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Ctrip's total transaction volume ranks first in the world for two consecutive years. International business revenue continues to rise

Date: 2020-03-22

In the face of competition, Ctrip Group has further penetrated third- and fourth-tier cities.

On March 18th, local time in the United States, Ctrip Group (Ctrip, NASDAQ: TCOM) announced its financial results for the fourth quarter and the full year of 2019. Data show that Ctrip's total transaction value (GMV) for the year reached 865 billion yuan, an increase of 19% year-on-year. This is the first consecutive year that Ctrip has maintained the online travel industry after 2018. Behind the continuous increase in Ctrip's total transaction value and operating profit, it is based on the promotion of global business. At the same time, in terms of domestic business, Ctrip has further penetrated third- and fourth-tier cities. However, the current travel market is affected by the new crown pneumonia epidemic, and Ctrip's net revenue is expected to be significantly damaged in the first quarter of this year. To this end, Ctrip has taken several measures to meet the challenges.

The financial report shows that in 2019, Ctrip's net operating income was 35.7 billion yuan, an increase of 15% year-on-year; the net profit attributable to Ctrip shareholders was 7 billion yuan, an increase of 536.4% compared to 1.1 billion yuan in 2018; Gains and losses from changes in the fair value of equity available-for-sale financial assets, net profit attributable to shareholders of Ctrip in 2019 was 6.5 billion yuan, an increase of 18.2% year-on-year compared to 5.5 billion yuan in 2018.

From the perspective of revenue breakdown, the four core businesses of Ctrip grew steadily throughout the year. Among them, Ctrip's accommodation booking revenue in 2019 was 13.5 billion yuan, an increase of 17% year-on-year; transportation ticketing revenue was 14 billion yuan, an increase of 8% year-on-year. ; The operating income of tourism and vacation business was 4.5 billion yuan, a year-on-year increase of 20%; the operating income of business travel management business was 1.3 billion yuan, a year-on-year increase of 28%.

It is worth mentioning that in the overall business of Ctrip, the revenue of the international segment has also increased year by year. Financial report data show that in the fourth quarter of 2019 alone, Ctrip International Hotel revenue (excluding destinations in Greater China) increased by 51% year-on-year. As for's international air ticket business, it has maintained a three-digit growth for 13 consecutive quarters.

It is reported that Ctrip's GMV in the whole year of 2019 reached 865 billion yuan, an increase of 19% year-on-year. Compared with the other two global online travel vendors Booking Holdings and Expedia, its GMV growth rate in 2019 was 4% and 11% respectively. It is understood that this is not the first time that Ctrip GMV has surpassed Booking Holdings and Expedia. In the 2018 financial report, Ctrip GMV has already ranked first in the world.

Ctrip said that the rapid growth of total transaction volume and operating profit is inseparable from Ctrip's globalization strategy. On October 29, 2019, during the 20th anniversary celebration of Ctrip Group, Liang Jianzhang, the co-founder and chairman of the board of directors of Ctrip Group, officially announced the new "G2 strategy" on behalf of Ctrip Group. In the new strategy, the proportion of Ctrip's international air ticket business will increase significantly, and a globalized supply chain will be gradually established. Among them, Ctrip will also strengthen its direct cooperation with the airline company, and has obtained air ticket sales agency qualifications in overseas markets including Britain, Russia, Japan, and Thailand. In the industry's opinion, Ctrip is marching toward the world's largest international tourism company.

Domestically, although it has been firmly in the "top spot". However, in the face of competition, Ctrip Group has further penetrated third- and fourth-tier cities. It is reported that in terms of low-star hotels, Ctrip's growth rate in the fourth quarter of 2019 alone reached approximately 50% year-on-year. In terms of stores, as of the end of 2019, the number of offline stores in operation and under construction has reached nearly 8,000.

Although the performance is soaring, in the face of the current new crown epidemic, Ctrip has encountered unprecedented challenges. In this financial report, Ctrip also gave its forecast for the first quarter of 2020, in which net operating income fell 45% to 50% year-on-year; excluding equity compensation expenses, operating losses in the first quarter of 2020 were 1.75 billion to 18.5 100 million yuan. At the same time, due to the "pause" of the tourism market during the Spring Festival, a large number of orders were returned. At present, the company's non-destructive cancellation has involved more than 31 billion transactions. At the same time, the epidemic is still spreading globally, and tourism activity in overseas markets has begun to decrease.

Facing the challenges of the tourism market, Ctrip is also constantly thinking about coping with the crisis and seeks to take the lead in the recovery of the tourism market. Recently, Ctrip announced the launch of the “Tourism Revival Plan V”. In addition to investing 1 billion yuan in recovery funds, it also released a destination index for the recovery of the tourism industry and pre-sale of tourism products to accelerate the withdrawal of funds.

"Despite the short-term challenges, we believe that the impact of the new crown pneumonia epidemic will be one-time." Liang Jianzhang said, "We believe that the new crown epidemic has not damaged the health foundation of the Chinese tourism market; instead, it will accelerate industry consolidation and low-line The online penetration rate of cities. Similarly, for the international market, we believe there is still huge potential travel demand; once the epidemic is over, we will see a strong recovery. "