Top Travel Agent Group Achieves Revenue of CNY 9.2 Bn in Q1 2023, Up 124% YoY

Consumer Discretionary Author: Zhisheng Wang, Yiran Xing Editor: Yiran Xing Jun 08, 2023 04:01 PM (GMT+8)

With the adjustment of pandemic prevention and control policies, the markets of domestic tourism, inbound tourism, and outbound tourism are experiencing new circumstances. James Liang, Executive Chairman of Group, said, “During the first quarter of 2023, there has been an upsurge in both domestic and outbound travel activities in China. We are encouraged to see the world becoming more open and connected at the start of 2023."

travel Group Limited (hereinafter referred to as “ Group”, Chinese: 携程集团, Nasdaq: TCOM; HKEX: 9961), headquartered in Shanghai, recently announced its unaudited financial results for the first quarter ended March 31, 2023. The financial results show that in Q1 2023, Group reported net revenue of CNY 9.2 billion (USD 1.3 billion), representing a 124% increase from the same period in 2022, and net profit of CNY 3.4 billion, a turnaround from a net loss of CNY 989 million in Q1 2022.

In terms of the main business segments, in Q1 2023, accommodation reservation revenue was CNY 3.5 billion, representing a 140% increase from the same period in 2022; transportation ticketing revenue was CNY 4.2 billion, up 150% year-on-year; packaged-tour revenue was CNY 386 million, up 211% over the previous year; corporate travel revenue was CNY 445 million, an increase of 100% from the same period last year.

Domestic and international businesses continued to show robust recovery in the first quarter of 2023. Domestic hotel bookings grew by more than 100% year over year. Same-city staycation hotel bookings grew by 150% compared to those for the same period in 2019, the pre-COVID level. Outbound hotel and air reservations recovered to over 40% of those for the same period in 2019, the pre-COVID level, despite a 15% recovery in the overall outbound aviation market. Air-ticket bookings on the company’s global OTA platforms grew by over 200% year over year, and grew by over 100% compared to those for the same period in 2019, the pre-COVID level.

Founded in 1999, Group is a leading global integrated travel services company and the largest online travel company in the world in terms of transaction volume. Group has successfully integrated the high-tech industry with the traditional travel industry, providing users with leisure travel and business travel services and offering highly valuable references. With its stable business development and excellent profitability, Group achieved a successful listing on NASDAQ, resulting in a notable record for the highest opening day gain on the NASDAQ in three years. In April 2021, Group was officially listed on the Main Board of the Stock Exchange of Hong Kong, China.

It is noteworthy to state that Group's "Travel Marketing Hub" has been functioning effectively since 2023, relying on its comprehensive travel service system to generate additional value with its collaborators as the market rebounds. In Q1 2023, there was an observed increase of almost 60% in the number of hotels that were incorporated into the United Membership Program of Group as compared to the same period in the previous year. The cumulative count of in-store service recipients provided to the affiliated hotels surpassed 20 million, resulting in a cost savings of approximately CNY 40 million for the hotels in terms of marketing expenses. Through cross-marketing strategies that involve the promotion of air tickets and hotels, Group managed to yield a noteworthy increase of over 100% year-on-year in new users, 200% year-on-year in orders, and 300% year-on-year in transaction volume for its hotel partners.

In terms of overseas business, Group has been accelerating its globalization strategy. At present, Group's travel business has spread to over 200 countries and regions around the world, with more than 30,000 channel partners and millions of hotels and travel routes, serving more than 400 million members worldwide. In 2016, Group strategically invested in MakeMyTrip, the largest travel company in India, and acquired the world's leading travel search platform, Skyscanner. In 2019, Group and Amazon Web Services (AWS) collaborated to build an overseas cloud infrastructure base. In April 2023, Group announced it would further build a joint innovation lab with AWS, the world’s most comprehensive and broadly adopted cloud. The joint lab aims to use experts from AWS and to develop new technologies that will improve the online travel provider’s travel and services.

The major competitors of Group include Chinese companies such as Meituan (Chinese: 美团) and Tongcheng Travel (Chinese: 同程旅行), as well as international players such as TripAdvisor from the U.S., Hotelurbano from Brazil, and from the Netherlands.

As of press time, Group closed at USD 34.29 apiece, with a market cap of USD 23.44 billion.