Specialist
Former General Manager at Zhejiang Fliggy Network Technology Co Ltd
Agenda
- China’s OTA hotel business in Q1 2020 – GMV, order volume, order cancellation rate and loss estimate, plus forecast for Q2 and Q3 2020
- Cooperation between OTAs and hotels – opening and closing of hotels, cooperation models and future strategies
- Novel coronavirus outbreak’s potential impact on OTAs’ transportation booking and holiday tourism business
Questions
1.
Can you first comment on the main domestic OTA platforms, including Trip.com, Meituan Dianping, Fliggy and Tongcheng-Elong, in terms of the core development strategies and focuses in the first three quarters of 2019? Which aspects did they perform well and which aspects did not perform as well as you expected?
2.
The revenue of Trip.com’s hotel booking was RMB 4.1bn in Q3 2019, up by 14% YoY and 21% QoQ in Q3 2019. The transaction amount of Meituan Dianping’s in-store and hotel business was RMB 63.9bn, an increase of 29.4% YoY, and its revenue was RMB 6.2bn, an increase of 39.3% YoY in Q3 2019. Its quarterly volume of room nights increased by 44.4% YoY to 110 million, exceeding 100 million for the first time. Is Q4 the off season or peak season for OTA platforms’ hotel business? What are the YoY and QoQ growth trends of key players in terms of the transaction amount and room nights?
3.
Do you think this growth rate sped up or slowed down compared with the past few years? From the supply side and the demand side, what are the growth drivers for Q4 and the future?
4.
Why do you think Trip.com can keep its market share in high-end hotel sector? Even if Meituan Dianping and Fliggy have established teams, it is not easy to shake its position. Why? Will Trip.com gradually lose this market in the next 2-3 years?
5.
Could you tell us about Trip.com’s strategies to compete with Meituan Dianping in the low-end hotel sector? Does Trip.com have countermeasures against some marketing strategies of Meituan Dianping? How did Trip.com’s commission for hotels change in 2019? Do you think Trip.com can increase the room night volume of low-end hotels in Q4 2019 and 2020?
6.
What are the commission rates of different hotels in the OTA industry?
7.
When do you think the coronavirus outbreak start to impact OTAs’ accommodation business in Q1 2020? Could you estimate OTAs’ total loss in Q1 2020?
8.
Fliggy has a different business model and a profit model from traditional OTAs such as Trip.com and Meituan Dianping. Could you analyse their revenue sources and cost structure? What about the extra cost and the change of their gross profit rates and net profit rates in Q1 2020 with the order volume decreasing sharply?
9.
The government introduced a policy to forbid OTAs from charging cancellation fees. You mentioned that OTAs are helping suppliers with free cancellation. How would this affect the platforms and suppliers? Do the platforms offer some disbursements for the customers and hotels?
10.
How will the coronavirus influence OTAs’ cash flows and how will they be reflected on the OTAs’ financial reports?
11.
How will OTAs, hotels on their direct-purchase supply chain and agents make countermeasures against the impacts of the coronavirus outbreak? Which player has better measure implementation and decision than others?
12.
What are the proportions of hotels acquired by the direct-purchase team and agents for major OTAs? Will you analyse it from the category of high-end, mid-range and low-end hotels?
13.
A low-end hotel may cooperate with both Meituan Dianping and Trip.com, what will be the traffic volumes the two may bring? What is hotels’ choice preference, or do OTAs have incentives to stimulate hotels to make exclusive choices?
14.
What do you think of the development of Meituan Dianping and Trip.com in the next 3-5 years? If with Fliggy and Tongcheng-Elong included, which player will perform better?
15.
In terms of standard business, such as product development and upgrading, what are the strategies and competitive edges of major OTAs, especially in business hotels and holiday hotels? Have they formed core competencies? Referring to the influencing period of the severe acute respiratory syndrome (SARS), we think that the novel coronavirus has more significant influences. Will there be a wave of rebounding consumption after the epidemic ends?
