Ctrip's 2021 financial report has three key words: spillover effect, flywheel effect, and multiplier effect

U.S. Stock Research Agency learned that on March 24, 2022, Beijing time, Ctrip Group (NASDAQ: TCOM and Hong Kong Stock Exchange: 9961) announced its financial results for the fourth quarter and full year ended December 31, 2021.

According to the financial report, Ctrip Group's annual net operating income in 2021 was 20 billion yuan, recovering to about 56% of 2019 – relevant data show that China's total domestic tourism revenue has recovered to 51% before the epidemic. In 2021, Non-GAAP's net profit attributable to shareholders of Ctrip Group was RMB1.4 billion.

Since the outbreak of the epidemic, Ctrip has actively rescued and reduced the burden of merchants, helped merchants improve their quality and increase income, and at the same time, the two long-term strategies of "tourism marketing hub" and "deep ploughing in China, with a global heart" have begun to emerge; in terms of helping the revitalization of tourism destinations, Ctrip has achieved a number of achievements through resort farms and diversified government-enterprise cooperation models. Throughout the whole year of 2021, Ctrip and the global tourism industry are in the process of "actively building the bottom and waiting for spring".

Spillover effect: reduce the burden of business bailouts, help improve quality and increase income

In 2021, Ctrip's four main businesses performed smoothly. From the perspective of annual revenue, accommodation reservation revenue was 8.1 billion yuan, transportation ticketing revenue was 6.9 billion yuan, tourism and vacation income was 1.1 billion yuan, and business travel management income was 1.3 billion yuan. Among them, the domestic air ticket and hotel business led the industry to recover throughout the year. On this basis, Ctrip is also committed to playing a "spillover effect" to support platform merchants.

According to the data, from 2020 to 2021, Ctrip has cumulatively reduced the bailout of travel agencies, air ticket agents, hotels and other industry businesses; the amount of bailouts is about 2.5 times that of the total net profit attributable to non-GAAP shareholders of Ctrip Group since the epidemic. Ctrip has issued more than 30 billion yuan in loans to small and medium-sized business owners, about 1.5 times the company's annual revenue in 2021, and Ctrip's refund order transaction volume due to the epidemic is nearly 100 billion yuan, about 20% of the platform transaction volume in 2021.

In addition, through a number of measures such as product innovation, Ctrip has helped platform merchants increase production and income. In the accommodation industry, Ctrip's hotel packages now cover more than 7,000 high-star hotels, contributing more than 40% of the bookings to participating hotels; hotel packages have helped the non-room revenue of partner hotels increase by nearly 10 times. The promotion campaign launched by Ctrip has attracted about 200,000 hotel merchants to participate, driving the performance of cooperative hotels to increase by more than 60%.

In terms of transportation empowerment, the intelligent ticket integrated solution developed by Ctrip in 2021 has helped 31 airports improve passenger transit efficiency and 24 airports' passenger throughput increased by double digits year-on-year; after the air-air intermodal cooperation with Ctrip, the number of flight segments in some cooperative airports increased by nearly 40% compared with the same period in 2019.

Since the epidemic, the travel radius of travel users has been significantly shortened, and Ctrip has combined relevant national policies to capture the actual needs of users and vigorously develop quality leisure products such as peripheral tours, private groups and theme tours. In 2021, the transaction volume of peripheral and local travel products sold by Ctrip's head suppliers achieved positive growth compared with 2019; the number of domestic private group suppliers increased by 32% over the same period of the previous year, and the transaction volume increased by nearly 40% compared with 2019; and the transaction volume of Ctrip's domestic theme travel products increased by more than 160% compared with 2019.

In 2021, the business travel market broke out a strong recovery momentum. In the fourth quarter and full year of 2021, Ctrip's business travel platform hotel bookings increased by nearly 3 digits compared with the same period in 2019. Ctrip's investment in supply chain increased by 86%, product technology investment increased by 86%, and service efficiency increased by 110% compared with 2019. Customers' reliance on integrated business travel solutions increased by 32%.

Flywheel Effect: The long-term strategy is to accelerate "through turbulence"

In 2021, the long-term strategy represented by "deep ploughing in China and having a global heart" and "tourism marketing hub" presented a continuous acceleration of the flywheel effect, laying a solid foundation for Ctrip to cross the turbulence of the market. Benefiting from the relatively loose travel restriction policies overseas, Ctrip's overseas business ushered in a wave of development opportunities from the fourth quarter of 2021 to the first two months of 2022.

In the Asia region, Ctrip's home/regional hotel bookings in overseas markets increased by more than 30% in 2021 compared to 2019 – of which hong Kong, Singapore and South Korea grew by about three digits. Ticket bookings in the European market recovered further in the fourth quarter and continued into early 2022: In the first two months of this year, Ctrip's overseas brands saw a year-on-year increase in air bookings of more than 200%, with faster growth in Europe.

In 2021, the number of orders for play products in overseas destinations on Ctrip's platform increased by more than 30% compared with 2019, and the total number of play products in Ctrip's overseas markets increased by 3 times year-on-year, and the number of online products exceeded 200,000, covering more than 2,000 destinations.

In 2021, Ctrip's "Travel Marketing Hub" strategy will be in full swing, and it will continue to make breakthroughs in both membership marketing and content marketing.

In 2021, Ctrip's membership grew by more than 20% year-on-year, with double-digit growth in senior membership. At the level of membership marketing, by the end of 2021, Ctrip has achieved member interconnection with more than 20 hotel groups, and through the construction of a joint membership system, Ctrip has delivered 30 million in-store service users to hotels.

At the content marketing level, in 2021, the number of viewers who have viewed Ctrip's live broadcast increased by 171% year-on-year, 44% of users ordered live room products within 24 hours after watching the live broadcast, and the verification rate of pre-sale products in Ctrip's official live broadcast exceeded 30%, and the write-off rate of more than 5,000 hotels exceeded 50%. In the fourth quarter of that year, the GMV generated by Ctrip's self-broadcast guidance increased by 100% quarter-on-quarter, and the GMV contributed by the live broadcast collection accounted for more than 40% of the annual performance of platform-based live broadcasting.

In the fourth quarter of 2021, the overall fan size of Ctrip Planet flagship stores increased by 34% month-on-month, and the number of new hotel merchants increased by 44% month-on-month. In the fourth quarter, the average number of daily interactive users on Ctrip's community content channels increased by more than 100% year-on-year; the average daily release of creators as a whole increased by more than 80% month-on-month, and the number of newly signed travelers increased by 160% over the same period last year.

Multiplier effect: One-stop service activates the destination tourism economy

In 2021, Ctrip will achieve great results in boosting the tourism economy of destinations by leveraging the advantages of a one-stop travel service platform. The degree of fake farms is a typical example of this.

According to Ctrip data, rural tourism orders in 2021 increased by 6% compared with 2019, of which rural hotel orders increased by 32% compared with 2019. In March last year, Ctrip launched a rural tourism revitalization strategy aimed at attracting more tourists from other places and driving the high-quality development of the tourism economy of destinations by landing on resort farms. By the end of 2021, Ctrip had landed 8 farms in China and showed a significant "multiplier effect".

According to the data, nearly 50% of users will book train tickets or air tickets while booking a fake farm with a degree of carrying - which means that the farm has attracted a large number of off-site travel users and generated more new consumption in the local area: nearly 40% of users will book tickets for surrounding scenic spots while booking the farm, and a considerable proportion of users will book local play products at the same time.

In the past year, within 30 days of the opening of 8 fake farms, the average price of hotels within 10km of the surrounding area has increased by 45%. The farm has absorbed a large number of local villagers for employment, and the per capita wage has increased by more than 60% compared with the local average wage level; farm employees can also participate in the live streaming of goods and cultural and creative goods sold organized by Ctrip, and in the non-epidemic tourism season, some employees can get up to 5 times the local average salary monthly salary.

Ctrip's more diversified cooperation model with tourist destinations is also unfolding. In 2021, Ctrip will cooperate with domestic tourism destinations such as Jiangsu, Henan and Hainan to carry out integrated marketing, and the number of tourists and tourism revenue will increase by double digits, and the governments of Heilongjiang, Jilin, Hunan and other destinations will issue cultural tourism consumption subsidies, driving direct tourism transactions by nearly 50%.

From September to December 2021, the Hubei Provincial Department of Culture and Tourism released cultural tourism consumption subsidies through Ctrip's platform, driving direct tourism consumption of more than 21 million yuan and indirect tourism consumption of nearly 100 million yuan; in 2021, the Shandong Provincial Department of Culture and Tourism jointly developed a number of high-quality tourism products, and the number of tourism orders in Shandong increased by 43% year-on-year. In 2021, Ctrip and the Macao Government Tourism Office (MGTO) will cooperate in areas such as precision marketing, and the number of tourists booking through Ctrip throughout the year will increase by 5 times higher than that of the market market. Throughout 2021, Ctrip has achieved remarkable results in helping destinations activate their tourism economy through a variety of cooperation methods.