Anxin International released a research report saying that the release of demand for family parent-child trips and long-term tours during the May 1st holiday is expected to increase the average cost of users. At the same time, consumers' preferences for cost performance and special travel will affect the repurchase of company/regional travel orders. It is recommended to pay attention to air ticket & hotel reservation volume and price trends. The bank is optimistic about the steady growth prospects of the travel market and the advantages of OTA platforms in expanding the user base and increasing the frequency of user bookings. It is optimistic about the supply chain advantages and user mentality of Ctrip Group-S (09961/TCOM.US), the growth of Tongcheng Travel (00780) user spending and the incremental contribution of the travel agency business.
Anxin International's main views are as follows:
OTA May Day holiday reservation data:
According to comprehensive reservation data from various platforms, domestic travel is characterized by long-distance travel, cultural tourism in the county area, and tours around concerts; the implementation of the visa-free policy and the appeal of outbound air tickets may speed up the resumption of outbound travel, and Japan, South Korea, and Southeast Asia are still popular.
Specifically, 1) Ctrip: Domestic long-distance travel demand was released (long-distance orders accounted for 56%), and travel destinations in fourth-tier cities and counties increased significantly (hotel reservations/scenic spot ticket orders increased 68%/151% year over year); in terms of outbound travel, Japan, South Korea and Southeast Asia were popular destinations, and inbound travel orders increased 130% year on year; post-00 orders increased 20% year on year, accounting for 31% year on year. 2) Tongcheng travel: Medium- and long-term travel and outbound travel orders are showing a high growth trend. Southeast Asia is still a popular destination, in line with the general market trend in the industry; concerts, music festivals, and film and TV drama filming locations drive travel consumption in related destinations.
Domestic tourism revenue and number of visitors are expected to recover during the May 1st holiday:
According to data from the Ministry of Culture and Tourism, domestic tourism revenue for New Year's Day/Spring Festival/Qingming in 2024 recovered to 106%/108%/113% of the same period in 2019, the number of tourists recovered to 109%/119%/112% in the same period in 2019, and the corresponding per capita expenditure recovered to 97%/103%/106% in the same period in 2019. The Ministry of Culture and Tourism predicts domestic tourism revenue of 6 trillion yuan/6 billion people in 2024, corresponding to a year-on-year growth rate of 22%/23%, returning to 105%/100% in 2019. Considering the release of demand for long-distance travel during the long holidays and the continuing cultural tourism boom in various regions, the bank expects that the May Day holiday recovery will be higher than New Year's Day and Spring Festival. The corresponding tourism revenue is expected to reach 150-170 billion yuan, and the number of tourists is expected to reach 28—30 million.
Outbound travel may be growing at a higher rate, benefiting from the visa-free policy and attractive ticket prices:
According to flight manager data, in the first two weeks of April 2024 (2024/4/1-2024/4/14), in terms of destinations, the top 3 international flight volumes were Japan, South Korea, and Thailand. The average weekly outbound flight volume recovered to 72%, 80%, and 65% in the same period in 2029. Looking at the 2023 May Day holiday data, the top 3 international flight volume is Thailand, South Korea, and Japan, recovering 41%, 45%, and 26% from the same period in 2019. The degree of recovery since April has increased significantly compared to the May Day holiday last year. The bank expects the upward trend to continue, benefiting from the continued increase in willingness to travel, the implementation of visa-free policies, visa optimization, and the decline in outbound ticket prices (Figure 7), and the attractiveness of outbound travel has increased.
Furthermore, the bank observed that the number of flights to some European countries in March exceeded the 2019 level. For example, the number of flights in Italy, Spain, and the United Kingdom was 159%, 122%, and 111% in the same period in 2019, which is better than Europe as a whole (about 80%). Although Southeast Asia and East Asia are still the main destinations for outbound travel, the degree of recovery in long-term European and American travel is likely to improve considerably.