Today, Ctrip released its financial data for the third quarter of this year. According to the financial report, Ctrip achieved revenue of 5.3 billion yuan in the third quarter, down 2% year-on-year, and adjusted profit of 537 million yuan.
Due to the huge impact of the epidemic on the domestic and foreign tourism industry, Ctrip, which specializes in air tickets and wine travel, has become one of the most affected companies in the epidemic. Many institutions at home and abroad have given conservative expectations for the performance of Ctrip Group, but only from the data of this financial report, Ctrip's performance is basically passed.
On April 19 this year, Ctrip was officially listed on the Hong Kong Stock Exchange, becoming another Chinese stock that has been listed for the second time. Citing data from an Analysys report, the prospectus said, "Based on total merchandise transactions (or GMV), we have been the largest online travel platform in China for the past 10 years and the world's largest online travel platform from 2018 to 2020." ”
Although it is "big" enough, Ctrip is also facing the constraint of "Norwig's theorem", that is, "when the company's market share > 50%, the market share can no longer double", in layman's terms, the company's growth has come to an end.
What's more cruel is that Ctrip also has to face cross-border encroachment on other domestic platforms - Ali, JD.com, Meituan, Pinduoduo are more or less mixed with the business of air tickets and wine tourism. In particular, Meituan, with the full-service model of localized "Food + Platform", has become the first choice for many people to travel. According to data from third-party institutions such as Ai Media and Trustdata, Meituan's online share of the domestic accommodation market has risen to the first place.
Perhaps investors also see Ctrip's dilemma in the competition, when it returned to Hong Kong to list for the IPO, Ctrip only recorded 16 times oversubscription, which is far from Baidu and Bilibili, which were listed for the second time before it returned to Hong Kong, and Baidu was previously oversubscribed 111 times, and Bilibili reached a staggering 170 times.
1. The anxiety of "carrying a program"
According to the surging online report, in 2020, when the tourism industry is generally struggling, China's OTA industry is still in a situation of "one super and many strong", and Ctrip has become the largest OTA platform in China with a market share of 41%.
However, in the absence of a recovery in outbound travel business, Ctrip's total revenue only recovered to 56% of the same period in 2019 in the first three quarters of this year. Previously, the Ministry of Culture and Tourism disclosed that domestic tourism revenue in the first three quarters was 2.37 trillion yuan, recovering to 54.4% in the same period of 2019.
On the surface, Ctrip's growth rate outperforms the growth rate of the overall domestic tourism business, and its performance is worth pondering when subdivided into specific businesses.
Ctrip's four main businesses are accommodation booking, transportation ticketing, tourism and vacation and business travel management, with accommodation booking revenue of RMB2.2 billion in the past quarter, down 11% sequentially; transportation ticket revenue of RMB1.8 billion, down 5% sequentially; tourism and holiday revenue of RMB392 million, up 7% month-on-month; and business travel management revenue of RMB338 million, down 13% month-on-month.
It should be known that this is the performance after the full experience of the golden period of summer travel and the pre-sale of the National Day tour, although it has the impact of the epidemic, but Ctrip's growth decline is an indisputable fact.
If you extend the time, you can find that the dilemma of Ctrip's growth has long been in the foreshadowing. In the past five years, Ctrip's revenue growth rate has been 76.60%, 39.24%, 15.56%, 15.18% and -48.65%, respectively, which can be described as a rapid decline year after year.
In addition to the pressure on revenue, Ctrip's biggest anxiety at present is that the user stay is too short. According to Analysys Qianfan data, the per capita usage time of Ctrip APP in the third quarter fell sharply from the previous quarter, with a growth rate of 2.69%, -2.57% and -6.9% month-on-month, and the growth rate further declined to -23.82% after entering October.
Source: Analysys Qianfan
According to the "September 2021 Online Travel APP Active TOP31 List" released by the network economic agency, Ctrip ranked first with 50.4113 million monthly active users. This is a group of extremely purposeful users who know exactly what they need on Ctrip, whether it's a plane ticket or a hotel. The advantage of this user group is that the transaction value is extremely high. The disadvantages are more obvious, come to book, book after the end of the departure.
In order to let these users stay on the platform for a while, shop more, see more, and stimulate new purchase appeals, Ctrip has tried its best.
In March, Ctrip released the "Tourism Marketing Hub Strategy", proposing to use the "Planet" flagship store as the carrier to aggregate traffic, content and commodities, superimpose travel scenarios, and create a marketing ecological circulation system.
Ctrip CEO Sun Jie described it as a flagship store with planet as a position, connecting business content, private domains and transactions, connecting them into a complete link, and realizing a complete closed loop from content to transaction.
At the same time, Ctrip also pays attention to cultivating head KOLs and radiating users with the help of the power of head KOLs, which are collectively referred to by Ctrip as travel experience engineers. The role of travel experiencers is to share pictures of their travel process and the scenery during the trip, so as to achieve the purpose of facilitating the transaction.
However, for tool-based products such as Ctrip APP, the difficulty in realizing the conversion of transactions through the community lies in the conversion rate.
In addition to its own problems, Ctrip is also facing the impact from competitors.
Ctrip's 2020 annual report points out that the company's existing competitive advantages, such as a larger active user base on the app or website, financial, marketing and strategic relationships, alliances, visibility, technical capabilities or business models, may be imitated. At the same time, competitors "may benefit from the existing user base of their other services, capitalize on the traffic already obtained, guide users from other service offerings to their travel services, and further achieve synergies." ”
Roughly speaking, competitors who conform to this description include Ali (Fliggy), JD.com, Pinduoduo, Meituan, etc., and even Douyin, Kuaishou, and Xiaohongshu.
Compared with Ctrip, a platform that focuses on low-frequency transactions such as tourism, the higher frequency of user visits on e-commerce platforms means a larger traffic pool, while platform users such as Douyin and Kuaishou are more sticky and have their own "planting grass" attributes, which has unique advantages in recommending tourist destinations.
Among these opponents, especially the MEITUAN move the fastest. According to the "2019-2020 China Online Hotel Booking Industry Development Analysis Report" released by Trustdata, in the second half of 2019, Meituan's hotel orders accounted for up to 51.7%, with a cumulative room night volume of nearly 400 million, surpassing Ctrip (referring to Ctrip + Tongcheng eLong) for the first time and becoming the first place in the field of online hotel booking in China.
Some industry insiders have analyzed that in the future, Ctrip and Meituan will have a war.
2. Ctrip down, Meituan up
In the early days, the coverage of the sinking market by the domestic mainstream OTA platform was quite limited, but it was more targeted at the travel needs of business people. This makes the expansion of the US group, which is known for its ground pushing ability, in the sinking market from 2014 to the present almost smooth.
But the price is that Meituan soon encountered profit problems in the wine and tourism business.
In the early expansion, Meituan relied on the traffic advantage of the basic business to cut in from the demand for hourly rooms around schools and hospitals, replicating the playing method of the takeaway market and avoiding the high-end market of business travel users. This makes Meituan's number of room nights surpass Ctrip,but there is a significant gap in the income contributed by single room night commissions.
According to open source securities data, in 2019, Meituan's ADR (average room rate) was 195.92 yuan, Ctrip's was 421 yuan, Meituan's hotel business revenue was 5.52 billion yuan, and Ctrip's was 13.514 billion yuan.
But a common basic principle in Internet companies is "loss for growth", and Meituan is also good at it.
After early exploration, Meituan's wine and tourism business has achieved rapid growth since then. In the whole year of 2020, Meituan's revenue from the store, tourism and hotel business was 21.252 billion yuan, and the total revenue of Ctrip's various businesses in the same period was only 18.327 billion yuan, in other words, Meituan's single business revenue has surpassed the entire Ctrip.
It is worth noting that Meituan's total room nights have accounted for more than 50% of the industry as early as 2019; by the end of 2020, Meituan's star hotels will account for more than 15% of the total number of room nights, and an increase of more than 110% year-on-year.
This shows that Meituan's hotel booking business has a huge economic housing base, and the development momentum of extending star hotel listings upwards has been remarkable, if it continues to develop, Meituan's hotel business is likely to open up high and low hotel accommodation product lines, and Ctrip's past unique advantages will no longer exist.
In the face of the encroachment of the US group, Ctrip began to accelerate its entry into the sinking market.
According to the prospectus, by the end of 2020, the stores of Ctrip, Qunar and Travel Bestway have covered more than 240 prefecture-level cities and 507 county-level cities across the country, with a coverage rate of 86% and a total of nearly 6,000 stores. More than 40% of the new trading users last year came from third-tier cities and below.
In March this year, Ctrip launched the "Rural Tourism Revitalization" strategy, which includes investing 1 billion yuan in rural tourism industry funds, large-scale empowerment of 100 tourist villages, and training 10,000 rural tourism revitalization talents. At the same time, it was also announced that it would create 10 high-end rural accommodation benchmark products - with a degree of fake farms.
Image source: Network
In the past year or so, Liang Jianzhang has personally gone to Xijiang in Guizhou, Huzhou, Henan, Zhengzhou, Jiangxi, Lushan, Sichuan and Chengdu for "live streaming", of course, he has brought all tourism products.
The US group rose, Ctrip sank, and the competition between the two became a white-knife war of real knives and guns, and pointed directly into each other's hinterland.
Coupled with the impact of the epidemic, many consumers have to abandon their plans for long-distance travel and choose short-term or even suburban tours instead, which has made the competition between the two companies for local resources increasingly fierce.
It can be seen from the development process that the core of Meituan is a local life service based on geographical location, and its competitiveness comes from extensive coverage and efficient performance capabilities. Ctrip's advantage is that it has more high-net-worth users with high consumption levels, and has built a complete set of full-chain travel service capabilities as a competitive barrier around the demand for organic wine of these users.
In the medium and long term, the "new species" Meituan is more imaginative and explosive than the "front wave" Ctrip, and the one-stop mode of "eating, drinking and having fun" with high frequency and low frequency can realize its own internal traffic closed loop. Ctrip is also a good choice to be the leader of the subdivision track, and Ctrip also has the trump card of outbound travel.
This war between giants has just begun.
(Author |.) Tang Fei, Editor | Bell)