The Zhitong Finance App learned that Guolian Securities released a research report saying that travel demand was strongly released in 23 and continued in 24, and the number of domestic travelers recovered to 119.1%/109.4%/119.0% in '19, May 1st, '24 New Year's Day/'24 Spring Festival, respectively. The Spring Festival holiday and Spring Festival travel data confirm the strength of the will to travel. Referring to the US travel recovery performance, the strength is expected to continue, but there may be differences during the off-peak season. The operating performance of various scenic spots in 2023 has verified the appeal of strong IP and strong marketing to passenger flow, and operating leverage is also reflected in the implementation of performance. Looking ahead to 2024, it is recommended to focus on individual stocks that have the potential to grow in passenger traffic and that still have room to unleash their profitability.

The main views of Guolian Securities are as follows:

Japan Travel Tips:

The scale has shrunk, and tourism consumption with excellent performance in individual tours/natural attractions has a procyclical nature. After the weakening of the Japanese economy, the scale of domestic tourism revenue also peaked around 1991. Since then, along with the reduction in per capita expenditure, the scale of domestic travel revenue has shrunk to 86.5% in 1991. Although the total volume has shrunk, there are still structural highlights. Judging from the purpose of travel, while group trips have decreased, individual trips with family, friends, etc. have increased; moreover, individualized and diversified travel behavior has been prominent. Since the 1990s, natural attractions and hot spring tours have increased.

Characteristics of post-pandemic tourism: strong release of desire to travel

Travel demand was strongly released in '23, and continued in '24, with the number of domestic travelers returning to 119.1%/109.4%/119.0% in '19 for May 1st, '24 New Year's Day/'24, and Spring Festival in '24, respectively. However, due to the impact of the economy, there has been a deviation between volume and price, and the increase in volume and price has continued to reduce travel performance over the past 23 years. Travel consumption after the epidemic showed new characteristics under the influence of strong travel intentions and weak economic recovery. For example, famous mountains, Dachuan/long-distance travel destinations took the lead in recovering with IP endorsements; under the concentrated release of travel demand, consumers took shorter decision times and were more willing to pay for emotions/scenarios. Emerging destinations took turns to share traffic under IP conversion/policy strengthening.

Exploring Performance from a Microscopic Perspective: New Rookie Highlights

Scenic spots are more dependent on newly-needed businesses such as tickets, ropeways, and sightseeing buses, and with rational consumption, revenue recovery from these forms of immediate demand is higher. Combined with historical data estimates, the operating leverage of the scenic ticket and passenger transport business is higher, which can more leverage the increase in profitability. The multiple logic of passenger flow attraction+revenue realization+operating leverage+cost reduction and efficiency was implemented to the 2023 results, and Changbaishan leveraged 187% profit recovery with 109% turnout recovery. Continuing the cost-performance trend, there are still bright spots in scenic area management, such as Jiuhua Tourism (603199.SH), Mount Emei A (000888.SZ), Songcheng Performing Arts (300144.SZ), Huangshan Tourism (600054.SH), Sante Ropeway (002159.SZ), and Tianmu Lake (603136.SH).

Risk warning: risk of macroeconomic growth slowing; risk of unwillingness to travel falling short of expectations; severe weather exceeding expectations.