Recent data from the Ministry of Culture and Tourism highlights a total of 295 million domestic trips during the holiday, a jump of 28.2% over the same period in 2019.

This growth is largely facilitated by sophisticated transportation networks and digital booking systems that cater to a diverse range of consumer preferences. Cities like Guangxi’s Liuzhou, Shandong’s Zibo, and Gansu’s Tianshui have gained popularity, driven by improved accessibility and digital visibility.

The financial implications are significant, with total tourism spending reaching 166.89 billion yuan, marking a 12.7% increase year-over-year. This economic uplift is supported by technological enhancements in payment systems and personalized marketing, which help tap into changing consumer behaviors more effectively.

The Ministry of Transport reports a cross-regional movement of approximately 136 million people during the period, facilitated by robust rail and road networks.

Technological improvements in these areas have not only improved the efficiency of travel but have also enhanced the overall user experience by streamlining processes such as ticket purchasing and real-time traffic management.

China witnessed a remarkable surge in tourism activities, with domestic travels reaching 474 million, a 34.3% increase from the previous year and a 19.0% rise compared to the same period in 2019, according to data from China Ministry of Culture and Tourism.

This period saw domestic tourists spending a staggering 632.687 billion yuan, marking a 47.3% year-on-year increase and a 7.7% growth from 2019 levels.

On average, each traveler expended approximately 1,335 yuan, underscoring the sector’s robust recovery and the growing enthusiasm for travel among the Chinese populace.

In addition to domestic travels, cross-border tourism also saw a significant uptick, with about 6.83 million inbound and outbound trips. The distribution between outbound and inbound travels was fairly balanced, with approximately 3.6 million outbound trips and 3.23 million inbound trips, highlighting China’s appeal as both a premier global travel destination and a significant source market for international tourism.

The cultural and entertainment sectors benefited from this travel boom, with 16,300 commercial performances happening nationwide, witnessing a 52.10% increase over the previous year.

These performances generated 778 million yuan in ticket sales, up 80.09% from the previous year, and attracted 6.5765 million attendees, marking a 77.71% increase year-over-year.

The 2024 Spring Festival film market set new records, with total box office revenues reaching 8.023 billion yuan. This achievement was supported by an unprecedented number of cinema-goers, 163 million, and screenings, 3.937 million, highlighting the entertainment industry’s significant role in China’s tourism and cultural landscape.

Reflecting on the entire year of 2023, domestic travel figures reached 48.91 billion trips, a 93.3% increase from the previous year.

Urban and rural residents alike contributed to this surge, with urban residents undertaking 37.58 billion trips (a 94.9% increase) and rural residents accounting for 11.33 billion trips (an 88.5% increase).

The total expenditure by domestic tourists soared to 4.91 trillion yuan, up 140.3%, indicating a robust demand for travel and leisure activities.

These statistics underscore the resilience and potential of China’s tourism industry, signalling the start of a new growth era in the post-pandemic world.

As travel restrictions ease and consumer confidence returns, the sector is poised for further expansion, promising significant economic benefits.

On May 3rd, the Ministry of Culture and Tourism released travel data for the holiday period, showing that domestic tourists reached 274 million and the domestic tourism revenue hit 148.06 billion yuan (US$21.41 billion), both surpassing the same period in 2019.

Online travel platforms, including Ctrip, Tongcheng, Tuniu, and Fliggy, also reported record-breaking data for the Labor Day holiday.

Scenic spots saw a 9-fold increase in ticket sales compared to last year.

According to Ctrip’s “2023 Labor Day Travel Data Report,” the top five popular scenic spots were Shanghai Disneyland Resort, Humble Administrator’s Garden, Huangshan Scenic Area, Mount Emei, and Mount Hua.

Family tourists, particularly those with children, contributed significantly to the surge in visitors, with theme parks, zoos, and museums accounting for more than half of the top ten popular spots.

The preference of tourists diversified during this year’s Labor Day holiday, with a more robust demand for high-level cultural products. Museums such as the Palace Museum, the National Museum of China, Shaanxi History Museum, and others saw their ticket sales fully booked for several consecutive days. Immersive performances, river cruises, and intangible cultural heritage shows were also in high demand.

Cross-provincial travel accounted for more than 70% of hotel bookings, with the average distance traveled by tourists increasing by 25% compared to last year. This year’s holiday saw a trend towards longer trips, with group tours lasting five days or more making up 30% of bookings, up from 20% in 2019.

Besides traditional popular destinations like Beijing, Shanghai, and Hangzhou, smaller destinations like Zibo also witnessed a surge in popularity.

Driven by the phenomenal popularity of “Zibo Barbecue,” hotel bookings in Shandong Province increased nearly threefold compared to the same period in 2019, with Zibo’s hotel bookings increasing more than tenfold.

Experts predict that while the domestic tourism market will stabilize after the Labor Day holiday, the summer peak season will see another surge in student and family travel. However, as some tourists opt for outbound travel during the summer, the domestic tourism heat is expected to be less intense compared to this Labor Day holiday.

To maintain the positive momentum in tourism consumption, local authorities must continue to innovate their offerings, implement more precise branding and marketing strategies, and continuously upgrade their service levels to promote the role of tourism consumption in economic growth.

Gen-Z Insights: capturing attention of China’s post-95s consumers

Domestic tourism revenue during this period reached 375.843 billion yuan (US$73.29 billion), up 30% year on year, and recovered to 73.1% in the same period of 2019.
During the CNY festival, 10,739 A-level tourist attractions were opened normally, accounting for 73.5% of the total number of A-level tourist attractions in China. About 110,000 mass cultural activities were held nationwide, with about 473 million participants.

The 243 national-level night culture and tourism consumption clusters have 52.122 million visitors, with an average of 30,600 passengers per night in each cluster.

The number of tourists received by Sichuan province ranked first, reaching 53.8759 million, and the tourism revenue reached 24.216 billion yuan, up 24.73% and 10.43%, respectively, year on year, recovering to 89.73% and 84.75% of the CNY 2019. Compared with the total tourism revenue, Yunnan contributed 38.435 billion yuan of tourism revenue in seven days.

According to Qunar data, each traveler traveled 400 kilometers more than last year, and the outbound air ticket was 6.7 times more than that in 2022.

As of January 26, during CNY in 2023, the number of air tickets booked in popular cities had exceeded that before the epidemic (the CNY in 2019).

In 2023, the average price paid for air tickets during CNY was 845 yuan, the same as before the epidemic.

According to Qunar CEO Chen Gang, there will be more opportunities in overseas markets in 2023. During CNY, outbound air tickets increased by 6.7 times over the same period in 2022. The top 5 destinations are Thailand, Hong Kong, Malaysia, the United States, and Indonesia. With the increase in flight supply, it is expected that the number of international air tickets and international hotel reservations will continue to grow.

Duty-free consumption in Hainan continued to be popular. According to Haikou Customs statistics, from January 21 to 27, Haikou Customs supervised 1.56 billion yuan in sales of duty-free shopping, an increase of 5.88% over the CNY holiday in 2022;

The number of duty-free shoppers was 157,000, an increase of 9.51% YoY; per capita consumption is 9,959 yuan.

According to Ctrip data, this year’s Spring Festival, cross-border ticket bookings increased more than four times year-on-year. Bangkok, Singapore, Kuala Lumpur, Chiang Mai, Manila, and Bali have become the most popular international travel destinations for Chinese tourists.

Mao Ning, a spokesman of the Ministry of Foreign Affairs of China, responded that during the Spring Festival this year, the number of people leaving the country exceeded 2.87 million, with an average of 410,000 per day, an increase of 120.5% over the same period last year. The overall order for outbound travel of Chinese tourists increased by 640% year on year, and the order for air tickets increased by more than four times.

Mobile payment trends in China outbound tourism

Domestic tourism revenue was RMB 26.517 billion, a year-on-year increase of 4.0% and a comparable recovery of 35.1% compared to the same period in the 2019 New Year’s Day holiday.

“Cold escape” is still the first choice for Chinese travelers. Traveling to warmer climes is a favorite. Southern China’s mild winter weather attracts many tourists at home and abroad to escape from the cold. Tourism in rural areas of Guangdong cities such as Meizhou, Qingyuan, and Shantou was a particular bright spot.

According to Alibaba’s OTA platform Fliggy, the amount of tourism bookings in Hainan destinations increased by more than 50% compared with 2022.

At the same time, during New Year’s Day, the number of tourist merchandise bookings, including keywords such as “seascape”, “island”, and “surfing” increased by more than 60% year on year.

The orders for cross-provincial and trans-city tours accounted for nearly 80%, reaching the peak in nearly a year. More than 70% of the post-90s and post-00s young users became the main force during this holiday.

Trip.com’s international business maintained rapid recovery, with the overall air-ticket bookings on global platforms increasing over 100% year over year.

Its total net revenue increased by 29% year over year and increased by 72% quarter over quarter to RMB6.9 billion (US$969 million), mainly driven by the robust recovery in China’s domestic market and overseas markets.

• Accommodation reservation revenue was RMB2.9 billion (US$408 million), representing a 32% increase YoY or 114% increase QoQ
• Transportation ticketing revenue was RMB2.6 billion (US$369 million), representing a 44% YoY or 49% QoQ
• Packaged-tour revenue was relatively stable at RMB387 million (US$54 million) compared to the same period in 2021. Packaged-tour revenue increased by 217% from the previous quarter
• Corporate travel revenue was RMB370 million (US$52 million), representing a 9% YoY or 76% increase QoQ

Net income for the third quarter of 2022 was RMB245 million (US$34 million), which improved from a net loss of RMB868 million for the same period in 2021 and a net income of RMB43 million for the previous quarter.

Adjusted EBITDA for the third quarter of 2022 was RMB1.4 billion (US$198 million), representing a 164% increase from RMB537 million for the same period in 2021 and a 300% increase from RMB355 million for the previous quarter.

Adjusted EBITDA margin was 21% for the third quarter, compared with 10% for the same period in 2021 and 9% for the previous quarter.

As of 12:00 on 8 December, the travel search popularity for 2023 last week had increased by more than 900% compared with the same period last year. Within two hours after the release of the New Year’s holiday schedule on 8 December, the search volume of Trip.com’s air tickets and hotel products increased by 6 times and 7 times respectively from the same period the previous day.

The COVID-19 prevention and control policies have a great impact on the tourism and leisure consumption of urban and rural residents across the country. The passenger flow in Jiuzhaigou, Hangzhou West Lake, and other scenic spots decreased significantly compared with previous years.

The domestic tourism revenue reached 64.68 billion yuan, a year-on-year decrease of 42.9%, returning to 44.0% in the same period before the epidemic.

The total number of tourists received in Beijing was 3.061 million, and the total tourism revenue was 1.58 billion yuan. In 2021, Beijing received 8.426 million tourists, with total tourism revenue of 9.3 billion yuan.

Jiangsu has received 8.4519 million tourists, with a total tourism consumption of 4.07 billion yuan. In the “May Day” in 2021, Jiangsu received 35.3757 million tourists, realizing a total tourism revenue of 30.113 billion yuan.

The average occupancy rate of Sanya hotel was 20.57%, a year-on-year decrease of more than 60%.

According to the data of China Index Research Institute, during China’s May Day holiday this year (April 30 to May 4), the transaction of new commercial houses in key monitoring cities decreased by 52.3% compared with last year’s May Day holiday.

According to Pengpai news reports, the transaction scale of new houses in most representative cities decreased year-on-year, with a year-on-year decrease of more than 50% in Wuhan, Suzhou, and Wenzhou.

Gen-Z Insights: capturing attention of China’s post-95s consumers

83.0% of its average MAUs was attributed to Tencent-based platforms with the majority of the traffic coming from WeChat Pay portal and the dropdown list of users’ favorite or most frequently used mini-programs.

The average MPUs increased by 84.5% year-to-year from 14.8 million in the same period of 2020 to 27.3 million, mainly attributable to its stable traffic on WeChat channels. Read our WeChat Mini Programs Insights 2021.

Paying users for the 12-month period ended March 31, 2021, increased by 12.9% year-on-year from 149.9 million in the same twelve-month period of 2020 to 169.3 million. And, Tongcheng Elong’s paying ratio recovered to 11.7% for Q1 2021.

Revenues increased by 60.6% year-to-year to RMB1,613.8 million from RMB1,005.1 million in the same period of 2020.

Compared with Q1 2019, it has achieved 45.0% growth in its domestic room nights sold, with more than 70.0% growth in lower-tier cities, around 20.0% increase in domestic air ticketing volume, and nearly 150.0% increase in bus ticketing volume.

Its total GMV increased by 83.0% year-on-year to RMB33.3 billion.

The adjusted EBITDA increased by 162.7% year-to-year to RMB417.4 million from RMB158.9 million in the same period of 2020. Adjusted EBITDA margin increased from 15.8% in the same period of 2020 to 25.9%.

The adjusted profit for the period increased by 279.5% year-to-year to RMB296.3 million from RMB78.1 million in the same period of 2020. The adjusted net margin increased from 7.8% in the same period of 2020 to 18.4%.

Tongcheng-Elong cooperated with short video platforms to promote its hotel and tourist attraction products. Besides, it has commenced cooperation with a leading e-commerce platform in China by providing its travel-related products and services on the platform, to explore new traffic sources and further penetrate into lower-tier cities market.

It also cooperated with hotels to set up QR code scanning function to convert traffic from offline to its WeChat mini-program.

Mini Program platforms 2021: WeChat vs. Alibaba vs. Baidu

The added value of the tourism industry was 4,075.8 billion yuan, accounting for 90.6 percent of the total added value of tourism and related industries while the related industries contributed to 9.4%.

Within the tourism industry in China, tourism shopping was the largest segment in 2019, with an added value of 1,407.7 billion yuan, accounting for 31.3% of the added value of all tourism and related industries, followed by transportation, with an added value of 1,205.5 billion yuan, accounting for 26.8% of the added value of all tourism and related industries.

In terms of growth rate, tourism entertainment, tourism accommodation, and comprehensive tourism services developed rapidly, with nominal growth of 12.9%, 10.4% and 10.0% respectively compared with the previous year.

Sales of admission tickets for amusement parks rose by 437% on JD compared with the same period last year. Sales of suburban amusement tours increased by 153%, in which sales were up 300% in several scenic destinations areas in Beijing, Xinjiang, Yunnan, etc.

Hotel sales went up by 106% on JD, and hotel stay &entertainment package sales were 6 times more than the same period last year. Domestic flight tickets sales were up 172% while mobile payment services surpassed 427%.

JD Travel is part of JD’s Life & Services business group. Other services include automotive maintenance, online real estate purchase, online auction and fresh flowers booking.

With over 100,000 products from 30,000 well-known brands offered online which in turn activate over a million offline business, JD Life & Services is providing a variety of promotions during 618, many of which represent more than 50% discounts.

The growth of consumption of daily life services signifies the beginning of an overall economic recovery. JD Life & Services for consumers is playing an active role in integrating online and offline, and retail and services.

Check out 618 Shopping Festival: Taobao vs. JD

Tongcheng-eLong’s average MPUs increased by 21.5% year-to-year from 22.3 million in Q4 2018 to 27.1 million in Q4 2019.

Its revenue increased by 24.4% year-to-year to RMB1,956.5 million in Q4 2019. And, the adjusted EBITDA increased by 47.7% year-to-year to RMB415.1 million. Adjusted EBITDA margin increased from 17.9% YoY to 21.2%.

The adjusted profit for Q4 2019 increased by 67.7% year-to-year to RMB 331.1 million in Q4 2019. The adjusted net margin increased from 12.6% in Q4 2018 to 16.9%.

In 2019, the average MAUs of Tongcheng-eLong increased by 17.1% year-to-year from 175.2 million in 2018 to 205.2 million. And, the average MPUs increased by 34.5% year-to-year from 20.0 million in 2018 to 26.9 million.

The total GMV grew by 26.3% to 166.1 billion yuan in 2019. eLong’s paying ratios also increased from 11.4% in 2018 to 13.1% in 2019.

In 2019, Tongcheng-eLong’s total revenue increased by 21.4% from RMB 6,090.8 million in 2018 to RMB7,392.9 million in 2019.

Adjusted profit for the year increased by 35.4% from RMB1,140.7 million in 2018 to RMB1,544.3 million in 2019 and adjusted net margin for the year was 20.9% in 2019, representing an increase from 18.7% in 2018.

As of December 31, 2019, approximately 85.6% of its registered users resided in non-first-tier cities in China. About 62.4% of newly acquired paying users in WeChat were from tier-3 or lower-tier cities in China, which increased from 61.1% over the same period of 2018.

Currently, WeChat users can access its mini program within the WeChat ecosystem through:

1. WeChat Pay (Wallet) portal and a drop-down list of users’ favorite or most frequently used mini programs, which generated an average MAUs of 113.6 million in 2019, accounting for 65.7% of the total average MAUs of its Tencent-based platforms.

2. Interactive advertisements placed on the Tencent-based platforms, which generated an average MAUs of 37.7 million in 2019, accounting for 21.9% of the total average MAUs of its Tencent-based platforms.

3. The sharing and search functions in WeChat, which generated an average MAUs of 21.5 million in 2019, accounting for 12.4% of the total average MAUs of its Tencent-based platforms.

In addition, the average MAUs in its native apps recorded a faster growth than that in WeChat channel in the second half of 2019, mainly due to the expanding investments in marketing and R&D resources.

As of December 31, 2019, Tongcheng-eLong online platforms offered over 6,800 domestic routes and around 1.4 million international routes operated by more than 400 domestic and international airlines, over 2.0 million hotels selections and alternative accommodation options, approximately 346,000 bus routes, over 500 ferry routes and approximately 8,000 domestic tourist attractions ticketing services.

It has launched an accommodation upgrade service “WeChat Payment Point” with Tencent and an online seat selection service for international flights with China Southern Airlines with the implementation of NDC technology.

For the first quarter of 2020, it expects net revenue to decrease by about 42% to 47% year over year due to COVID-19.

In the first quarter and the whole year of 2020, the number of domestic tourists will decrease by 56% and 15.5% respectively according to China Tourism Academy. 2020 will see a decrease of 932 million person-trips. See the forecast here.

Airbnb released a report last week on Airbnb China’s women community. According to the report, as of February 10, 2020, 53% of active Chinese landlords are female, and China is one of the top 10 countries with the largest number of female landlords on the platform.

Among them, the millennial generation (Generation Y) and generation Z female landlords are the main players on the Airbnb platform. About 67% of female landlords are post-80s, post-90s and post-00s.

In 2019, Airbnb’s global female landlords are expected to earn US$14.9 billion (about 104.3 billion yuan) through shared accommodation, of which China ranks eighth in the world.

The year 2019 registered 6.01 billion domestic tourists person-trips in China, up by 8.4 percent over that of the previous year. Read more here.

Among the global landlords who receive at least 150 person-trips, more than 37% of the five-star rated female landlords are from China.

In 2019, the five-star rating of Chinese female landlords is 88%, higher than that of global female landlords (83%); the average rating of Chinese female landlords is 4.81, higher than that of global female landlords (4.77).

67% of the team leaders of Airbnb Chinese community are women.

The top ten cities with the largest distribution of female landlords are:

• Shanghai
• Beijing
• Chengdu
• Guangzhou
• Chongqing
• Hangzhou
• Shenzhen
• Xi’an
• Qingdao
• Wuhan

Last year, the top ten types of accommodations most favored by Chinese female tourists based on Airbnb report were: Inn, boat house, resort, island, farmhouse, country house, hotel apartment, boutique hotel, hotel, and apartment.

Among the top ten popular destinations most favored by global female tourists, China occupied four seats, namely Changsha in Hunan, Sanya in Hainan, Lijiang in Yunnan, and Beihai in Guangxi.

Among them, single-person travel is more and more popular with Chinese women. In 2019, the proportion of Chinese female tourists traveling alone in China increased by more than 1.6 times.

Characteristics of China outbound travelers in 4 segments

The gap between residents of second-tier and third-tier cities and those from first-tier cities is rapidly narrowing in terms of per capita outbound destinations, travel expenditure, and travel budget according to a report from Nielsen.

On per capita outbound destinations, there was virtually no difference between those in second-tier and first-tier cities.

In terms of per capita annual overseas travel expenditure, the difference between residents in third-tier and first-tier cities significantly dropped from USD 1,7241 in 2018 to USD606 in 2019.

On travel budget for the year 2020, the gap between residents in third-tier and first-tier cities shrank sharply from USD 1,859 in 2018 to USD 614 in 2019. The Nielsen survey also found that Chinese tourists from lower-tier cities had more definite future travel plans.

In 2019, the number of transactions Chinese tourists made via mobile payment continued to increase. On average, Chinese tourists paid via mobile payment 3.4 times out of every 10 payments in 2019, up from 3.2 times in 2018.

Chinese tourists’ focus on shopping had transformed because of more abundant forms of promotional and marketing activities provided by Chinese mobile payment.

European Merchants Accelerated Adoption of Chinese Mobile Payment

92% of Chinese tourists traveling to Europe said they are more likely to pay with mobile phones if more local merchants supported Chinese mobile payment solutions, and 89% said that they are more likely to shop and spend locally.

In the U.K. and France, the percentage of Chinese tourists who used mobile payments increased to 65% in 2019, with per capita mobile spending increased by about 10%.

Mobile Payments Facilitates Digital Operations of Merchants

88% of merchants in the Nielsen survey who have used additional services on Chinese payment platforms recognized that these solutions helped market their stores, and 63% believed that mobile payment and related services improved the efficiency of store management.

Nearly 70% of the U.K. merchants surveyed have begun utilizing services beyond payment on Alipay. 82% witnessed an increase in sales and customer traffic after connecting to the Chinese mobile payment platforms.

The integration of online and offline retail with a more digitized operation has further enhanced the consumer experience for Chinese tourists when traveling overseas and has resulted in a new experience for overseas merchants in their digital transformation.

More Overseas Merchants May Deepen Their Use of Chinese Mobile Payment Platforms

South Korea and Singapore, when it comes to their future store operation and management, 66% of surveyed merchants hope to carry out more digital store operations through Chinese mobile payment, and 66% of them hope to further store promotional and marketing activities leveraging Chinese mobile payment platforms.

Integrated in Alibaba’s ecosystem, Alipay helped merchants realize traffic monetization from both online and offline channels, which is appealing to regions that have embraced Chinese mobile payments.

78% of the U.K. merchants surveyed said that they are likely to recommend Alipay to their industry peers in the future.

Top Travel Destinations

In 2019, destinations within a four-hour flight are still the most popular choices for Chinese tourists. Countries including Japan, South Korea, Thailand, and Singapore are still their favorites. And, the U.S., Australia, the U.K., and Canada are also among the top 10 countries.

Turkey rose to the top 20 destinations for Chinese tourists for the first time in 2019.

Top 5 countries where Chinese tourists love to use mobile payments are Singapore, South Korea, Japan, Australia, and Thailand.

And, the top 10 destinations in 2020 according to Nielsen’s survey are Japan, South Korea, the U.S., Australia, Singapore, New Zealand, France, Thailand, Maldives, and Italy.

The report also shows that lower-tier cities provide more driving force in the Chinese outbound tourism market, niche destinations gradually gained popularity among all age groups, young tourists spent more on a single trip.

CIW subscribers (annual membership) can download the report here.

The year 2019 registered 6.01 billion domestic tourists person-trips in China, up by 8.4 percent over that of the previous year.

The revenue from domestic tourism totaled 5,725.1 billion yuan, up by 11.7 percent. The number of inbound visitors to China totaled 145.31 million, an increase of 2.9 percent. Of this total, 31.88 million were foreigners, up by 4.4 percent; and 113.42 million were Chinese compatriots from Hong Kong, Macao and Taiwan, up by 2.5 percent.

Of all the inbound tourists, overnight visitors counted 65.73 million, an increase of 4.5 percent. Earnings from international tourism topped 131.3 billion US dollars, up by 3.3 percent.

The number of China’s outbound visitors totaled 169.21 million, up by 4.5%. Of this total, 162.11 million were on private visits, an increase of 4.6 percent; and 102.37 million visited Hong Kong, Macao and Taiwan, up by 3.2 percent. Read more on outbound tourism in 2019 here.

China Tourism Forecast in 2020

In the first quarter and the whole year of 2020, the number of domestic tourists will decrease by 56% and 15.5% respectively according to China Tourism Academy. 2020 will see a decrease of 932 million person-trips.

The domestic tourism revenue will decrease by 69% and 20.6% for Q1 and whole year of 2020 respectively, with a year-on-year decrease of 1.18 trillion yuan.

In the first quarter and the whole year, the number of inbound tourists will decrease by 51.7% and 34.7% respectively; and, the revenue of international tourism will drop by 59.8% and 40.6%.

The number of outbound tourists in the first quarter and the whole year of 2020 will decrease by 42.6% and 17.6%, respectively; and the number of outbound tourists will decrease by 27.63 million.

Characteristics of China outbound travelers in 4 segments

China’s leading OTA Ctrip officially changed its corporate name to “Trip.com Group Limited” on October 25, 2019, and its ticker to “TCOM” on November 5, 2019. Trip.com Group operates a family of travel brands, which mainly consists of Trip.com, Ctrip, Skyscanner, and Qunar.

Income from Trip.com operations increased by 52% year-over-year to RMB2.2 billion (US$314 million). Excluding share-based compensation charges, non-GAAP income from operations increased by 40% year-over-year to RMB2.6 billion (US$369 million) in Q3 2019.

The operating margin was 21% for Q3 2019, compared to 16% in Q3 2018, and 15% in the previous quarter. Excluding share-based compensation charges, non-GAAP operating margin reached 25%, the highest margin over the past 6 years.

Trip.com Group’s international businesses (excluding Greater China destinations) sustained robust growth momentum.

• The year-over-year revenue growth rate of international hotel business (excluding Greater China destinations) reached 50% in Q3 2019.
• Trip.com brand’s international air ticketing volume maintained triple digit growth for the 12th consecutive quarter.

For the third quarter of 2019, Trip.com Group reported net revenue of RMB10.5 billion (US$1.5 billion), representing a 12% increase YoY. Net revenue for Q3 2019 increased by 21% from the previous quarter.

Accommodation reservation revenue for Q3 2019 was RMB4.1 billion (US$576 million), representing a 14% increase from the same period in 2018, primarily due to its brand’s extensive global reach, expansion in the global product portfolio, and provision of diversified accommodation choices to prospective customers. Accommodation reservation revenue for Q3 2019 increased by 21% QoQ, primarily due to seasonality.

Transportation ticketing revenue for Q3 2019 was RMB3.7 billion (US$521 million), representing a 3% YoY, primarily due to an increase in international air ticketing and ground transportation ticketing demands. Transportation ticketing revenue for Q3 2019 increased by 9% QoQ, primarily due to seasonality.

Packaged-tour revenue for Q3 2019 was RMB1.6 billion (US$229 million), representing a 19% increase YoY, primarily driven by a significant increase in traffic generated from offline stores and further penetration in lower-tier cities in China. Packaged-tour revenue for Q3 2019 increased by 56% QoQ, primarily due to seasonality.

Corporate travel revenue for Q3 2019 was RMB335 million (US$47 million), representing a 26% increase from the same period in 2018, primarily driven by expansion in corporate customer base and an optimized product mix trend. Corporate travel revenue for Q3 2019 increased by 9% from the previous quarter, primarily due to seasonality.

Trip.com gross margin was 79% for Q3 2019 , which remained consistent with that for the same period in 2018 and the previous quarter.

Product development expenses for Q3 2019 increased by 12% to RMB2.8 billion (US$390 million) from the same period in 2018 and increased by 6% from the previous quarter, primarily due to an increase in expenses relating to product development personnel.

Product development expenses for Q3 2019 accounted for 27% of the net revenue for the same period. Excluding share-based compensation charges, non-GAAP product development expenses for Q3 2019 accounted for 25% of the net revenue for the same period, which increased from 24% in Q3 2018 and decreased from 28% in the previous quarter.

Sales and marketing expenses for Q3 2019 decreased by 8% to RMB2.5 billion (US$347 million) from the same period in 2018, primarily due to a decrease in expenses relating to sales and marketing activities. Sales and marketing expenses increased by 18% from the previous quarter, primarily due to an increase in expenses relating to sales and marketing activities.

Sales and marketing expenses for Q3 2019 accounted for 24% of the net revenue for the same period. Excluding share-based compensation charges, non-GAAP sales and marketing expenses for Q3 2019 accounted for 23% of the net revenue for the same period, which decreased from 29% in Q3 2018 and 24% in the previous quarter.

General and administrative expenses for Q3 2019 increased by 18% to RMB809 million (US$113 million) from the same period in 2018, primarily due to an increase in general and administrative personnel-related expenses. General and administrative expenses remained consistent with the previous quarter.

General and administrative expenses for Q3 2019 accounted for 8% of the net revenue for the same period. Excluding share-based compensation charges, non-GAAP general and administrative expenses accounted for 6% of the net revenue for the same period, which remained consistent with those for the same period in 2018 and decreased from 8% in the previous quarter.

Income from operations for Q3 2019 was RMB2.2 billion (US$314 million), compared to RMB1.5 billion in Q3 2018 and RMB1.3 billion in the previous quarter. Income from operations increased by 52% year-over-year in Q3 2019.

Excluding share-based compensation charges, non-GAAP income from operations was RMB2.6 billion (US$369 million), compared to RMB1.9 billion in Q3 2018 and RMB1.7 billion in the previous quarter. Non-GAAP income from operations increased by 40% year-over-year in Q3 2019.

The operating margin was 21% for Q3 2019, compared to 16% in Q3 2018, and 15% in the previous quarter. Excluding share-based compensation charges, non-GAAP operating margin was 25%, compared to 20% in Q3 2018 and in the previous quarter.

Income tax expense for Q3 2019 was RMB365 million (US$51 million), compared to RMB257 million in the same period of 2018 and RMB336 million in the previous quarter. The change in its effective tax rate was primarily due to changes in the profitability of Trip.com subsidiaries that have different tax rates, including certain non-deductible expenses of the fair value changes in equity securities investments.

Net income attributable to Trip.com Group’s shareholders for Q3 2019 was RMB793 million (US$112 million), compared to net loss attributable to Trip.com Group’s shareholders of RMB1.1 billion in Q3 2018 and RMB403 million in the previous quarter.

Excluding share-based compensation charges and fair value changes of equity securities investments, non-GAAP net income attributable to Trip.com Group’s shareholders was RMB2.3 billion (US$317 million), compared to RMB1.7 billion in Q3 2018 and RMB1.3 billion in the previous quarter.

Diluted earnings per ADS were RMB1.35(US$0.19) for Q3 2019 . Excluding share-based compensation charges and fair value changes of equity securities investments, non-GAAP diluted earnings per ADS were RMB3.70(US$0.52) for Q3 2019 .

As of September 30, 2019, the balance of cash and cash equivalents, restricted cash, short-term investment, held to maturity time deposit and financial products was RMB61.0 billion (US$8.5 billion).

For the fourth quarter of 2019, Trip.com expects the net revenue growth to continue at a year-over-year rate of approximately 8%-13%.

China outbound tourism insights 2019

Close to one third (29%) of China outbound travelers are post-80s; They spent an average of 5,566 yuan on travel booking. Online travel websites and mobile apps are the top sources of China’s outbound tourists to obtain travel information in 2019. China’s outbound travelers spent most on shopping (37%) and transport & accommodation (32%).

The number of international flight routes in China grew to 849 in 2018 from 381 in 2012. China saw passenger traffic on international routes growing at about 15% in 2018 to 63.7 million person-trips.

Related Dossier: China Outbound Tourism

China’s outbound tourism OTA market is expected to reach 91.5 billion yuan in 2019 and 110 billion yuan in 2020.

Close to one third (29%) of China outbound travelers are post-80s, those born during 1980 and 1989. They spent an average of 5,566 yuan on travel booking in 2018.

More outbound Chinese travelers went on free-and-easy (self-guided) tours, growing from 37.2% in 2015 to 42.5% in 2018.

Southeast Asia is the top outbound destinations (54.8%) among Chinese travelers in 2019, followed by East Asia (46.9%), and Hong Kong/Macau/Taiwan region (42.6%). Europe is also a population destination (27.9%).

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Characteristics of China outbound travelers in 4 segments

Alipay has just introduced a version of its popular app designed specifically for international travelers to enjoy the ease of paying with their smartphones while visiting mainland China. And, no local mobile number or bank account is required.

Alipay, together with its local e-wallet partners in Asia, already serves more than 1.2 billion users with its widely adopted QR code payment services.

In China, users can also access services such as paying for taxis, hotel room bookings, and movie tickets, directly within the app. However, because access typically requires a local phone number and Chinese bank account, short-term international visitors previously could not use mobile payments in China.

How can foreigners now get an Alipay account?

To begin using the International Version of Alipay, visitors can download Alipay for iOS or Android and register with an overseas mobile phone number to access the “Tour Pass” mini program. Users need to submit proof of a valid Chinese tourist visa and passport.

So how do you top up your Alipay account?

Visitors in China can use their international debit or credit cards to load funds onto a prepaid card provided by the Bank of Shanghai within the “Tour Pass” mini program.

What about the remaining fund when you leave the country?

The minimum top-up for each card is RMB 100, with balance capped at RMB 2,000 ($285). The card is valid for 90 days, after which any remaining funds will be refunded automatically.

What can you use Alipay to pay for?

International travelers will be able to pay for shopping, dining, movie and attraction tickets, taxis and more when traveling in China.

According to a week-long informal poll conducted by Alipay on Twitter, about 220 out of 1240 respondents (18%) felt that the biggest annoyance when visiting China was not being able to pay with their mobile phones as the locals do.

More visitors are arriving in China every year as the country eases visa requirements to boost tourism.

In 2018, China received 30.5 million international visitors from overseas, an increase of 4.7 percent from the year before, according to government data. These tourists are also spending more, with expenditure on hotels, shopping, and food rising 5.1% to a total of US$73.1 billion last year.

China’s post-90s start personal finance management 10 years earlier than their parents

As Alipay accelerates its footprint across the globe, Chinese consumers’ overseas spending through the app continues to increase during China’s National Day Golden Week period, compared to the same period last year. Global in-store transaction volume this year grew by 10% YoY. The average total spends per user increased by 15% to about RMB 2,500 (about US$350).

China’s domestic attractions saw about 782 million visits during the National Day holiday, up 7.8% year-on-year, according to the Ministry of Culture and Tourism. Tourists’ spending during the holiday reached nearly 650 billion yuan ($91 billion), an increase of 8.47% from the previous year.

Top 10 Golden Week destinations by Alipay transaction volume

Japan topped the list of top 10 Golden Week destinations by Alipay transaction volume for the first time, with Thailand ranked #2. Cambodia and the Philippines joined the top 10 list for the first time, with large numbers of merchants now accepting Alipay in these two destinations.

Emerging destinations in Chinese Golden Week 2019

Emerging destinations saw some of the fastest growth in Alipay use compared to the previous year, the Philippines experienced 26 times the volume of transactions this year than in 2018, thanks to the mass rollout of Alipay to local merchants over the last 12 months.

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During Chinese National Day holiday, a.k.a. Golden Week in China, cultural and tourism consumption is more popular this year than in previous years. According to the data from Alibaba’s OTA Fliggy, the number of people who have booked domestic tours on National Day Fliggy increased by 42% year-on-year, and the growth rate exceeded the outbound travel.

China’s National Day holidays are public holidays and last one week from 1 Oct to 7 Oct.

With the National Day holiday approaching, the searching volume of OTA Tuniu’s National Day holiday travel products is soaring while the sales of the outbound and domestic tour products are rocketing, accounting for 57% and 31% of total bookings respectively.

Some travelers have made reservations for outbound tours four months in advance.

Compared with the period before the holiday, the prices of tour products during the National Day holiday have all increased.

Among them, domestic tour products rise by an average of about 35% and quick getaway tour products rose by 10%-15%; the prices of outbound short-distance tour products generally increase by about 30% while the price increase for outbound long-distance tour products is slightly lower than that of short-term tour products, at about 10%.

Different from previous years, the trend of off-peak travel around the National Day holidays this year is not obvious. One reason is that the previous holiday “Mid-Autumn Festival” is 12 days apart, making it difficult to utilize by the travelers were used to taking advantage.

In 2018, there were only 6 working days between the 2018 Mid-Autumn Festival holiday and the National Day holiday, which can adjust and piece together the longest holiday in the history of “Mid-Autumn Festival + National Day” – 16 days. However, the 12 working days between the two festivals this year made people give up adjustment or switch to adjust the latter part of the holiday.

On the other hand, with the increasing awareness of traveling in off-peak periods, the line between high seasons and off-seasons is blurring. It is expected that the number of people traveling during the National Day holiday will increase sharply from about September 30 and reach the peak on October 1.

Tuniu’s data for tourism products reservation during the National Day holiday shows that long-distance and in-depth tour products are the most popular ones. Over 40% of users will travel for 5-6 days while nearly 20% have selected itineraries of 7 days or longer.

Diverse travel modes such as group tour, free & easy tours, partially guided tour, customized tour, self-driving tour, local fun tour, car rental, and others will be favored by a large number of tourists during the National Day holiday.

Login or subscribe to read the full National Day Tourism insights including top travelers origins, top destinations, popular outbound activities and destinations, and trending tourism themes in China. 

Alipay shared a study on the spending habits of Chinese visitors on the payment app over the Labour Day holiday (1–3 May) this year. The number of Chinese visitors in Singapore over the Labour Day holiday period almost doubled from last year.

In addition, the average Chinese traveler spent SGD 325 (RMB 1,611) in Singapore during the Labour Day holiday – higher than in any of the other SEA countries, and a 13% increase from the same period last year according to Alipay.

Key Singapore-specific findings reveal:

• Grocery and fresh food supermarkets, followed by department stores and fashion brands saw the highest growth among Chinese visitors during this period
• The most popular merchants in Singapore were taxis (in-street and via taxi-hailing apps), airport merchants and resort merchants

General findings from the study reveal:

• Average overseas spending per user on Alipay increased by nearly 11% to RMB 1,790 (SGD 361)
• Spending was highest in Europe, the Middle East and North Asia
• In terms of the number of transactions, Thailand was the second-most popular destination for Chinese tourists
• Malaysia and Singapore ranked seventh and ninth in terms of the number of transactions

Demographic findings

Chinese seniors are an up-and-coming tourism trend – transactions made by those born in the 1940s and 50s more than doubled, with average spending per user in this age group jumping to RMB 1,622 (SGD 327).

About 65% who used Alipay overseas during the Labour Day holiday were female. Transactions made by those born in the 2000s increased eight-fold, on average to RMB 506 (SGD 102) during the same period.

In Southeast Asia, tens of thousands of merchants already accept Alipay as a payment platform for Chinese tourists. An earlier joint study from research firm, Nielsen and Alipay found that more than 90% of Chinese tourists would use mobile payment to pay overseas if given the opportunity.

Alipay has been working with various government bodies, financial institutions and businesses in Southeast Asian countries to further enhance guest experiences and enable seamless access to tourism attractions for Chinese visitors.

Simply pigeonholing people into presumed lifestyle and pursuits by their age and geography can no longer work the same as in the past few years. Quite remarkable changes have taken places in the preference, behavior, and consumption habits of Chinese travelers.

Of the 1,000 respondents surveyed by Hilton and Nielsen who spent in the past year at at least one high-end hotel:

• 83% prefer exploring local customs
• 82% are willing to treat themselves to pay for the premium experience
• 77% hope to have a deep understanding of local culture and get to know people there
• 77% are in pursuit of unique experiences.

Apart from that, they expect hotels to be cultural, comfortable, social, and unique.

Some deem this as a miniature of their lifestyle and attitudes to life. It also influences what they want during traveling. Above all, everything during the trip should be comfortable. And then they turn attention to cultural, explosive, and unique requirements.

As regards their attitudes to consumption, 67% of respondents thought it is vital to enjoying the moment without worrying about the future. Among them, 54% are looking for hotels that can provide something exciting.

69% of respondents said that they are willing to be seen and known of what they like. Among them, 50% prefer a hotel decorated with local styles; 48% are more likely to be attracted by hotels distinctive in design and fashionable in style.

63% of respondents thought travel give them a chance to withdraw themselves from routines and enjoy the pure happiness in daily life. 50% care about how hotels can fulfill their lifestyle requirements.

China saw 5. 68 billion person-trips in 2018, 5.539 million of which were domestic tips and 141.2 million were inbound trips.

Rising outbound travelers from lower-tier cities in China

Singapore emerged the 3rd largest market in Southeast Asia for Chinese tourists spending over Chinese New Year, with an increase of 34% in average spending per Chinese tourist, according to findings from Alipay on overseas spending and mobile payment behavior of Chinese consumers across the 54 markets where Alipay is accepted during the 2019 Lunar New Year period (4-10 February).

60% of merchants that had adopted Alipay reported growth in revenue and foot traffic. It also highlights how the use of Alipay has become mainstream, as the older generations catch up with their younger peers in embracing digital payment.

The key findings reveal:

• Both transaction values and volumes experienced robust growth.
• Offline in-store transaction value surged 2.2 times year-on-year.
• Asian countries still dominate the top in terms of transaction volume with the exception of Canada, which climbed to the tenth spot due to increased adoption by local merchants and large retailers.
• Singapore remains in third place in Southeast Asia terms of transaction volume after Thailand and Malaysia and ranks in eighth place globally.
  • Transaction volume in Singapore doubled, and the average spending per Chinese tourist in Singapore increased by 34 percent
  • The highest number of transactions in Singapore occurred at airport terminals and in taxis.
  • Taxi transaction volume in Singapore this year was 1.92 times more than last year, and there was an increase of 5% in spending.
  • Transaction volume on Sentosa tripled, with over 70% acceptance rate on the island.

Alipay and Singapore’s Resorts World Sentosa (RWS) have deepened their strategic partnership to enhance the travel experience of Chinese visitors

In terms of product and outlet categories, Chinese tourists shopped more frequently in department stores and luxury shops in Europe, while those who traveled to Asian countries favored pharmaceutical and cosmetics shops and convenience stores.

In addition, preliminary findings released last week show:

Average consumption growth through Alipay by travelers from third-and-fourth-tier cities in China outpaced those travelers from the top-tier cities, such as Beijing, Shanghai and Guangzhou. Middle-aged travelers, which are categorized into two groups – post-60s (those who were born between 1960 – 1969) and post-70s, were the main driving force in outbound tourism and overseas consumption.

China saw 150 million outbound person-trips in 2018, up 14.7%

Alipay and Resorts World Sentosa (RWS) have deepened their strategic partnership to enhance the travel experience of Chinese visitors with the launch of a new RWS mini-programme available on the Alipay mobile application platform – the first of its kind in Singapore. RWS is also the first integrated resort outside of China to offer a mini-programme through Alipay.

A new technology trend and marketing model originating from China, the newly introduced RWS mini programme in partnership with Alipay allows Alipay users to make dining reservations, enjoy dining discounts and directly purchase discounted tickets to attractions such as Universal Studios Singapore, S.E.A. Aquarium, The Maritime Experiential Museum, and Adventure Cove Waterpark, all located at the lifestyle destination resort.

It enables RWS to reach out and market to users currently on the Alipay mobile app platform. As of the end of 2018, Alipay, together with its global e-wallet partners has served over 1 billion users worldwide.

The RWS mini-programme is developed with the aim of elevating the in-destination user experience for Chinese tourists visiting RWS. Through the mini-programme, visitors can now directly book discounted tickets to the many attractions at RWS with the convenience of a single app platform.

Besides seasonal promotions, discounts and prizes up for grabs, visitors can also easily make online dining reservations and enjoy special discounts across the many celebrity chef restaurants at RWS via the app, a feature not easily accessible to users in China.

The in-app map also provides a quick overview to help visitors explore the integrated resort. Regular updates about exclusive RWS and Alipay campaigns are also provided with seasonal promotions rolled out to ensure visitors get the most value out of their visit.

Its Chinese New Year campaign launched on 25 January 2019, giving users up to RMB 720 worth of red packets and RWS coupons. Reservations at the newly opened contemporary European restaurant – table65 – at RWS can also be conveniently made on the mini-programme.

RWS is currently offering users an exclusive dining promotion that offers discount vouchers of SGD 25 when they make an online reservation at three exciting celebrity chef restaurants – Curate, Teppan, and Tangerine – with a minimum spend of SGD 100.

New features will be gradually added to improve the visitor experience at RWS. All offers and features will be exclusive to the RWS mini-programme only and not accessible through Alipay’s platform or RWS website.

Users can access the mini-programme by either scanning the Alipay mini-programme QR code displayed at strategic locations across RWS, or do a keyword search for “rwsentosa”, or the corresponding Chinese terms “圣淘沙名胜世界”, “名胜世界” on the Alipay app.

Cherry Huang, General Manager, Cross-border Business for South and Southeast Asia, Alipay said, “

We are very pleased to partner with Resorts World Sentosa to further enhance the shopping, dining and entertainment experience for Chinese tourists at RWS. Many Chinese are already using Alipay to make payments at RWS but the mini-programme will take it one step further to help them make the most out of every visit, with discounts, offers, free reservations and seasonal campaigns.

Particularly at a time when the Chinese are traveling more, and willing to spend more during their vacations abroad, it is crucial that businesses in this region are accommodating their unique spending behaviours. According to the latest Nielsen report on outbound Chinese tourism and consumption trends, merchants in Southeast Asia, including Singapore, are benefiting the most from adoption of Alipay as a payment method. In fact, 60% of merchants here report increased foot traffic and increased revenue since making Alipay available.

Mr Chow Keng Hai, Senior Vice President for Resort Operations, Resorts World Sentosa said,

Chinese visitors form a very important source market for RWS where our highly popular attractions such as Universal Studios Singapore and S.E.A. Aquarium count among the top must-visit places on their travel itineraries, along with our many exciting restaurants helmed by renowned celebrity chefs.

With Alipay already widely accepted as a fast and convenient payment mode across RWS, this new partnership with Alipay takes us a step ahead to enhance the post-arrival experience for Chinese visitors at RWS.

We are confident that the mini-programme will greatly increase the appeal of RWS, offering our Chinese guests an all-in-one app to access the many attractive discounts and making it a breeze for them to book tickets and make dining reservations at the click of a button.”

Alipay started testing its own mini-program platform since January 2017. Read more on its benefits for retailers here.

In addition to online payments, Alipay is expanding to in-store offline payments both inside and outside of China. Alipay’s in-store payment service covers more than 40 countries and regions across the world, and tax reimbursement via Alipay is supported in 29 countries and regions.

Alipay works with over 250 overseas financial institutions and payment solution providers to enable cross-border payments for Chinese traveling overseas and overseas customers who purchase products from Chinese e-commerce sites. Alipay currently supports 27 currencies.

Related: WeChat Mini-Programs