ChinaTravelNews, Ritesh Gupta – Tongcheng Travel Holdings Limited's has shared that the company's core OTA operating profit was RMB 858.4 million with a margin of 24.3%.
This business posted a revenue of RMB 3.5 billion, out of a total revenue of RMB 4.2 billion in the second quarter (Q2) of this year.
Within the core OTA segment, Tongcheng's accommodation reservation services revenue rose by 12.8%. In this section, the company benefitted from cross-selling strategies, too. The total room nights sold went up by 10%, as compared to the same quarter last year, with international business witnessing around 140% growth, according to the company.
And its transportation ticketing services revenue went up by 16.6%. The air ticketing volume witnessed 20% growth, with international ticketing going up by 160% in the April-June period of this year. The other sources of revenue generation in this category contributed 87.3% growth, going up to RMB 592 million. These include advertising, hotel management, ancillary value-added services and membership offerings.
The online travel company shared that the remainder of its revenue, RMB 719.4 million, in this quarter was contributed by the tourism business, and it managed to breakeven with an operating profit of .7 million. This category includes revenue from offline travel agency related services plus the operation of a scenic park. It must be noted that no such revenue was there last year.
As for the January-June period, revenue increased by 48.8% year-to-year to RMB8,111.6 million from RMB5,452.4 million in the same period of last year.
It was also shared that the total GMV rose by 4.4% and 9.7% year-to-year to RMB62.3 billion and RMB128.2 billion for the three and six months of this year.
Effective acquisition strategy
Highlighting its marketing expertise, the company shared that its 12-month accumulated number of travellers served went up by nearly 30% to 1.86 billion.
This underlined a significant improvement in user purchase frequency.
Till the end of June this year, the company's registered users residing in non-first tier cities in China accounted for over 87% of the total registered users. For the year ended December 31, 2023, around 73% of its new paying users on Weixin platform were from non-first-tier cities in China.
Reliance on Weixin ecosystem
Also, Tongcheng continues to explore and benefit from the Weixin ecosystem has to offer. During Q2 of this year, around 70% of its new paying users on the Weixin platform were from non-first tier cities in China. A major and steady source of traffic comes from the Weixin mini-program. The marketing team continues to strengthen its ties with Tencent, working with Tencent Games and introduce e-Sports activities to promote its brand to the younger audience.
Weixin users can access the company's Weixin-based mini programs through the “Rail & Flight” and “Hotel” portals in Weixin Wallet, the mobile payment interface of Tencent’s Weixin or from the drop-down list of the favorite or most frequently used mini programs in Weixin. The Tencent Group procures mobile payment services for purchases made by Tongcheng's users through these Tencent-based platforms, in particular, the mobile payment interfaces of Weixin and Mobile QQ. The focus also remains on optimising entry point interfaces on QQ Browser and Weixin Search platform to sustain user engagement.
Around 80% of Tongcheng's average MAUs were contributed by the Weixin mini-program last year.
As for other avenues, the team has been looking at mini-program on Alipay and offline options like public transit initiative to rely on huge traffic volume of metro and intra-city buses to step up its user acquisition strategy.
