The Zhitong Finance App learned that Dongxing Securities released a research report stating that the May 1st holiday is approaching, and multiple platforms such as Ctrip, Tongcheng, and Where to Go will publish travel reservation data reports. At this stage, demand for travel continues to be released after the epidemic, compounded by the rise of leisure and leisure consumption, and the tourism market remains booming. Especially in the context of the gradual recovery of the consumer market, the travel chain is expected to maintain a relatively dominant position, and targets related to the OTA, scenic spots and hotel sectors in the travel industry chain are expected to benefit as a whole. Among them, the OTA sector is benefiting from the overall recovery of the travel chain, and the recovery of outbound travel and group travel will further provide upward flexibility. The pandemic has accelerated the increase in the online travel rate, and OTA data performance is superior to the overall level of the industry.

Dongxing Securities's main views are as follows:

Demand for travel continues to be released, compounded by the rise of leisure and self-indulgent consumption. The domestic travel market continues to be booming, and the long-term travel and sinking markets are structurally dominant

Looking at the travel market as a whole, the May Day travel market is expected to remain booming this year. According to Ctrip data, the popularity of “May Day” tourism increased steadily this year from last year's high level, and the popularity of domestic hotel and airline ticket searches increased compared to last year. According to data from Where to Go, ticket bookings for popular cities during the “May 1st” holiday have increased rapidly since April 6. The number of single-day reservations has already surpassed the same period in 2023, and the number of travelers during the “May 1st” holiday is expected to reach a new high. Looking at the travel structure, the long-term travel and sinking market is expected to have an advantage structurally.

According to Ctrip data, medium- to long-term travel dominated during the “May 1st” period, and domestic long-distance travel orders accounted for 56%. According to Tongcheng travel data, the May Day medium- to long-term travel grew rapidly, and tourist travel distance and number of travel days increased significantly. Since the release of the epidemic, residents' travel needs have become more inclined to enjoy themselves, and are actively exploring and paying attention to domestic characteristic, personalized, and niche destinations. Local cultural tourism departments are also actively creating momentum to improve the quality of tourism projects, create localized characteristics, improve supporting infrastructure, and promote the development of the local cultural tourism economy. Niche tourist destinations such as Zibo, Harbin, and Tianshui in Gansu are in the spotlight. According to Ctrip data, cities such as Tianshui, Xuzhou, and Zibo became the fastest growing cities for the May 1st holiday this year. Residents of the sinking market destination and the town performed brilliantly.

According to Ctrip data, the tourism market in Tier 4 cities and below, especially in the county area, grew significantly. Hotel reservation orders in the May 1st holiday county market increased 68% year on year, and ticket orders for scenic spots increased 151% year on year, which is higher than the national market. Travel reservation orders for users in Tier 4 cities and below increased by 140% year over year, which is significantly higher than that of higher-tier cities. The exploration and exit of the sinking market and niche destinations has enriched the supply of domestic tourism resources, supported the high level of attention in the tourism market, and provided incremental momentum for the travel boom.

Outbound travel is on the fast track, and short-distance outbound travel is the main destination

Judging from travel platform data, spring and autumn travel data shows that during the May Day holiday this year, the number of outbound travel bookings nearly tripled over the same period last year. According to Ctrip's visa data, judging from the current number of applicants, the number of applicants during the “May 1st” holiday increased by more than 30% over the same period last year, and the transaction amount has already exceeded the same period in 2019. Data from Tongcheng and Tuniu also shows that the May Day outbound travel market is growing rapidly this year. The travel radius for outbound travel is still recovering at a short and long pace, and short-distance outbound travel is relatively popular. According to Spring Airlines data, outbound flight bookings during the “May 1st” period were mainly concentrated in Singapore, Thailand, Japan, South Korea, etc. Looking at the whole year, outbound travel is on a rapid recovery path. The China Institute of Tourism Research predicts that the number of outbound travelers is expected to reach 130 million in 2024, an increase of about 50% over the previous year, and return to about 84% in 2019 (56% recovery rate in 2023).

Investment Strategy:

(1) OTA sector: Benefiting from the overall recovery of the travel chain, and the recovery of outbound travel and group travel will further provide upward flexibility. The pandemic has accelerated the increase in the online travel rate, and OTA data performance is superior to the overall level of the industry. Examples include Ctrip Group-S (09961), which has a stable domestic market and rapid restoration of outbound travel business, and Tongcheng Travel (00780), which has an advantage in the sinking market and is actively expanding travel agencies and international business.

(2) Scenic area sector: On the one hand, high-quality natural scenic spots with cost-effective advantages and good fundamentals are expected to maintain high prosperity, such as Jiuhua Tourism (603199.SH), Lijiang Shares (002033.SZ), and Sante Ropeway (002156.SZ); on the other hand, artificial scenic spots with high price flexibility, strong business replication, and wide epitaxial nature are expected to benefit in the medium to long term, such as Songcheng Performing Arts (300144.SZ) and Tianmu Lake (603136.SH).

(3) Hotel sector: In the short term, hotels have both tourist demand and business demand. Tourism demand remains high, and focus on the pace of recovery in off-holiday business demand. In the long run, hotels are highly resilient sub-tracks in the travel chain, and their business is highly standardized and highly replicable. Leaders are actively expanding stores and enjoying the dividends of increased chainization rates and concentration after the epidemic. Currently, the valuation of leading hotel groups is at a historically low level, with both allocation value and recovery flexibility. Focus on Huazhu Group-S (01179), Jinjiang Hotel (600754.SH), and First Travel Hotel (600258.SH).

Risk warning: Consumption capacity continues to be weak, and macroeconomic recovery falls short of expectations.