On February 22, Beijing time, the online travel platform Ctrip released its unaudited financial reports for the fourth quarter and full year of 2023.
In the fourth quarter of 2023, Ctrip's net operating revenue was RMB 10.3 billion, a year-on-year increase of 105% and a month on month decrease of 25%; The net operating revenue of Ctrip for the whole year of 2023 was 44.5 billion yuan, a year-on-year increase of 122%.
After the financial report was released, Ctrip's stock price continued to rise. As of the time of publication, Ctrip's Hong Kong stock price has risen by over 7%.
In the fourth quarter of 2023, Ctrip's net profit was 1.3 billion yuan, a year-on-year decrease. For the entire year of 2023, Ctrip's net profit was 10 billion yuan, a significant increase from the previous fiscal year's net profit of 1.4 billion yuan, and far exceeded the revenue growth rate.
In addition, from the first quarter to the third quarter of 2023, Ctrip's revenue was 9.211 billion yuan, 20.473 billion yuan, and 34.224 billion yuan, respectively; The net profits were 3.374 billion yuan, 648 million yuan, and 4.638 billion yuan, respectively. Compared with 2019, Ctrip's revenue increased by 25%, net profit increased by 41%, and gross profit margin increased by 2.4 percentage points in 2023.
The main reason for Ctrip's significant increase in profits in 2023 is that while revenue and gross profit have doubled, the increase in operating expenses has been relatively low.
Among them, in the fourth quarter and full year of 2023, Ctrip's product research and development expenses were 2.9 billion yuan and 12.1 billion yuan, respectively, a year-on-year increase of 39% and 45%. In 2023, product research and development expenses accounted for approximately 27% of net operating income, while in 2022, this cost accounted for a high proportion of 41.6% of revenue.
Meanwhile, in the fourth quarter and full year of 2023, Ctrip's general and administrative expenses were 870 million yuan and 3.74 billion yuan, respectively, with a year-on-year increase of only 6.5% and 31.5%. And in the fourth quarter, Ctrip's general and administrative expenses also decreased by 15% compared to the previous quarter. The financial report explained that this was mainly due to the decrease in general and administrative personnel related expenses.
This means that in 2023, while other technology companies are reducing costs and increasing efficiency, Ctrip has also gained more revenue and profits with less increase in research and development and labor costs, improving operational efficiency.
This is mainly due to the sustained recovery of the tourism industry as a whole. According to the financial report, due to strong tourism demand, the company's business has significantly recovered in the past year, with a significant increase in annual travel orders. Last year was indeed a year of comprehensive recovery in the tourism industry. According to relevant data from the Ministry of Culture and Tourism, the number of domestic tourists in 2023 reached 4.891 billion, a year-on-year increase of 93.3%; In the fourth quarter, the number of domestic tourists reached 1.217 billion, a year-on-year increase of 179.1%. In addition, the total cost of domestic tourists traveling in 2023 was 4.91 trillion yuan, a year-on-year increase of 140.3%.
From the perspective of business structure, according to financial report data, accommodation booking and transportation ticketing services are still the basic businesses of Ctrip.
In the fourth quarter of 2023, Ctrip's revenue from accommodation bookings was 3.9 billion yuan, a year-on-year increase of 131%; The revenue from transportation ticketing was 4.1 billion yuan, a year-on-year increase of 86%.
In 2023, Ctrip achieved revenue of 17.3 billion yuan and 18.4 billion yuan in accommodation booking and transportation ticketing, respectively, a year-on-year increase of 131% and 123%, accounting for 39% and 41% of the total revenue, with little change compared to 2022.
In addition, benefiting from the recovery of inbound and outbound tourism, Ctrip's international business has achieved rapid growth. In the fourth quarter of 2023, Ctrip's outbound hotel and flight bookings recovered to over 80% of the same period in 2019. In comparison, the international aviation industry's passenger volume recovered to 60% of 2019. In addition, the company's global OTA platform's total bookings increased by over 70% year-on-year.
Overall, Ctrip's revenue and net profit have maintained a growth trend in 2023 and have shown increasingly strong profitability.
For Ctrip, the larger competitor is still Meituan. According to financial report data, in the first two quarters of 2023, Meituan's local business in store and liquor and tourism business actively recovered, with a year-on-year increase of over 120% in transaction volume in the second quarter; But in the third quarter, the operating profit of the in store, hotel, and tourism businesses decreased year-on-year, partially offsetting the steady growth brought about by the profit of food and beverage delivery.
Other OTA platforms have also presented impressive financial data in the context of tourism recovery. During the Spring Festival, travel tickets, train tickets, and hotel bookings for the same trip all increased by more than 30% year-on-year, and the net profit in the second and third quarters of 2023 increased by more than 24 and 11 times year-on-year, respectively, reaching HKD 1.244 billion in the third quarter.
Ctrip CEO Sun Jie said, "The global tourism industry has shown excellent resilience and is expected to maintain growth momentum. To take advantage of this trend and create new opportunities, we will continue to invest in technology and product innovation, improve customer service, and promote sustainable development of the tourism industry."
According to the financial report, both overall and specific businesses, Ctrip's explanation for the month on month decline in revenue is due to seasonal factors.
From the perspective of market trends, the "AI fever" in the technology industry in 2023 has also extended to OTA platforms. According to data from iResearch Consulting, intelligent recommendations on OTA platforms are playing a positive guiding role in 2023. Among the reference factors for users to book products, personalized recommendations account for 45.3%, and users have expectations for AI intelligent recommendations or customization on the platform, which has also reached 51.8%. Users most expect AI tools to play a role in destination strategy recommendations.
"We will continue to pay attention to globalization and artificial intelligence innovation, and have confidence in building upon our success in 2023 and further exploring future opportunities," said Liang Jianzhang, co-founder and chairman of the board of directors of Ctrip Group