Wen / Liming
Original title: is the winter of Ctrip over?
On the morning of March 4, Ctrip, China's largest online travel platform, released its financial report for the fourth quarter and the whole year of 2020. Data show that in the fourth quarter, Ctrip's revenue was 4.97 billion yuan, a year-on-year decrease of 40%, and its net profit was 1 billion yuan, a year-on-year decrease of 50%. In 2020, Ctrip's revenue is 18.32 billion yuan, and its net loss is 3.27 billion yuan.
However, Ctrip's performance exceeded expectations.The market expects Ctrip to make a net loss of 398 million yuan in the fourth quarter, resulting in a profit of 1 billion yuan. The market expects a net loss of 4.548 billion yuan in 2020, but the actual net loss is 3.27 billion yuan. Moreover, Ctrip's gross profit rate in the fourth quarter was 81.6%, a new high in the past 11 quarters. After the financial report was released, Ctrip's share price rose 4.72% after hours.
According to the report on China's online tourism industry in 2020 released by Fastdata, Ctrip's market share is 40.7% under the Gmv caliber, ranking first in the industry.
Ctrip is the leader of the online tourism industry, which is the barometer of the recovery of the industry, and online tourism is the barometer of the recovery of the entire epidemic. The annual data of 2020 released by Ctrip provides us with a very good perspective to review the industry changes in the past year.
2020 is the winter of Ctrip, to survive the dark moment, standing in the spring of 2021, Ctrip across the winter?
Online travel is worse than online travel
Every time an online travel company publishes its results, it's like a big tragedy.
Let's take a look at how much the industry has suffered in the past year.
According to the blue book of China's tourism economy (No.13), in 2020, the number of domestic tourists in China will be 2.88 billion, a year-on-year decrease of 52.1%; the domestic tourism revenue will be 2.2 trillion yuan, a year-on-year decrease of 61.1%. Both the number of tourists and the income from tourism are cut in half.
In this context, the performance of online travel platform is certainly hit hard.
According to Ctrip's financial report, in the fourth quarter of 2019, the company's revenue was 8.34 billion yuan. In the first quarter of 2020, it directly dropped to 4.74 billion yuan, and in the second quarter of the most serious epidemic, it even dropped to 3.16 billion yuan. These two quarters, carry Cheng to turn loss from gain. Throughout 2020, Ctrip's revenue fell 49% year on year, and the company turned from profit to loss.
However, interestingly, when we put our vision on a global scale, we found that Ctrip is not the worst.
Booking, the global online travel giant, saw its revenue drop by 55% in 2020 and its net profit plummet from $4.865 billion to $59 million. Expedia, another big online travel platform, will see its revenue drop by 57% in 2020, from a profit of US $565 million to a huge loss of US $2687 million.
In contrast, Ctrip is also relatively high ability to resist risk.
By comparing the performance of the four quarters of 2020 in detail, we can see the difference in the recovery speed of the performance of the three platforms.
In the first quarter of 2020, the decline of Ctrip's income growth rate was the largest, because the epidemic situation in China was the most serious at that time. In the second quarter, Ctrip's revenue continued to decline by 64%, but booking and Expedia also suffered heavy losses, with the decline rate as high as 84% and 82% respectively. In the third quarter, Ctrip and booking were even, with revenue declining by 48% and Expedia by 58%.
The turning point occurred in the fourth quarter.The decline of Ctrip's revenue narrowed to 40%, but booking and Expedia are still wallowing in the mire, with platform transaction volume down 65% and 66% respectively, and revenue down 63% and 57% respectively. In addition, booking and Expedia are still losing money in the fourth quarter, while Ctrip has made profits for two consecutive quarters.
According to the report of China's online tourism industry in 2020 released by Fastdata, in the first three quarters of 2020, Ctrip's business recovery rate exceeded that of booking and Expedia, ranking first among the top three OTAs in the world.
Therefore, the sharp decline in the performance of online travel companies in 2020 is a common phenomenon in the whole industry, mainly due to the epidemic rather than the company's operation. In this case, whoever can take the lead in recovering from the epidemic will have the opportunity to rise against the trend.
How did Ctrip survive?
Why is Ctrip not defeated by the epidemic black swan, but faster than the opponent to recover?
In addition, Ctrip is also reducing costs.It can be seen from the financial report that the marketing expenses of Ctrip will be greatly reduced in 2020.In the eight consecutive quarters of 2018 and 2019, the marketing expenses of Ctrip are more than 2 billion yuan, accounting for about 30% of the revenue. However, since the first quarter of 2020, the marketing expenses have dropped to less than 2 billion yuan, with an average of 1.1 billion yuan in a single quarter of the whole year.
But the interesting thing is,In this case, Ctrip's product popularity, user activity and payment conversion have increased instead of decreasing.According to the data of micro hot big data research institute, in 2020, Ctrip will become the hottest online tourism platform among all kinds of online tourism platforms.
When Ctrip reduces marketing expenses, product development expenses are relatively stable. Compared with 2019, Ctrip's marketing expenses have decreased by 53%, and its product development expenses have only decreased by 28%.
Therefore, in the third quarter of 2020, the domestic epidemic situation slightly recovered, and after the tourism market began to recover, Ctrip immediately realized its first single quarter profit. And from the perspective of profitability, Ctrip's net profit in the third quarter has returned to the level before the epidemic.
In the fourth quarter, the domestic tourism market further recovered. According to the world tourism development report 2020, only eight days of national day and Mid Autumn Festival, China received a total of 637 million domestic tourists, with a year-on-year recovery of 79% according to the comparable caliber, and achieved a domestic tourism revenue of 466.56 billion yuan, with a year-on-year recovery of 69.9% according to the comparable caliber.
Now, the recovery of the domestic tourism industry has become a fixed trend, and the capital has begun to compete for layout. According to the report on China's online tourism industry in 2020 released by Fastdata, the amount of financing in the tourism industry will reach a new high of 42 billion yuan in 2020. In the low period of the industry, the tourism assets are heavily copied by the capital.
Where will Ctrip go?
With the recovery of the domestic epidemic, the dark moment of online tourism industry should be in the past. During the Spring Festival, the online tourism industry has shown obvious signs of recovery.
According to the ticket data of Ctrip, the orders of booking scenic spot tickets through Ctrip platform on the 7th day of the Spring Festival have increased by more than 50% compared with the Spring Festival in 2019 (before the epidemic); the orders of local booking tickets have increased by more than 300% compared with the Spring Festival in 2019. According to Ctrip's car rental data, the proportion of local travel orders for car rental during the Spring Festival in 2021 will increase by 82% in 2019.
In the context of comprehensive recovery, where will Ctrip go next?
Content ecology may be the next focus of Ctrip.
At the Global Partner Conference in October last year, Ctrip put forward the refinement direction of deep cultivation content. Specifically speaking, it is to excavate small and beautiful tourism products such as boutique B & B and featured play to support traffic.
The logic behind this is very simple. The platform needs traffic, and the content is a good way to revitalize the traffic that has been verified. Taobao, for example, has been doing content ecology in the past few years. Whether it's live Taobao or grass notes, it's trying to attract and retain users with content.
In January this year, Ctrip released its first brand star. The star's scenic spots, hotels and other businesses can not only release official graphics, short videos, topic interaction and challenge activities, but also use Ctrip live broadcasting platform to open live broadcasting, so that users can quickly plant grass and guide users to place orders in Ctrip.
Internationalization or another key point.
With the epidemic over, the global tourism market will recover sooner or later. In the past year, Ctrip has seized the opportunity of domestic market recovery, and it is very important to seize more market share with the global recovery.
Source / pexels
In the past many years, Ctrip's market was mainly in China. With the merger of qunar and the acquisition of elong, Ctrip became the first leader in the domestic online tourism industry. Then Ctrip put internationalization on the agenda and began to vigorously expand cross-border business.
To expand the overseas market, Ctrip mainly adopts the following ways: one is to directly acquire or become a shareholder of overseas OTA platform, the other is to establish distribution agreements with major international hotel groups, and the third is to cooperate with international Ota The fourth is to sign distribution agreements with overseas distributors, which is equivalent to becoming the next level distributors. In addition, overseas branches and call centers are set up, and overseas ground promotion teams are established.
At present, Ctrip has established call centers in Edinburgh, Seoul and Tokyo, and sales teams in Japan, South Korea, Singapore, Malaysia, Indonesia, Thailand, Philippines, Vietnam, Cambodia, the United States, the United Kingdom and Australia.
Ctrip's self operated call center mode is also an important reason for its rapid recovery from the epidemic and continuous cost reduction, which is also a major advantage of Ctrip compared with booking. Booking's call center services take the form of outsourcing, Ctrip is self-supporting mode, self-supporting mode in the early need to invest more capital, cost, but the future leverage effect is more obvious.
With the development of overseas business, the proportion of international revenue in Ctrip's overall revenue has increased year by year, from 20% in 2017 to 35% - 40% in 2019. According to the prediction of Guosheng securities, the business income of Ctrip international will increase from 11.6 billion yuan in 2019 to 26.6 billion yuan in 2025.
For Ctrip, the overseas market is the next highland to compete for, and may become the second growth engine. But it also means it needs to fight booking and Expedia on a global scale. With the recovery trend of tourism industry clear, the coldest winter is about to pass, the war of online tourism industry will start again.
*The picture comes from visual China.