The Zhitong Finance App learned that Anxin International released a research report saying that domestic travel revenue/number of people during the National Day holiday increased 6.3%/5.9% year on year, and per capita consumption remained the same year on year. Domestic air tickets and hotels showed a trend of increasing and falling prices. Passenger traffic for civil aviation increased 11% year on year, average economy class price decreased 15% year on year, hotel occupancy rate increased 11 percentage points year on year, and ADR decreased 8% year on year. Maintain TRIP.COM-S (09961) and Tongcheng Travel (00780) annual performance forecasts for 2024, and be optimistic about the agility of OTA operations and the certainty of performance amid changes in travel consumption trends.

Anxin International's main views are as follows:

Domestic travel market performance was stable during the National Day holiday

Domestic tourism revenue during the 2024 National Day holiday (7 days) was 700.8 billion yuan, in line with previous expectations. The number of domestic tourists increased 6.3% year on year under a comparable scale (that is, the average daily data); the number of domestic tourists was 0.765 billion, up 5.9% year on year; tourism revenue/number increased 7.9%/10.2% compared to the same period in 2019, and the number of visitors recovered faster than revenue. In terms of per capita travel spending, the National Day in 2024 is 916 yuan/person, which is the same as last year's National Day holiday (8 days), reflecting that travel consumption is still affected by weak macroeconomic spending.

Domestic hotels & air tickets continue to increase and fall in price

Air tickets: During the National Day, the average daily passenger volume of domestic civil aviation was 2.3 million, up 11% year on year, up 22% from the same period in 2019; economy class ticket price was 845 yuan, down 15% year on year. Hotels: The overall occupancy rate of domestic hotels during the holiday season was 70%, a significant increase from 59% in the same period last year. The occupancy rate of budget hotels was 72%, the best performance. The occupancy rate of mid-range, high-end and luxury hotels increased year-on-year, but they were all weaker than the 2019 performance. In terms of prices, the average price of domestic hotels decreased by 8%/2% yoy compared to 2019, but the year-on-year decline was narrower than in the second quarter.

OTA platform data

Ctrip: The average number of inbound and outbound daily orders reached a record high. Among them, the average number of inbound travel orders per day increased nearly 80% year over year, and the average daily outbound travel orders of fourth- and fifth-tier users increased 1 time/3 times year over year. Tongcheng Travel: The popularity of four-star hotel reservations increased 36% year over year, ahead of other star stars. The popularity of hotel reservations in nearly 100 counties increased by more than 50% year over year. Where to go: Domestic air tickets and hotel bookings increased significantly year on year. The average ticket price decreased by 10% year on year, and ADR for high star hotels decreased 15% year over year. The average price of international air tickets and hotels decreased 15% year over year. Flying Pig: Domestic high-star hotel bookings grew strongly, with outbound travel bookings increasing by more than 50% year on year.

New travel trends

Combined with OTA platform data, we have observed new trends in the current travel market: booking windows have been further shortened, and the trend of erroneous travel is obvious. According to Ctrip data, the 2024 National Day reservation window was 6.8 days in advance, compared to 6 days in the same period last year (12% shorter). Of these, about 30% of travelers booked the same day or one day in advance. At the same time, about 30% of users left early, and travel orders for the first weekend after the National Day were strong.

The growth rate of outbound travel is strong, and user destinations are fragmented. Although Japan, South Korea, and Southeast Asia still account for nearly 80% of outbound travel destinations, some long-term destinations are recovering strongly. At the same time, users in third-tier cities and below prefer short outbound trips, while first-tier users are gradually increasing the number of outbound long-term outbound trips. Anxin International believes that new travel trends have some reference value for supply-side adjustments, and that the operational agility advantage of OTA platforms will be amplified.

Investment advice: Maintain Ctrip and Tongcheng Travel's 2024 annual performance forecasts. Ctrip's annual revenue is expected to increase 17% year on year and the annual net profit margin is 31%; Tongcheng Travel's core OTA business revenue is expected to increase 20% year on year, with an overall adjusted net profit margin of 15.5%. Ctrip's current price corresponds to 17.4x/16.1x 2024/2025 price-earnings ratio, while Tongchengtravel has a price-earnings ratio of 14.7x/12.2x 2024/2025. The valuation is quite attractive. I am optimistic about Ctrip's supply-side advantage and medium- to long-term potential for inbound and outbound travel, and I am optimistic that Tongcheng Travel's user size advantage and repurchase rate growth will drive up user value.

Risk factors: Weak consumption affects travel spending; outbound travel recovery is less than expected.