Price reductions have driven the continuous recovery of the tourism market. During the National Day holiday, the number of domestic and outbound tourists, as well as the total expenditure, both exceeded the levels of 2019. As a leading online travel agency (OTA) in China, Ctrip's performance has also continued to warm up, with accommodation booking services and high gross margin advertising business maintaining double-digit growth for several consecutive quarters. More importantly, in the hotel and travel market, giants such as Ctrip, Meituan, and Douyin have reached a delicate balance.
According to data from the Ministry of Culture and Tourism, during the National Day holiday, there were 765 million domestic trips nationwide, a year-on-year increase of 10.20% at comparable terms, and a 10.20% increase compared to the same period in 2019. The total expenditure for domestic tourists was 700.817 billion yuan, a year-on-year increase of 6.30% at comparable terms, and a 7.90% increase compared to the same period in 2019.
In terms of outbound tourism, according to Ctrip data, the average daily orders for outbound and inbound tourism on Ctrip's platform during the National Day holiday exceeded those of 2019, setting a historical record.
Advertisement
From the data, the tourism market continues to recover. However, it should be pointed out that the core logic of market recovery lies in "exchanging price for volume." The cost of domestic flights and accommodations has decreased year-on-year, stimulating the recovery of the number of tourists and driving the industry's growth.
With the recovery of the tourism market and the steady increase in the penetration rate of online tourism, the performance of OTA platforms has also shown improvement. As a leading OTA platform in China, Ctrip's performance has significantly warmed up in 2024. More importantly, in the hotel and travel market, Douyin has increased its service fee rate, and the adjusted rate is close to that of Ctrip and Meituan, which may lead to a more relaxed market competition.
The market exchanges price for volume. According to data from the Ministry of Culture and Tourism, the tourism market during the Spring Festival, May Day, Dragon Boat Festival, and Mid-Autumn Festival in 2024 all performed well. The year-on-year growth rates of domestic trips for the four holidays were 19.00%, 28.00%, 15.00%, and 6.00%, respectively. The year-on-year growth rates of total expenditure for domestic tourists were 8.00%, 14.00%, 3.00%, and 8.00%, respectively.
During the National Day holiday, the tourism market continued to recover, with the number of domestic trips and total expenditure exceeding the levels of 2019.
It should be noted that in 2024, the characteristic of tourists traveling off-peak was obvious. Ctrip data shows that about 30% of users chose to depart early, and the travel orders for the first weekend after the National Day were strong, which means that the real data of the tourism market during the 2024 National Day holiday may be "underestimated."
More importantly, the domestic tourism market also shows the characteristic of "exchanging price for volume." In terms of tourism consumption, the average expenditure per person for domestic tourism during the National Day holiday was about 916 yuan, a year-on-year increase of 0.40% at comparable terms, recovering to 98.00% of the same period in 2019.New Balance Pattern
It should not be overlooked that, despite Ctrip's strong strength, in the face of the large cake of the hotel and travel industry, competitors must be envious. Companies such as Meituan, Xiaohongshu, and Douyin have all entered this field.
According to Choice data, Meituan combines hotel and travel with in-store business statistics and does not disclose them separately. However, it cannot be denied that the growth rate of Meituan's hotel and travel business is not to be underestimated. In the second quarter of 2024, Meituan's in-store and hotel and travel business order volume increased by more than 60.00% year-on-year, and the number of annual transaction users and annual active merchants both reached historical highs. At the same time, the commission income of the core local business department was 22.108 billion yuan, a year-on-year increase of 20.14%, and it has maintained a double-digit growth rate for eight consecutive quarters.
As content platforms, Xiaohongshu and Douyin's way of entering the hotel and travel market is slightly different. Xiaohongshu initially cooperated with OTA platforms such as Ctrip and Tongcheng Travel in terms of traffic guidance. Based on a large number of daily active users, it guided traffic for OTA through the way of "planting grass" and earned corresponding commission income.
However, as Xiaohongshu's commercialization deepens, it has begun to attract homestay and hotel and travel merchants to enter the platform and launched targeted group buying projects. Merchants can sell accommodation and catering packages on Xiaohongshu.
In contrast, Douyin, with more than 700 million daily active users, has invested a lot of resources in the hotel and travel business. Douyin's way of entering the game is similar to Xiaohongshu's, but in 2021, Douyin's life services officially started. It successfully attracted a large number of merchants to settle in with a commission rate far lower than that of OTA platforms and decoupled from OTA platforms.
From the data, the technical service fee for hotels and homestays on traditional OTA platforms and Meituan is about 10.00%. In order to grab merchant resources, Douyin reduced the technical payment to about 4.00%. From 2021 to 2022, the performance of traditional OTA platforms was indeed significantly impacted. However, due to the impact of public safety and health events, it is difficult to estimate how much the low commission policy of Douyin has impacted the performance of traditional OTA platforms such as Ctrip and Tongcheng Travel.
However, according to the prediction of PuYin International, in 2023, Douyin's hotel and travel GMV is about 60 billion yuan, close to one-fourth of Meituan's, and the market share has increased from 2.00% to 3.00%. It is expected that in 2024, Douyin's hotel and travel GMV will reach 90 billion yuan. From this data, for Ctrip, Douyin is a competitor with great growth potential.
It should be noted that in June 2024, Douyin's life services issued a software service fee announcement for the third quarter of 2024. Among them, the accommodation service fee rate will be increased from 4.00% to 8.00%. Douyin has driven the rapid growth of hotel and travel business with low service payment rates, but before the National Day tourism peak season, it increased the rate to a level close to that of Ctrip and Meituan, which will obviously have a certain impact on its hotel and travel business.
There are voices in the market that believe that in the domestic hotel and travel market, traditional OTA platforms represented by Ctrip and companies such as Meituan and Douyin are in a delicate balance. In the short term, it is difficult for all parties to significantly increase their market share, and market competition is slowing down. Therefore, Douyin chooses to adjust the low service fee strategy and "level" its service fee rate with the industry.It should not be overlooked that in the travel and hospitality market, Douyin also has its inherent disadvantages. Content platforms rely on the "planting grass" effect, stimulating users to generate travel needs and purchase hotel packages in advance. This type of consumption has a strong impulsive attribute, which leads to a lower redemption rate for Douyin's travel and hospitality sector compared to its competitors. In contrast, OTA platforms are based on users' proactive searches to fulfill planned needs, and the consumption generated by planned needs is more stable.
A research report from Haitong International shows that the average redemption rate for Douyin's local lifestyle as a whole is only 20.00%, while Meituan's redemption rate is as high as 40.00 to 50.00%.
Therefore, as long as traditional OTA platforms can maintain good operations, merchants are more willing to use Douyin as a platform for promotion and marketing.