ChinaTravelNews, Ritesh Gupta – Meituan has shared that its promotional efforts, including the decision to offer deals, resulted in a steady performance of its hotel and travel division in the third quarter (Q3) of this year.
Speaking during the company’s Q3 earnings call, Meituan’s CEO, Wang Xing, said, “…thanks to our decade-long experience in this sector, and the rapid growth in online penetration, our in-store, hotel and travel business maintain very high growth in Q3. In this environment, more and more consumers prefer value-for-money selections online. They are more price sensitive and usually compare prices on different channels before they make a purchase decision,” He added, “…we offer a broad range of coupons and package deals in more affordable prices and apply walk-in prices. Through our regular operation, we have gained strong consumer mindshare in finding stores and discount platforms which can help us adapt to the changing consumption trend.”
To generate traffic, engage users and convert them, Meituan has worked on several initiatives over the past few months. The company shared that the number of live-streaming sessions on its platform rose considerably. “…the average number of live stream sessions a day during September increased by 300% from June,” said Wang.
One of the highlights in this context was to rely on artificial intelligence (AI) tools to cut down on entry barriers for merchants and pave the way for them to conduct live streaming sessions on its platform. This also meant that the overall transaction volumes of “Special Deals” went up. The company has been emphasizing that the combination of “Special Deals” and live streaming programs is resulting in building a connection between merchants and consumers via its platform. “During the National Day Golden Week, we also launched a variety of holiday-themed promotions that in both value transaction value of in-store, hotel and travel (division) increased by over 150% versus 2019,” said Wang.
For live streaming, the company ensured that such initiatives are supported by ample buzz in terms of promotions and marketing campaigns. Some of the campaigns followed on previous quarter’s work. For example, the recent “2023 Must-Eat List” as well as the “Must-Eat Set Meals” to provide consumers with more recommendations and discounted deals.
The marketing team also focused on themed activities and other campaigns around travel scenarios, and collaborated with local governments to support local consumption.
“During the National Day holiday, we also witnessed strong growth from travel scenarios, like at hotels, airports, and train stations,” said Wang. The company shared that its in-store, hotel and travel business continued to grow robustly, with GTV increasing by over 90% year over year in the third quarter. Quarterly active merchants grew by over 50% year-over-year, and quarterly transacting users also increased substantially. “We are glad to see our quarterly active merchants and quarterly transacting users both reach record high,” stated Wang.
Working with hotels
Meituan continued to work on joint marketing events with hotel companies.
This included joint-membership programs and thrust on augmenting its overall pricing capability.
“In August, we unveiled the “Must-Stay List for 2023”, featuring a selection of over 900 hotels. We expanded our promotional efforts through live streaming and worked on marketing collaborations with high-star hotel chains,” said Wang.
He also shared, “…merchants on our “Must-Stay List” experienced 120% increase number of bookings (during the quarter) compared to the pre-holiday period.”
“For small and medium-sized hotel merchants, we made our best effort to understand their different operational needs and pain points. We help them (to) improve traffic acquisition, provide (them) room renovation solutions, and broaden the promotional channel, all aimed at boosting their earnings,” said Wang. He also added that the team has improved the platform’s self-service capabilities in order to help “consumers make more efficient and better-informed choices and enhanced the host's operational efficiency”.
For its overseas bookings, Meituan recently signed a deal with Agoda. The two companies have jointly launched "Chinese Preferred" hotels in around 1,000 destinations globally. It was also shared that between January and August this year, Meituan's bookings for overseas accommodations surpassed the total for the entire year of 2019, with particularly robust booking activity in regions such as Hong Kong, Macau, Southeast Asia, Japan and Korea.
Outlook
The team shared that operating profit remained relatively stable compared to Q2. The sequential decline in operating profit margin was mainly due to increased marketing efforts to capture peak season opportunities.
“Looking ahead, service retail will continue to be a key growth engine of China's economy… We are confident that our in-store hotel and travel business will continue to benefit from the progress,” said Wang.
