The online travel agent’s revenue grew 5.6% in the third quarter, as average monthly paying users surged to a record high

The resurgence of Covid-19 in cities across the mainland starting from late August 2022 has disrupted the recovery of China’s domestic travel industry seen in July and August 2022. Against this backdrop, Tongcheng Travel (0780.HK), an innovator and leader in China’s online travel industry, managed to deliver solid user growth on a 5.6% revenue increase during the third quarter of 2022, thanks to rapid growth in its accommodation and bus ticketing businesses.

Tongcheng Travel 2022 Q3 Results Highlights


•      Revenue increased by 5.6% year-on-year to 2.05 billion yuan

•      Adjusted EBITDA amounted to 462.2 million yuan

•      Adjusted net profit amounted to 251.7 million yuan, representing an adjusted net margin of 12.3%


•      Revenue from accommodation reservation services increased by 26.9% year-on-year to 818.7 million yuan and accounted for 40% of total revenue

•      Domestic hotel room nights sold in lower tier cities increased by 10% year-on-year

•      Bus ticketing volume surged by over 100%

User acquisition:

•      Average monthly active users (“MAUs”) and average monthly paying users (“MPUs”) increased by 1.7% and 9.5% year-on-year, reaching record highs of 281.5 million and 36.8 million, respectively

•      Annual paying users (“APUs”) increased from 196.1 million to 200.5 million when compared to the same period last year

The company continued to deliver impressive user growth, especially in lower-tier cities, which paves the way to capture market recovery when the outbreaks stabilize. Whilst the China domestic travel industry experienced a high degree of fluctuations in 2022 Q3, Tongcheng Travel reacted swiftly to market changes, maintained business resilience through adjustments in business strategies, cost control measures, and efficiency optimization.

Average MPUs Rose 9.5% year-on-year to 36.8 million

In 2022 Q3, both average MAUs and average MPUs of Tongcheng Travel reached historical highs, with the average MAUs posting a 1.7% increase to 281.5 million and average MPUs increasing by 9.5% year-on-year to 36.8 million. APUs increased by 2.2% year-on-year to 200.5 million. Paying ratio increased to 13.1%.

Deepened Penetration in Lower-tier Cities

Tongcheng Travel has a strategic focus on lower-tier cities in China, supported by its diversified traffic sources, product innovation capability and flexible operation strategies. During 2022 Q3, the company leveraged its strategic cooperation with urban and rural bus operators to further penetrate lower-tier cities. It also cultivated alternative user acquisition channels by tapping into public transit such as metro and intra-city bus services in several cities. As of 30 Sept. 2022, the registered users residing in non-first-tier cities in China accounted for approximately 86.7% of the total registered users.

Business Growth Boosted by Intra-city Short-haul Travel

Intra-city travel has become immensely popular in China during the pandemic. Demand for suburban accommodation has been on the rise, driving the growth of Tongcheng Travel’s accommodation business. Its revenue contribution has been on an uptrend, reaching 40% in 2022 Q3. To capture market opportunities, Tongcheng Travel continued to enrich its product categories targeting the intra-city travel market. The company also launched a standalone WeChat mini-program for the public transportation business, providing daily transportation and intra-city travel services in over 80 cities across China. As the Covid-19 outbreaks linger, the intra-city travel business will continue to become a major growth driver of the company.

Promoted Industry Digitalization

Tongcheng Travel expanded strategic cooperation with four more airports under the China West Airport Group. It also contributed to the digitalization of the bus ticketing industry by deploying the bus ticketing system and smart ticketing equipment nationwide. On top of that, it has developed a hotel SaaS system, expanding its service scope from independent hotels and small and medium-sized chain hotels to alternative accommodation, helping more accommodation industry operators to improve their operation efficiency.

Highest ESG Rating Among Hotel and Travel Industry Players

As good ESG practice has become an important criterion for responsible investing, Tongcheng Travel has been stepping up its ESG efforts. In September 2022, MSCI upgraded Tongcheng Travel’s ESG rating to “AA”, which is the highest MSCI ESG rating amongst global hotel and travel industry players, reflecting recognition in respect of corporate governance and labor management.

Whilst the outlook of the travel industry remains uncertain in the near term due to disruptions from the pandemic, Tongcheng Travel remains confident of the potential of the China travel industry. Through in-depth understanding of user experience and advanced technological capabilities, Tongcheng Travel has been revolutionizing consumer expectation, making the entire travel process more convenient, personalized and enjoyable than ever. Going forward, the company will continue to utilize its innovation capabilities to enhance products and services, to transform from an online travel agency to intelligent travel assistant.

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