ChinaTravelNews, Ritesh Gupta – Meituan’s hotel and travel business experienced robust growth in 2024, driven by its established presence in lower-tier markets and low-star hotels. The tech-driven retail company also made progress in the high-star hotel segment as it strategically expanded its partnerships with hotel brands, such as Marriott and InterContinental Group.
In its Q4 earnings call, the senior management at Meituan emphasised that the team continues to leverage its early entry into lower-tier markets.
Meituan indicated that on one hand it observed strong consumer demand for hotel and travel, with notable trends including: increased interest in niche travel destinations, preference for valuable, budget-friendly travel choices and growing demand for local accommodations. On the other, the company strengthened collaborations with industry partners, enhancing the diversity and price competitiveness of its offerings.
Membership initiative
Meituan strategically utilised its Shen Hui Yuan membership program to drive targeted user traffic to hotel merchants, particularly in the low-star hotel segment. The company deepened collaborations with high-star hotel brands like Marriott and Intercontinental through joint membership and marketing programs.
Over the past 12 months or so, Meituan tailored its approach to hotel categories, focusing on traffic, renovations, and supply for low-star hotels, while driving new guest acquisition for high-star hotels through curated lists and exclusive partnerships.
Meituan’s Shen Hui Yuan membership program experienced immense growth since its introduction in the second quarter of last year. Initially piloted in select cities, the program expanded to include in-store, hotel, and travel categories before its nationwide rollout in July. The integrated membership program deepened collaborations with numerous merchants, providing members access to diverse and valuable offerings. Early assessments in pilot cities indicated that Shen Hui Yuan successfully strengthened consumer perception of Meituan’s value-for-money deals and significantly increased merchant participation.
In the previous quarter's results, Meituan's CFO, Shaohui Chen, reported that over 50% of hotel and travel merchants were participating in the Shen Hui Yuan program, with a growing number of orders placed through it. He stated that the integrated marketing team successfully increased consumer awareness of the program's value and benefits. Furthermore, he outlined the company's goal to transition over 100 million Shen Hui Yuan delivery users to hotel and travel services.
Cross-selling
Meituan’s CEO Wang Xing stated that one of the highlights in this category was leveraging the platform’s integrated capabilities to drive cross-sales.
The company refined its `Hotel + X’ packaged deals, combining hotel bookings with transportation, dining, and entertainment, to provide comprehensive travel offerings.
The enhanced Shen Hui Yuan membership program effectively directed high-quality food delivery traffic to in-store merchants, boosting their transaction volumes. The in-store business witnessed substantial growth, with order volume surging by over 65%, driven by integrated marketing tools like Special Deals and live-streaming. Meituan's focus on lower-tier markets, streamlined merchant on-boarding, and tailored group-buy deals further fuelled this expansion, according to Xing.
Comprehensive ecosystem
The company asserted that Meituan has strengthened its 'value-for-money' brand perception among consumers.
Meituan underlined that its strategic integration of its various services, from food delivery to in-store retail and on-demand medicine delivery, creates a comprehensive ecosystem that encourages users to engage with multiple Meituan services, increasing both order frequency and overall user value.
The company leverages its food delivery dominance to drive synergy across its diverse businesses, aiming to maximise user engagement and order value.
In 2024, the on-demand delivery business, anchored by food delivery, experienced steady growth, solidifying its position as a retail and catering industry driver. Meituan reinforced its "value-for-money" image, enhancing its ecosystem through supply chain innovation and operational refinement.
Initiatives like Pin Hao Fan and Branded Satellite Stores catered to price-sensitive consumers, while Meituan InstaMart expanded retail partnerships, especially in lower-tier markets, establishing on-demand retail as a lifestyle.
Financial results
Meituan’s revenue increased by 22% to RMB337.6 billion in 2024.
Revenue for the Core local commerce segment increased by 20.9% year-over-year to RMB250.2 billion. Increased transaction volume drove revenue growth in delivery services and commissions.
Operating profit increased by 35.4% year over year to RMB52.4 billion, and operating margin improved to 20.9%, up from 18.7% in 2023.
