ChinaTravelNews, Ritesh Gupta - Tongcheng Travel Holdings has shared that its revenue from the accommodation business increased by over 73% year-to-year to RMB 882.5 million in the fourth quarter (Q4) of 2023.
The online travel company has been working on plans to target different scenarios for selling accommodation in the domestic market. For instance, requirements for booking accommodation around events like music festivals and concerts. The team at Tongcheng Travel acknowledged that this trend picked up in the last year or so, and hence the focus was ensuring that any demand resulting from music festivals and concerts was catered in China.
It was also mentioned that the younger audience is open to planning spontaneous trips and are on the lookout for "unique, trending destinations that can spark discussions on social media platforms". In terms of marketing campaigns, Tongcheng chose to run promotional campaigns for hotel stays surrounding examination venues.
Also, the team focuses on its cross-selling tactics, mainly capitalising on what the termed as “significant traffic” from its transportation business, and then relying on insights into shoppers’ primary preferences and needs to boost the hotel accommodation category. Tongcheng shared that the domestic room nights sold registered over 70% growth compared with the same period of 2019.
The international room nights sold for Q4 fully recovered to the level in 2019, stated the company.
Revenue from accommodation reservation services increased by 61.5% to RMB 3899.5 million for 2023, as compared to the previous year.
In Q4, revenue from transportation ticketing services increased by 94.9% year-to-year to RMB 1,472.8 million. In addition to air-ticketing, other categories in the transportation ticketing business include train, bus, and car-hailing segments.
Overall, revenue rose by nearly 81% to RMB 11,896.2 million at the end of 2023.
The share of various divisions was - transportation ticketing services (50.7%), followed by accommodation reservation services (32.8%) and other categories combined (16.5%).
Tongcheng also shared that revenue from transportation ticketing services increased by 78.5% to RMB 6030 million for 2023 as compared to the previous year. Specifically, for Q4, the air ticketing volume rose by 16% (year-on-year growth), same for both the domestic as well as the international segments in Q4, as compared to the same quarter for 2019.
Adjusted net profit increased by 1,188.3% to RMB482.5 million in Q4 of 2023.
User base
Tongcheng shared that it is looking at ways to boost loyalty via its Black Whale membership program. A couple of initiatives that were taken last year included price protection and free cancellation. The team also stepped up its personalised touch, be it for guiding in itineraries or the service support. Another major initiative has been around more efficiency in automation in its customer service by handing over standardized problems to AI-driven robots.
As for new users, Tongcheng is looking at multiple channels, even though new paying users on Weixin are its major strength. Other channels include Alipay mini-program, working with handset vendors, standalone apps (for high-value users) plus offline sources (targeting traffic volume of metro and intra-city buses). The company shared that the offline user acquisition initiatives contributed significantly to its MPUs for Q4. Marketing initiatives around e-sports games, too, has been an area of focus to target the younger demographic. In terms of what's growing in popularity, Tongcheng chose to target skiing activities and launched a series of skiing events in Xinjiang and Jilin to reinforce its brand influence among younger users.
In terms of expanding its penetration beyond the main cities, Tongcheng shared that registered users residing in non-first-tier cities in China accounted for approximately 86.9% of the total registered users. Even as the company continues to expand its user base, the contribution of its registered users from non-first-tier cities remains the same, as it was around 87% at the end of June last year as well.
Around 73% of its new paying users in the last quarter on the Weixin platform were from non-first-tier cities in China.
Average MPUs increased by 54.3% year-to-year from 24.3 million in Q4 of 2022 to 37.5 million in the fourth quarter of 2023.
