Original title: tourism recovery is imminent, will Trip.com usher in "Davis double-click"? Source: ginkgo Finance and Economics

On March 3, US Eastern time, Trip.com released its 2020 and Q4 financial results, which outperformed the OTA industry for the whole year.

The net income in a single quarter is 5 billion yuan, returning to the motherNet profitIt was 1 billion yuan, with a gross profit margin of 82%, the highest in nearly 11 quarters.

From a sub-business point of view, 2020Q4 accommodation booking business achieved revenue of 2.2 billion yuan, the annual revenue scale of accommodation booking reached 7.1 billion yuan. In the fourth quarter, hotel GMV in the province increased by 20% compared with the same period last year, and the domestic short-distance and local tourism market are the key factors driving Trip.com 's recovery. During the Spring Festival in 2021, the GMV of hotels in the province of the platform continued to grow by more than 20%, and orders for tickets to local scenic spots and other play products soared by 200%.

In addition, Trip.com 's operational strategy of consolidating content, products, supply chain and quality over the past year is simultaneously reflected in the financial results. Since the arrival of internalization, the number of visits to the information flow has increased by more than 200% compared with the beginning of the year. Through this channel, the cumulative transaction volume contributed about 5 billion yuan last year.

In terms of marketing system, the transformation of "building a marketing hub for the pan-tourism industry" has contributed to the positive growth of domestic advertising and marketing revenue; in terms of supply chain, the number of Trip.com local play suppliers has increased by more than 25 per cent year-on-year.

In 2020, the industry will be under pressure. Through Trip.com 's financial report, we can clearly see that the recovery of the tourism industry is not consistent.

1

Tourism has been reborn in the fire.

Over the past year, the global tourism market has been struggling as a result of the epidemic.

According to a recent report on the website of the National Bureau of Statistics, the number of domestic tourists in 2020 was 2.88 billion, down 52.1 percent from the same period last year. Domestic tourism revenue reached 2.2 trillion yuan, down 61.6 percent from the same period last year, and it is estimated that the quarterly comprehensive index of tourism economic operation for the whole year is 68.95,75.69,78.47,85.32 respectively, although it is declining compared with the same period last year, but the impact of the epidemic is superimposed. The trend of month-on-month recovery can be basically confirmed.

Stabilizing and rebounding is not a year-on-year and month-on-month figures game. From the changes in the market, it is clear that there is also a turnaround in the crisis.

The epidemic seems to have brought a fire all over the sky, which not only hit the whole industry, but also triggered a series of changes. Those enterprises that were in jeopardy had to adjust their mode of operation, and even some of the enterprises with operational difficulties disappeared. Other providers of high-quality tourism resources not only withstand the crisis, a large number of service providers make use of the gap period to comply with the trend.

In the post-epidemic era, the tourism market in 2021 is being reborn.

Although there is great uncertainty in the recovery of outbound travel because of the complex and severe anti-epidemic situation abroad, the domestic epidemic situation is properly controlled, and the domestic long-distance tourism market may gradually return to the pre-epidemic level in 2021.

The rise of local short-distance travel has led to the prosperity of surrounding tourism. compared with other ways, the tourism mode represented by peripheral tourism has the characteristics of "three high": high frequency, high demand response and high scene requirements. and it is likely to give birth to a new long-tail market. no, no, no.

Data show that in the first half of last year, the Asia-Pacific local short-distance travel market was absolutely dominant, during which the scale was strong, and it was the first to get out of the trough.

Recovery is an ongoing process, extending from the first quarter of 2020 to the Spring Festival that has just passed.

In the Spring Festival of the year of the Ox, all localities respond positively to the local New year. Even if the travel radius is greatly shortened, the local travel market comes out of the winter ahead of schedule. Trip.com ticket data show: local booking ticket ordersQuantity ratioThe Spring Festival in 2019 will grow by more than 300%. Judging from Trip.com 's ticket booking and admission to the park during the long holiday, all provinces and cities across the country have basically stepped into the fast lane.

The local market demand represented by the surrounding tourism has blowout, driving the individual tourism market to stabilize and pick up.

The China Academy of Tourism estimates that the number of rural, urban, peripheral and self-driving tours across the country has returned to more than 65% in the first eight months compared with the same period last year.

The popularity of short trips in central cities such as Chongqing, Shanghai, Chengdu, Xi'an, Beijing, Guangzhou, Wuhan and Shenzhen is also rising. According to data from platforms such as Trip.com and Qunar, the retail market for summer self-driving, self-help and independent travel has recovered to about 90 per cent, with orders for high-quality, low-density and in-depth tourism products accounting for about 70 per cent.

Although the market for group tours that do not require high quality and experience is depressed, tourism products with high quality and deep experience are extremely prosperous, which means that the latter may gradually become the mainstream way of travel in the post-epidemic era.

The reduction in outbound travel spending saves a lot of money, which makes Gaoxing Hotel highly sought after in the current round of tourism recovery. Data show that hotel bookings returned to 80% last year, and Gaoxing hotel bookings exceeded that of the same period last year.

If we say that before the epidemic, high-end is subject to the growth of regional consumption capacity, there is uncertainty, then after the epidemic, scattered, deep experience, low-density market demand, has removed the obstacles for high-end.

To be exact, high-end and service are the new features of the tourism industry in the post-epidemic era.

The new trend requires online travel platforms to change the stubborn problem of past traffic patterns, which used to peddle tourism as a commodity is no longer effective, especially it is difficult to eradicate the problem of information mismatch.

In fact, the switching of market style has already appeared in other industries, such as e-commerce and online financial marketing have been involved in live streaming, visualization and service tide is cleaning up the whole industry, and the tourism industry is no exception.

In addition, the new trends in the post-epidemic market, such as peripheral travel and scene, will test the platform's ability to integrate products and supply chain, and it is difficult to outperform the market without corresponding preparation.

2

Cuddle the grass and beat the rabbit

Six days ago, Booking Holdings Inc, the world's largest OTA giant, handed over a tragic financial report. For the whole of 2020, revenue fell 55% year-on-year and net profit fell 99%. In addition, orders fell further in the fourth quarter compared with the previous quarter, and it is still cloudy at the beginning of 2021.

Another overseas giant is in the same predicament. Expedia's Q4 revenue fell 67 per cent in 2020 and 56.92 per cent for the full year. When Booking and Expedia have not yet come out of the trough, Trip.com 's growth against the trend may be more worth exploring.

In addition to the differences in epidemic situations at home and abroad, the timely adjustment of business direction is the key for Trip.com to get out of the crisis ahead of time. As mentioned earlier, the market tends to be high-end and service-oriented during the epidemic, coupled with the blowout of the local market, the relevant enterprises have benefited. At the same time, Trip.com 's adjustment also roughly experienced the process of passive response at the beginning of the year, local adjustment in the middle of the year, and then the formation of a system at the end of the year.

At the beginning of the epidemic, Liang Jianzhang frequently walked into the live broadcast room, which seemed to conform to the general trend of live broadcast and earn traffic. But when "BOSS Live" is normalized, the effect of OTA Live is completely different from that of e-commerce.

In the e-commerce studio, even head anchors like Weiya and Li Jiaqi will keep the average price of their selections within 100 yuan, but when we review the development of Trip.com Live, we will find that it highly coincides with the recovery trajectory of the domestic high-star hotel market, and Gaoxing Hotel happens to be one of the first markets to recover in the post-epidemic era.

This logic applies not only to those who have come out of the epidemic at home, but also to look abroad, but also to find obvious traces. Sun Jie mentioned earlier that Trip.com 's overseas multi-platform live broadcast brought more than 1 million nights of goods to Gaoxing hotels and more than 100 million yuan for overseas Gaoxing hotels, and overseas local hotel bookings increased by more than 100% compared with the same period last year.

Traditionally, OTA is only a platform for docking information, so the value is mainly reflected in the connection. However, when the market forces the industry to enter into service and internalization, the value of OTA has a new direction of extension.

With the development of online tourism for more than 20 years, users are no longer satisfied with online information query, but regard the Internet as a window, so they need OTA platform to provide more services, such as information collection and classification, multiple information screening, serial services and so on. The way of concatenation service is no longer pipelined, but decentralized.

For example, 20 years ago, users might only book tickets and hotels at Trip.com. Twenty years later, Trip.com will not only provide accurate information, but also meet users' broader travel needs, such as pick-up, restaurant, dining, entertainment and so on.

From the current situation, we can see that the main reason why Trip.com outperformed the market is not accidental. Booking delivered dismal results, only in hindsight to identify the three priorities of payment, air tickets and share in the United States, while Expedia is still waiting for the market to regain confidence.

A large part of the reason why Trip.com took the lead in recovery can be attributed to the fact that they built a bridge of mutual perception between users and service providers through "BOSS Live", rather than a simple sales platform; on the other hand, the internalization of information services provides precipitated and searchable vertical information flows.

Trip.com Planet in the tourism industry, similar to the Fortune in financial management, is an extension of content services. There are a lot of information mismatches in tourism and financial management, and the way the platform ends or PGC output is very unconvincing, so Planet UGC is obviously the most suitable form.

Macroscopically, the reform of live broadcast and Star is the only way for the internalization and service of the entire Internet industry. after the revision of the cat and Baidu, Inc. 's clear service path, both service providers and content platforms are moving in the opposite direction.

Macroscopically, the way of getting guests from online travel has moved, the pain points of users have changed, and Trip.com 's Boss live broadcast and Star account are actually responding to market changes one by one. In 2021, combined with the recovery of the local tourism market, a series of special topics on "Local New year" have been launched, and its live broadcast path is constantly fitting in with the scene.

Live broadcast should be service-oriented, while Planet solves internalization, this layout of cuddling grass and fighting rabbits, it is not so surprising to outperform the market and expand market share.

According to the 2020 China online Travel Industry report released by Fastdata, Trip.com 's market share last year was 40.7%, ranking first in the industry under the caliber of GMV. In market analysis, users put more and more emphasis on quality service.

3

终

Through Trip.com 's financial report, we can see that the domestic tourism industry is accelerating its recovery, but the previous model has been sublated in the post-epidemic era.

One is that the traffic pattern is no longer effective, and the next step is the transformation of internalization and service; second, during the epidemic, the high-end market with high quality, low density and deep experience is becoming more and more acceptable; thirdly, the high-frequency peripheral individual tourist market replaces the low-frequency long-distance group market.

It should be pointed out here that earlier, some people thought that the tourism industry would usher in a blowout after the epidemic, which does not seem to be valid at present. The travel demand does not belong to the rigid demand such as food and clothing, but is deferred. After the suppression of the epidemic and the improvement of the prevention and control situation in various places, the travel demand is alleviated by short trips such as peripheral travel.

Handing over a good-looking annual report is actually a judgment of the three characteristics of market switching. Another question is whether the recovery in the market is sustainable or not, we need to further analyze Trip.com 's earnings quality.

In this quarter's earnings report, profits come from both ends, one is a narrowing decline in revenue, and the other is a sharp drop in sales and marketing expenses. Q4 sales and marketing expenses fell 50 per cent year-on-year, higher than the decline in revenue, and Q4 gross profit margin rose slightly to 81 per cent from 79 per cent in the previous quarter due to proper cost control.

The reduction of marketing costs reflects the improvement of the operational efficiency of the platform. Over the past year, APP has transitioned from functional to one-stop, and the improvement of business efficiency has stepped into the fast lane. It can be expected that in addition to the market recovery and open source, efficient cost-cutting may further thicken the performance.

It is worth mentioning that in the past, the main factor hindering the high-end market was the existence of a large number of grey areas in information docking. With the rise of UGC community building and live streaming, the user decision cycle decreased significantly, while the local short-distance and central city tourism market warmed up, high-end is not only the general trend of the future, but also quite resilient.

Users have higher requirements for the service granularity of peripheral travel, such as response speed, matching degree, playability and so on, which require the platform to fully integrate the supply chain and adjust the product portfolio. One-stop APP is undoubtedly the best solution.

To sum up, Trip.com 's performance recovery can be seen as the OTA industry, and even the tourism industry overall recovery of the weather vane. Whether it can keep up with the switching of market demand and improve operational efficiency is the main factor that determines the recovery rate and time sequence of the target.

Source: ginkgo Finance and Economics

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