Original title: the third quarter financial report of China online Travel Company: who is happy and who is sad in the "post-epidemic era"?
Those who "study both inside and outside" win the world.
The monarch of market value
On December 2, Trip.com announced his unaudited financial results for the third quarter ended September 30, 2020. Trip.com is the fourth online travel company to hand over financial data in the third quarter after Cheng Yilong, Meituan and Tuniu Corp.
According to the financial report, Trip.com 's net operating income in the third quarter of 2020 was 5.5 billion yuan ($805 million), an increase of 73 percent from the previous month, leading the growth rate of domestic online travel companies. Thanks to the effective control of the epidemic and the recovery of inter-provincial travel, Trip.com 's domestic main business income has grown by more than double digits compared with the previous month.
In the third quarter, the net profit belonging to Trip.com shareholders reached 1.6 billion yuan ($234 million), realizing COVID-19 's first-quarter profit since the outbreak of the epidemic, and topping the list of net profits of Chinese online travel enterprises in that quarter. Trip.com 's operating profit margin reached 24%, ranking first among listed tourism enterprises in the world; excluding equity compensation expenses, operating profit was 1.3 billion yuan ($196 million).
Comparing the financial results of Cheng Yilong, Meituan, Tuniu Corp and Trip.com, we can see some positive changes in China's online tourism industry.
The performance of each platform varies.
Those who "study both inside and outside" win the world.
Looking at the third-quarter financial results handed over with Cheng Yilong, Meituan, and Tuniu Corp, we can see that OTA, which has ploughed deeply into the local area, has generally enjoyed the dividend of effectively controlling the epidemic in the Chinese market, giving better results than in the second quarter one after another; however, Tuniu Corp, whose main business is outbound and group tours, has been affected by the epidemic, and its financial performance is still under pressure.
Data show that Tongcheng Yilong achieved total revenue of 1.915 billion yuan in the third quarter, an increase of 59.5% over the previous quarter; adjusted EBITDA was 499 million yuan, an increase of 86.8% over the previous quarter, and profitability continued to grow. Meituan's third-quarter results show that revenue from its hotel, hotel and tourism divisions increased by 42.6% from 4.5 billion yuan in the second quarter of 2020 to 6.5 billion yuan in the third quarter of 2020, while commission income (the main wine and travel business) increased by 58.7% to 3.3 billion yuan. mainly driven by consumers' return to store consumption and seasonal factors.
Tuniu Corp's revenue in the third quarter was 123.5 million yuan, down 85.5% from the same period last year; the net loss attributed to common shareholders was 56.9 million yuan. Tuniu Corp said that based on the evaluation and management of capital liquidity, it is expected that the existing cash / cash equivalents / investments will be sufficient to meet the working capital needs and capital expenditure of the company's normal business in the next 12 months.
Trip.com, who attaches equal importance to both domestic and international markets, shows the performance resilience of a diversified market. Analysys analysts believe that under the influence of the epidemic, this year's travel users have set their sights from abroad to the domestic tourism market. The data show that the number of users choosing domestic peripheral and long-term destinations has increased by 4.4% and 8.2% respectively. In comparison, users' willingness to travel abroad has declined across the board-Trip.com has accumulated a large number of high-quality outbound tourists in the past, and this part of the spending power has also returned to the domestic tourism market under the special background of the epidemic, which is reflected in Trip.com 's performance.
In the third quarter, Trip.com 's main business soared month-on-month. Of this total, the accommodation booking business achieved an operating income of 2.5 billion yuan (US $365 million), an increase of 98 per cent over the previous month. Specifically, domestic Mid-high Star hotel bookings on Trip.com platform continued the growth momentum in the second quarter and continued to maintain double-digit growth during the third quarter, 10 to 20 percentage points higher than the industry average, and the leading edge continued to expand. Trip.com 's short-distance hotel bookings increased by about 20% compared with the same period last year. During the "National Day" period, the overall GMV of Trip.com accommodation bookings increased by more than 10% year on year, and the local hotel GMV increased by more than 50% year on year.
As another pillar of Trip.com 's business, traffic ticketing realized operating revenue of 1.9 billion yuan in the third quarter, an increase of 66 per cent from the previous quarter. Among them, Trip.com 's domestic air ticket business achieved positive year-on-year growth in the third quarter, higher than the industry average. In addition, Trip.com 's travel and vacation business achieved an operating income of 326 million yuan (US $48 million), an increase of 151% over the previous month, and the customized tour business maintained a 50% year-on-year growth of 50%. Business travel management business achieved operating income of 282 million yuan ($42 million), up 74% from the previous month.
Trip.com and the client of the same journey performed well.
"Tourism content" is about to break out.
While the full-scale explosive recovery of the four main businesses, Trip.com has continued the style of reducing costs and increasing efficiency since the epidemic, and product development, sales and marketing, as well as management expenses continue to show a downward trend-- of which, sales and marketing expenses were 1.1 billion yuan ($166 million), down 54 per cent from the same period last year.
In spite of this, Trip.com 's user stickiness and purchasing power have not decreased but increased. So far, Trip.com 's overall repurchase rate in the past 12 months has exceeded the level of the same period last year. In fact, in the past three years, Trip.com has reduced the marketing expense rate from 30 per cent in 2017 to 26 per cent in 2019, but Trip.com 's user activity and conversion power of paying users continue to improve. Trip.com 's monthly active users increased by 60 per cent from 2017 to 2019, according to iResearch.
Also outstanding in user data is Tongcheng Yilong. In the third quarter of 2020, with the rapid growth of sinking users, the number of Tongcheng Yilong users continued to increase, with the number of monthly active users rising to 246 million, an increase of 5% over the same period last year, and a month-on-month increase of 40%-a record high. Thanks to the release of market demand and offline customer acquisition business, the number of monthly fee-paying households (MPU) with Cheng Yilong increased by 60.2% month-on-month to 29.8 million in the third quarter, the same as in the same period last year.
In addition, Trip.com 's "War Plague Star" live broadcast project also continued the eye-catching performance of the previous two quarters. Statistics show that since the launch of the broadcast in March this year, the price of each guest in Trip.com 's live broadcast room has reached 1300 yuan. So far, the GMV of Trip.com 's live broadcast matrix has totaled more than 2.4 billion yuan, with more than 170 million viewers.
Among the users who watched Trip.com LVB, the re-viewing rate was nearly 40% for those who stayed for more than 1 minute, and more than 60% for those who repurchased more than 2 times. Trip.com LVB continued to influence users' consumption decisions. More than 65% of users watched Trip.com LVB to issue orders the day after and after. In addition, the post-90s and post-00s accounted for more than 60% of WeChat Mini Programs, the main position broadcast live by Trip.com.
Analysys analysts believe that many tourism companies, including Trip.com, Hornet's nest and poor travel, have been exploring the "content ecology" for a long time and have gone through three stages of iteration: from picture and text to short videos, and then to today's live tourism. They represent three core content values-content dissemination-information access-transaction decisions. In terms of subdivision, Trip.com 's layout in the field of content ecology is very continuous and penetrating. Through self-built content and investment mergers and acquisitions, he has made extensive layouts in content dissemination, information access and transaction decisions. And Trip.com live broadcast the current performance, it is the result of accumulated strength.
In terms of live tourism, Flying Pig and Meituan have also made a further plus layout, and more and more players will emerge in the "Tourism content" track in the future, which will also stimulate great interest from observers.
Sinking market or global market
Where is the way to the "post-epidemic era" of OTA in China?
In the third quarter, many online travel players' interest in the sinking market only increased. Relevant data show that the increase in the number of new customers to Qunar has been the same as last year, of which 40% of the new customers are under the age of 25, and nearly half of the new users are from third-tier and below cities. Millions of users have bought their first ticket in Qunar since the beginning of this year, the highest level in nearly five years.
As of September 30, 2020, registered users of Tongcheng Yilong living in non-first-tier cities in China accounted for about 86.1% of the total registered users. In the third quarter, about 67.2 per cent of the new paying users of Tongcheng Yilong on Wechat came from third-tier cities in China or below, up from 63.3 per cent in the same period in 2019. At the transaction level, the number of hotel nights in low-line cities increased by nearly 30% in the third quarter of 2020 compared with the same period last year.
This means that the whole "Trip.com system" control of the sinking market is rising. At the same time, the situation in the international market is difficult to be optimistic for the time being, and the future is still under pressure. Tuniu Corp expects net revenue in the fourth quarter of 2020 to reach 112.8 million to 135.4 million yuan, down 70 to 75 per cent from a year earlier.
Similarly, Trip.com is still in the recovery stage in the international market, but judging from the layout of previous years, Trip.com has already made cards for the future of internationalization: from 2017 to 2019, Trip.com 's international air ticket and train ticket bookings have maintained a trend of rapid growth. According to Guosheng Securities Research report, in the second quarter of 2019, international air ticket revenue accounted for 45% of the total ticket revenue. It has a certain driving effect on the overall income of the transportation business. By the end of 2019, Trip.com had cooperated with about 570 international aviation departments, and international air ticket sales had more than doubled for 13 consecutive quarters compared with the same period last year, and international train ticket business was also growing rapidly, and international train tickets increased seven times in the second quarter of 2019 compared with the same period last year.
In the international accommodation reservation market, Trip.com is also in the stage of rapid growth. According to the Guosheng Securities Research report, overseas accommodation booking revenue accounted for 20% of total accommodation booking revenue in the second quarter of 2019, and the year-on-year growth rate in non-Greater China in the fourth quarter of 2019 was more than 50%. It can be predicted that on the day when the international tourism market ushered in a recovery, Trip.com will become the Chinese online travel company that will enjoy the biggest cake of recovery dividends.
Although there are still many uncertainties in the global tourism industry under the epidemic, the advent of the vaccine will undoubtedly become an important factor to stimulate the recovery of the global tourism industry. Not long ago, Pfizer Inc Pharmaceutical and Biotech announced that they hope to produce 50 million doses of COVID-19 vaccine by the end of this year. After the announcement, tourism Chinese stocks turned red across the board, and Trip.com 's share price closed the day at $36.57, up 13.85%.
Trip.com 's international business is also showing a recovery. In the third quarter of this year, Trip.com brand traffic returned to 70 per cent of the same period last year, driven by demand for overseas and domestic travel, according to the results. "recent progress in the research and development of COVID-19 vaccines and treatments is encouraging, and we believe that the global spread of vaccines is critical to the further recovery of our outbound business." Trip.com CEO Sun Jie said.