2020, the loss began to narrow; more than 60% of revenue relies on outbound travel Tuniu , as the overseas epidemic situation is still not optimistic, it is still stuck in the quagmire of losses; while Tongcheng Travel, which had not shown any success before, has achieved sustained profits.

Especially Tongcheng Travel, its actions in the sinking market have provided support for its continued profitability. However, it should also be noted that Tongcheng Travel’s high growth is based on a smaller base and the empowerment of Tencent’s ecosystem. With Ctrip’s U-turn and downward trend, it’s time for Tongcheng Travel to step out of its “comfort zone”.

OTA’s financial report is also a barometer of the tourism market. In the past few days, OTA giants such as Ctrip, Tuniu, and Tongcheng have released financial reports, bringing a touch of warmth to the travel market.

On March 24, Ctrip Group announced its financial results for the fourth quarter and full year of 2021. The financial report shows that Ctrip Group’s net operating income in 2021 was 20 billion yuan, a year-on-year increase of 9%; the net loss attributable to the group’s shareholders was 550 million yuan, which was significantly narrower than the loss of 3.2 billion yuan in 2020.

Compared with Ctrip’s narrowing of losses, Tuniu, whose outbound travel products account for 60%-70% of its total business volume, suffered heavy losses in the face of the uncontrollable overseas epidemic. In 2021, Tuniu's net revenue was 426 million yuan, a year-on-year decrease of 5.3%; its net loss was 129 million yuan, which was significantly narrower than the loss of 1.3 billion yuan in the same period last year. For Tuniu, which is hovering on the verge of delisting, this is the year with the lowest losses since Tuniu went public, which may be considered good news.

Same-journey travel has become the highlight of OTA’s financial reporting season. On March 22, Tongcheng Travel released its fourth quarter and full-year performance reports for 2021. Tongcheng Travel achieved annual revenue of 7.54 billion yuan, a year-on-year increase of 27.1%; adjusted net profit was 1.3 billion yuan, a year-on-year increase of 35.9%.

In this financial report, the average monthly activity of Tongcheng Travel became the highlight of the financial report. The report shows that throughout 2021, the average monthly active users of Tongcheng Travel have reached 260 million, a year-on-year increase of 34.2%; the annual paying users have reached 200 million, a year-on-year increase of 28.2%, setting a record high.

From the perspective of the industry, the growth of Tongcheng Travel under the epidemic situation can be summarized in three points.

First, Tongcheng Travel is deeply integrated with the Tencent ecosystem, and has a WeChat portal with 1 billion traffic, which continues to provide a stable source of traffic for Tongcheng Travel. Data shows that in 2021, about 80.7% of the average monthly active users of the Tongcheng travel platform came from WeChat mini programs.

Second, Tongcheng Travel has increased its investment in hardware in lower-tier markets and provided barrier-free services for people with generation gaps with the Internet, such as seniors, effectively activating the consumption needs of this group of people.

Third, through creative marketing activities such as "air ticket blind box", it began to please the main force of travel of Generation Z and gained the favor of new consumer groups.

Of course, people who have no long-term worries must have immediate worries. For Tongcheng Travel, the better financial report data also has objective reasons such as small basic market and weak user quality.

Based on the basic market, Ctrip’s net operating income this year was 20 billion yuan, a year-on-year increase of 9%. The accommodation booking revenue of 8.1 billion yuan alone exceeded the annual revenue of Tongcheng Travel. The high growth of travel is somewhat unsatisfying to Ctrip’s fundamentals.

In terms of user quality, the number of Ctrip users is concentrated in first- and second-tier large and medium-sized cities. Their order consumption level is high and the frequency of travel and business trips is stable.

For Tongcheng, users in lower-tier markets rely on Tencent to attract traffic, which reflects that there is a certain generational gap between these customers and Internet life.

Data shows that as of December 2020, the online travel APP installation coverage rate for mobile phone users in domestic third-tier and below cities is only 18%, which is far lower than the 51.3%, 36.1% and 27.2% of first-tier cities, new first-tier cities and second-tier cities.

"There is a big gap between Tongcheng users in these long-tail markets and Ctrip in terms of sustainable consumption and premium space." Industry insiders said bluntly.

A hotel observer believes: "Objectively speaking, Tongcheng has also played the role of OTA 'evangelist' in the sinking market, allowing more people to accept online services." But the observer He also said frankly that compared with other OTAs, the inability to complete the "weaning" of Tencent's ecosystem leaves great uncertainty in the future.

At present, the process of "tearing down the wall" of Internet companies is accelerating. Recently, Taobao is testing WeChat payment internally, which is regarded by the Internet as a landmark event in tearing down the wall. In the future, when the demolition of the wall is over, Alibaba’s Fliggy, Ctrip, and Meituan are likely to increase their investment in WeChat mini programs and other ecosystems. By then, what advantages will Tongcheng Travel, which is the secondary entrance to WeChat services, still have?

It is foreseeable that in the future, the sinking market will usher in the "close combat" of OTA giants.

"The wind will extinguish the candle, but it will make the fire burn brighter. The same goes for randomness, uncertainty and chaos: you have to use them, not avoid them."

< p> In the complex environment, although the OTA platform encounters difficulties, it also promotes its evolution. At present, many OTA platforms have also realized that when they are in the simple transaction matching stage, they can reconstruct greater value barriers through digitalization, that is, by empowering the entire industry chain, establishing an inclusive business ecosystem, and bringing more value to the industry. It brings value back to myself.

Tongcheng, which planned to enter the sinking market in advance, briefly found the "comfort zone" and brought brilliant financial reports to Tongcheng Travel. However, if it does not escape the "comfort zone", it is likely to be lost. Chance to go.

Currently, OTA giants use the digital tools of the platform to "transfuse" and increase the in-depth exploration of supply chain resources, bringing new traffic and substantial revenue growth to merchants, which has become the unanimous choice of everyone.

Tongcheng Travel also does a good job in this area. On December 15 last year, Tongcheng Yilong announced that it would change its name to Tongcheng Travel. The original eLong brand has also been retained, and efforts have been made to develop the accommodation industry chain.

Why should we develop the accommodation industry chain?

On the one hand, the hotel business is closely related to Tongcheng Travel’s main business. Tongcheng Travel's focus on hotel business can not only form a good synergy with its travel business, but also be an important supplement to its accommodation business, which will help Tongcheng Travel find new growth points.

On the other hand, developing the hotel business can enhance the competitiveness of same-trip travel. For example, in the face of the operational problems existing in the hotel industry, Tongcheng Travel's PMS brands "Zhuzhe" and "Golden Swan" of Lvzhi Technology can provide SaaS solutions for small and medium-sized hotel groups and independent hotels to help them effectively Carry out operational management.

Although investment in hardware will establish corresponding business barriers, Tongcheng Travel not only has to compete with its original competitors, but also has to deal with new players with their own strengths, such as Meituan and Douyin. .

Take Douyin as an example. As a content output platform, Douyin can "plant" travel destinations to users through short video content, and then complete the entire transaction within Douyin. Meituan's wine travel is also an important part of local life, and Meituan can achieve traffic diversion through takeout, a high-frequency and urgently needed business, and achieve intra-site conversion of traffic.

Based on the above, it may be imminent for Tongcheng Travel to speed up the construction of its own traffic pool.

Coordinator丨Laodian Editor丨A Loach

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