Tongcheng Travel Sets New Milestones with 51.3% Revenue Growth in Q3 2024, Expanding Global Footprint with 2,100 Hotels in Operation and Over 1,200 More in the Pipeline : Here’s What You Need to Know!

Tongcheng Travel Holdings Limited, a leading integrated travel platform in China, has announced exceptional financial results for the third quarter of 2024. The company recorded significant growth, posting a 51.3% increase in revenue, a 51.6% rise in adjusted EBITDA, and a 46.6% jump in adjusted net profit, marking new milestones for the company. These results reflect the robust demand in both domestic and international travel, underscoring the strength of Tongcheng Travel’s market position and its continued expansion efforts.

Record Financial Performance in Q3 2024

Tongcheng Travel’s total revenue surged to RMB 4,991.5 million, driven by higher user engagement and growth across core business segments. The company reported an adjusted EBITDA of RMB 1,318.8 million, with an adjusted EBITDA margin of 26.4%, marking strong operational efficiency. Additionally, the adjusted net profit reached RMB 910.0 million, equivalent to an adjusted net margin of 18.2%. This performance highlights the company’s ability to scale efficiently while maintaining high profitability.

The Gross Merchandise Value (GMV), which is a key indicator of overall transaction volume, increased by 2.4%, totaling RMB 72.8 billion. These results reflect both an uptick in customer demand and an efficient operational model that has allowed the company to grow its customer base.

Growth in User Base and Increased Purchase Frequency

Tongcheng Travel also demonstrated strong user growth, with the number of annual paying users (APUs) rising by 3.4% to 232.4 million. The company continued to enhance user engagement, with the accumulated number of travelers served over the past 12 months reaching 1,882.5 million, marking a 19.9% increase year-on-year. This growth in user base is largely driven by improved user purchase frequency, thanks to the company’s strategic focus on product and service innovation.

Tongcheng Travel’s ability to engage users, particularly in lower-tier cities, has been a critical factor in its growth. As of September 2024, over 87% of its registered users hailed from non-first-tier cities in China. The company’s growing presence in these areas is key to capturing the broad market potential in China’s mass travel market.

Core OTA and International Business Surge

Tongcheng Travel’s core OTA (online travel agency) business was a major contributor to its Q3 success. Revenue from transportation ticketing services increased by 20.6% to RMB 2,026.8 million, with the company seeing substantial growth in both air ticketing and train ticketing. International air ticketing volume grew over 110%, while international room nights surged by over 130%, reflecting strong demand for global travel services.

In addition, the accommodation reservation services business grew by 22.2%, with revenue reaching RMB 1,377.5 million. This growth is attributed to the expansion of the company’s hotel offerings, strategic cross-selling efforts, and successful targeting of international markets.

The company’s operating profit margin for its core OTA business rose to 31.1%, driven by a combination of increased transaction volume, product diversification, and improved monetization strategies, such as the Huixing Intelligent Travel System, which has enhanced travel solutions for users.

International Expansion and Hotel Management

Tongcheng Travel’s international business continues to thrive, with notable growth in air ticketing and room nights for global destinations. The company also made significant strides with the launch of HOPEGOO, its international travel booking platform, which provides a wide array of services including flights, hotels, train tickets, and local activities in multiple languages and currencies.

Moreover, the company’s hotel management business experienced robust growth, with over 2,100 hotels in operation across China by the end of September 2024, and nearly 1,200 hotels in the pipeline. The expansion of Tongcheng Travel’s franchised travel agency network, with 900 agencies now operating, further bolsters its domestic and international presence.

Technological Innovation Fuels Growth

Tongcheng Travel’s success is also driven by its commitment to technological innovation. The company utilizes AI technology to enhance operational efficiency, with advancements in its customer service systems and the Huixing system, which supports complex itineraries and personalized travel solutions. These technological advancements have enabled the company to scale operations efficiently while improving the user experience.

Additionally, the company’s strategic collaborations with Hainan Airport Group and Jilin Airport Group to develop big data and marketing solutions have further supported its growth and enhanced its technological capabilities.

Positive Outlook for the Travel Industry

Looking forward, the outlook for the Chinese travel industry remains optimistic. The positive sentiment in the sector is fueled by the government’s economic support policies, which have identified the travel industry as a key driver of growth. Additionally, the return of international flights and the easing of visa policies are expected to fuel the outbound travel market.

Tongcheng Travel plans to continue its expansion strategy, focusing on strengthening its position in both the domestic and international travel markets. The company aims to enhance its user experience through innovative products and services, expand its hotel management and tourism business, and explore new investment opportunities aligned with its long-term growth objectives.

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