Ctrip Profits In 2019 Exceeded The Total Sum Of 5 Years Or Half Of The First Quarter Revenue This Year.

In March 19th, Ctrip announced its unaudited financial results in the fourth quarter of 2019. Financial reports show that the company's net revenue in 2019 was 35 billion 700 million yuan, up 15% over the same period last year. Operating profit increased 94% year-on-year to 5 billion yuan, higher than the sum of operating profits in the past 5 years, and the turnover of core OTA brand (GMV) reached 865 billion yuan, an increase of 19% over the same period last year, and continues to lead the global online tourism market.

Beautiful transcripts also blow away the heavy shadow of this year's epidemic. Wang Xiao, Ctrip CFO, admitted at a telephone conference after the earnings report that if the cost of equity compensation was not considered, the operating losses in the first quarter of 2020 were expected to be between 1 billion 750 million and 1 billion 850 million yuan, and net revenues fell 45% to 50% over the same period last year.

Faced with the impact of the new crown pneumonia epidemic on Ctrip, Liang Jianzhang, co founder and chairman of the board of directors of Ctrip group, said: "despite the short-term challenges, we believe that the impact of the new crown pneumonia epidemic will be one-off. We have full confidence in the long-term prospects of the tourism industry and the fundamentals of the company. "

At present, there are more than 1800 suppliers of online customized tour platform, and more than 6000 custom designers serve millions of users. Gan Jun photo

Four business growth

If it is not the shadow of the epidemic, Ctrip can be turned out to be quite brilliant in recent years. From the data released in the earnings report, in 2019, the four main business of Ctrip maintained a steady growth, and the performance of the increase and decrease in fees was outstanding.

As of December 31, 2019, Ctrip's annual booking revenue was 13 billion 500 million yuan, an increase of 17% compared with the same period last year. In 2019, it accounted for 38% of the total revenue and 37% of the total revenue in 2018. The annual traffic ticketing revenue was 14 billion yuan, an increase of 8% over the same period last year. The traffic ticketing industry accounted for 39% of the total revenue in 2019, 42% in 2018, and 4 billion 500 million yuan in tourism holiday business. The growth rate was 20%. In 2019, tourism and holiday business accounted for 13% of total revenue, 12% in 2018, and 1 billion 300 million yuan in business management business, an increase of 28% over the same period last year. In 2018, business management revenue accounted for 4% of total revenue and 3% in 2018.

In the fourth quarter of 2019, the operating income of the 3 billion quarter was 12% yuan, which rose by about 50% in the fourth quarter. Due to the macro and industrial disadvantages, despite the pressure on travel demand and hotel prices in some parts of the country, international hotel revenue in addition to the Greater China region grew by more than 50% over the same period last year.

Traffic ticketing, the fourth quarter business income of 3 billion 500 million yuan, an increase of 2% over the same period. In addition to special destinations, domestic and international air ticket business has achieved a higher growth rate than the industry.

As for tourism and vacation, as of the end of 2019, the number of stores under Ctrip's operation and construction has reached nearly 8000, covering 290 prefecture level cities and more than 500 county-level cities in the whole country. At present, there are more than 1800 suppliers of Ctrip online customization platform, and more than 6000 custom designers serve millions of users.

Business travel business, the fourth quarter business travel management business revenue of 373 million yuan, an increase of 33% over the same period. The growth is mainly due to the increase in business customers and the optimization of product mix. In addition, Ctrip's other businesses grew by 42% in the fourth quarter, year-on-year growth of 35%, mainly from the growth of advertising and financial services.

In the fourth quarter of 2019, the development cost of Ctrip products decreased by 1% compared to the same period, and the annulus ratio decreased by 3%. As of December 31, 2019, the annual sales and marketing expenses decreased by 3% compared with the same period last year. Excluding the cost of equity compensation, annual sales and marketing expenses accounted for 26% of net operating income, compared with 30% in 2018.

International and low level markets

According to Ctrip earnings data, Trip.com brand gained three digit international ticket growth in the fourth quarter of 2019. Liang Jianzhang said that Trip.com brands in overseas markets have made steady progress in developing new markets and further expanded their market share in the Asia Pacific region. As of the end of 2019, Trip.com brand has entered 27 markets.

On October 29, 2019, Liang Jianzhang announced the new English name of the group as "Trip.com" at the 20th anniversary celebration and global partnership summit. Group. "has foreshadowed the further internationalization strategy of Ctrip. Liang Jianzhang said that in the next three years, it will become Asia's largest and largest international tourism enterprise in five years by implementing the" G2 strategy ". The ten year has become the undisputed most valuable and respected online travel business.

According to Ctrip CEO Sun Jie, Ctrip, which has been attacking the first tier cities, will further expand its market share to the two or three tier cities in the future. More than 60% of Ctrip's new users come from these cities (two or three line target cities), while low star hotels and transport products become effective new user entry products. Ctrip's low star hotel grew by about 50% in the fourth quarter. In addition, offline stores continue to be part of our core strategy to enhance our influence in the low tier cities. Sun Jie said.

"International expansion and low market penetration will become a more important driving force for our future growth path." Sun Jie further said.

Liang Jianzhang also mentioned that in the Chinese market, Ctrip further increased the core business growth beyond the multiple growth rate of the industry, especially in the two or three tier cities, and saw the strong growth of users.

Revenue is expected to halve in the first quarter.

No one would have thought that in the early 2020, there was a huge black swan event. After the outbreak of the Covid-19 epidemic, Online Travel Corporation encountered cold winter. Ctrip as an industry leader also faced unprecedented challenges. Sun Jie said that as of now, Ctrip has processed tens of millions of cancellation orders, involving transactions amounting to more than 31 billion yuan. During the Spring Festival this year, the peak traffic volume reached ten times the normal telephone volume.

In this process, a series of reactions of Ctrip performed quickly. Sun Jie said that Ctrip is the first company in the industry to launch a series of user protection measures, and gradually expand the scope of coverage. Its customer protection policy covers users who are unable to travel because of policy restrictions or epidemic diagnoses at home and abroad, as well as front-line medical workers.

In addition, its technology and product team also made a quick response. Ctrip constantly updated the system to achieve self-service unsubscribe. About 90% of the hotel and transportation order cancellation needs were completed online.

In January 23rd, Ctrip formally put forward a plan to "cancel the security at ease". Sun Jie said that up to now, more than 100 The Globe Hotel have joined the plan, and more than 110 domestic and foreign airlines have provided free refund service for some products. In addition, Ctrip has also announced a series of measures to reduce its burdens in order to help its partners in the difficult period. This includes reducing the cost of holiday suppliers due to the recent cancellation of orders, starting 1 billion yuan supplier partner support fund and providing loan support, providing partners with 2000 online courses free of charge.

"In the past few months, our customer satisfaction has reached a record high." Sun Jie believes that "improved customer satisfaction will translate into long-term customer participation and retention." She also hopes that the epidemic will be an opportunity for Ctrip to examine itself and enhance its core competitiveness.

In the first quarter of 2020 performance expectations, Ctrip CFO Wang Xiao said that all the negative factors brought by the epidemic are taken into account. If the cost of equity compensation is not considered, the operating losses in the first quarter of 2020 will be between 1 billion 750 million and 1 billion 850 million yuan, and net operating income will drop 45% to 50% over the same period.

In March 5, 2020, Ctrip held an online conference announcing the launching of the "tourism Renaissance V plan". Sun Jie said that V represents victory. Ctrip combined more than 100 destinations and other industry partners to invest 1 billion yuan recovery fund, hoping to lead the revitalization of China's post epidemic tourism economy. It is reported that Ctrip opened the "revival V plan" for only 2 weeks, and the hotel pre-sale sales volume has increased 20 times. One of the 3000 Hotel pre-sale packages was robbed in half an hour.

"We will continue to work hard after the temporary slowdown." Liang Jianzhang believes that nowadays travel has become a necessity for many people. The new crown disease has not destroyed the health foundation of China's tourism market. Instead, it will accelerate the integration of industries and the online penetration of low level cities. For the international market, there is still a huge potential travel demand. Once the epidemic is over, there will be a strong recovery.

Jin Zhun, Secretary General of the tourism research center of the Chinese Academy of Social Sciences, believes that after the outbreak, it is not possible to exclude the possibility that OTA will occupy the axis of the tourism ecological chain. However, a new format that can change the market structure may also be pregnant.

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