The Zhitong Finance App learned that Guoxin Securities released a research report saying that since this year, holiday travel has maintained a good growth rate even after making up for demand. The gradual recovery in consumption and the continued tourism boom indicate to a certain extent the structural adjustment of residents' spending budgets. What is behind this is a deeper spiritual pursuit of satisfaction. As for the upcoming May Day holiday, although last year's base figure is not low, considering that current residents' willingness to travel is still high, and there are still structural highlights such as sinking and leaving the country. The overall performance is still worth looking forward to. Considering OTA as a travel beta, it is expected to directly benefit from the boom in tourism, combined with the market's reperception of competitive barriers among industry leaders and marginal changes in financial sentiment in Hong Kong stocks. Continue to focus on recommending Ctrip Group-S (09961) and Tongcheng Travel (00780).

The main views of Guoxin Securities are as follows:

May 1st Golden Week in 2023 welcomed the peak of domestic travel, and is expected to grow steadily in 2024 against the backdrop of a high base

Looking back at last year, the degree of recovery in domestic travel gradually increased from the beginning of the year. The number of domestic visitors and total revenue during the May 1st Golden Week recovered to 119%/101% of the same period in 2019, respectively, reaching the peak of recovery. Looking at this year, we are referring to air and rail passenger forecast data. Overall, it is expected that growth will continue to be steady, and consumers' will to travel is still good. Among them, flight managers expect the average daily passenger traffic volume of civil aviation during the May 1st Golden Week to increase by about 15.6% compared to 2019 and about 11.0% compared to 2023; the Yangtze River Delta Railway, Guangzhou Railway Group, and the Beijing Railway Administration all expect passenger traffic volume to increase by about 3% year-on-year during the May 1st holiday, with a steady increase of about 3% year-on-year.

Holiday ticket prices are expected to drop slightly year-on-year. This is expected to be the result of the airline's volume-price balance. Increased passenger occupancy rates are expected to benefit booking platforms

As of April 17, flight managers expect the average economy class fare (including oil) for the 2024 May Day holiday to increase 21.7% compared to 2019, but a 5.1% decrease compared to 2023. Considering that May 1st last year was the peak of recovery after the epidemic, we analyzed that this affected the psychological expectations of airlines and consumers to a certain extent. Both airline capacity and pricing were relatively positive.

Travel declined after the Spring Festival this year. It is expected that airlines will pay more attention to efficiency indicators in terms of capacity investment and pricing. For example, the average daily flight volume during the May 1st holiday according to flight management statistics increased by 3.3% year-on-year, which is lower than the expected increase in passenger traffic. Since OTA's current ticket sales commission rate is no longer a commission on the face price, but rather a relatively fixed service fee, Guoxin Securities believes that this more balanced storage model is beneficial to OTA, not only to the growth of the airline ticket business, but also to other cross-sales such as hotels.

Structurally, domestic tourism continues to penetrate strongly in sinking counties, and outbound recovery is expected to accelerate

Domestic county travel orders are expected to be better than the general market: According to the Ctrip platform, domestic long-distance travel orders accounted for 56% during the May 1st holiday, and tourism performance in niche cities was outstanding. According to the Ctrip platform, hotel reservation orders in the county market increased 68% year on year and ticket orders for scenic spots increased by 151% year on year during the May 1st holiday season. The growth rate was higher than the national market. According to Guoxin Securities's analysis, under the trend of consumers in some high-tier cities pursuing cost performance and increasing penetration rate among the tourist public, tourism consumption hotspots in low-tier cities have been rising one after another since last year. Local cultural tourism organizations have used local food and entertainment, cultural customs, and popular theme concepts to develop omnichannel marketing and build influencer destinations, attracting national traffic based on a continuously improved network of transportation facilities.

There are good conditions for improving outbound travel: According to the forecast of the State Administration of Immigration, the average number of people entering and leaving the country's ports per day during the May 1st holiday this year increased by 40.5% compared to the same period last year. According to Guoxin Securities's analysis, the recovery of international flight capacity (from recovery to 3-4 percent increase to 7-80% this year), the decline in ticket prices (the year-on-year drop in holiday international ticket prices ranged from 8-30% year-on-year), the favorable visa-free visa in many countries, and the holiday competition model of three vacations, all provided the foundation for an accelerated recovery in the number of outbound passengers.