The Zhitong Finance App learned that Guojin Securities released a research report saying that in May '24, the number of domestic tourists continued to achieve medium to high single-digit growth, recovering 128.2% compared to '19, reaching the highest legal holiday point since the beginning of '23. It is speculated that the decline in customer unit price recovery is related to more rational pricing strategies when the supply side rebounds, increasing the share of consumption in county destinations, and the continued popularization of tourism. It continues to be optimistic about the rational prosperity of mass tourism.

The recommendations focus on: 1) OTA platforms that continue to benefit from mass tourism penetration and release, such as Tongcheng Travel (00780) and Ctrip Group (09961); 2) performing arts companies with a low base in 23 years, continuous improvement in recovery, and deep barriers to medium- and long-term competition, focusing on Songcheng Performing Arts (300144.SZ); 3) Strong natural resource endowments, continuous improvement in passenger flow performance, and companies with short-term increases such as transportation improvements and investment in new projects; 4) It is recommended to focus on hotel companies with strong brands and product strength Huazhu Group (603199.SH 01179)

The main views of Guojin Securities are as follows:

Travel: In the first four days of May 1st, the average daily movement of people across regions of society increased by 27% compared to 2019, and continued to exceed expectations

According to data from the Ministry of Transport, the total number of people moving across regions during the first four days of the May Day holiday in 2024 (2024/5/1 to 2024/5/4) was 1.12 billion, an average of 280 million people per day, +4.2% compared to the same period in '23 (four days before May 1st, same after), +27.4% per day in the same period in '19, and increased month-on-month over the previous Qingming (+20.9%) and Spring Festival (+12.0%), reflecting a continuous increase in residents' willingness to travel. In terms of specific travel methods, railways/highways (commercial) /highways (non-commercial) /waterway/civil aviation were +1.9%/+4.1%/+6.2%/+10.8%/+7.0% in 23 years, respectively, compared with +17.6%/+45.0%/-26.5%/-27.5%/+8.4% per day in '19.

Domestic travel: The number of travelers is growing at a high base, the county market is hot, and the recovery of performing arts in Songcheng is increasing

According to Ministry of Culture and Tourism data center estimates, 295 million domestic tourist trips were made during the five-day May Day holiday in '24, up 7.6% year on year, recovering to 128.2% in the same period according to a comparable scale; the total travel expenses of domestic tourists were 166.89 billion yuan, up 12.7% year on year, and recovered to 113.5% in the same period in '19 according to a comparable caliber; the implied customer unit price was 566 yuan, or 88.5% of the same period in '19.

Domestic travel highlights: 1) Tourism in the county market is hot, and the “exit label” is driving a high increase in the cultural tourism industry in places such as Tianshui, Quanzhou, and Liuzhou; 2) Positive year-on-year growth in some famous mountains and Sichuan scenic spots, such as Jiuhua Mountain, Huangshan, Jiuzhaigou, etc.; 3) Performance leader Song Cheng's data improved month-on-month compared to Qingming, and 4% of its shareable asset projects during the May 1st Festival (Hangzhou+Sanya+Lijiang+Guilin) recovered 105% from 2019, compared with Qingming () and New Year's Day (10)) have all been improved.

Outbound travel: The average number of people entering and leaving on the 5th day increased 35% compared to the same period in 23

According to the State Administration of Immigration, border inspection agencies across the country guaranteed a total of 8.466 million Chinese and foreign personnel entering and leaving the country, an increase of 35.1% over the previous year. It is estimated that it will return to 80% of the average level on May 5, 2019. As of 2024/5/3, the volume of international passenger flights in China recovered to 73% of the same period in 2019, a slight increase from the end of March. Combined with the recent decline in foreign exchange rates such as yen, it is expected that outbound travel will continue to pick up.

Hotels: Supply is picking up+extreme weather effects. The May Day price side is expected to decline year-on-year

According to Hotel Home data, in the 17th week of 2024 (4/22 to 4/28) before the holiday season, the national hotel revPAR was -17.4% (previous value -11.3%), and the RevPAR growth rate declined from the previous week. It is speculated that some key cities may be affected by torrential rain and extreme weather. According to data on where to go, the average payment price for May Day hotels in 2024 was the same as in 2023, and the prices of the two-, Samsung, and four-star hotels with the highest increase in bookings declined. Among them, Samsung hotels fell 9% and two-star hotels dropped 7%.

Catering: Representative chain brands are growing by single digits at the same May 1st store, and the performance of low-tier cities is better than that of higher-tier cities

According to Jiu Qian data, the average sales and customer traffic of Haidilao stores in the first four days of the 2024 May Day Festival were +1.9% and +2.3%, respectively, with an average daily turnover rate of 6.0 times/+2.6%. Under a higher base, the customer unit price is expected to drop slightly year-on-year in the face of improved cost performance.

Risk warning

The short-term recovery in consumer desire falls short of expectations, uncertainty about outbound travel policies, labor shortages, and sharp rise in raw material prices.