By the end of 2023, Harbin Ice City "took the baton" from Zibo barbecue, igniting a fire in the winter.

At the same time, cultural and tourism bureaus across the country have rolled out major moves, setting off a national wave of cultural and tourism promotion. Behind the thriving scene is the release of residents' travel needs, stimulating the strong recovery of the entire tourism market.

Statistics from the Ministry of Culture and Tourism show that in 2023, the number of domestic trips reached 4.891 billion person-times, a year-on-year increase of 93.3%, and the total expenditure of domestic tourists was 49.1 trillion yuan, a year-on-year increase of 140.3%.

Against this backdrop, Ctrip took the lead in issuing a happy report at the beginning of the year, recently disclosing the financial performance report for the fourth quarter and the whole year of 2023.

In the first year after the epidemic opened, Ctrip achieved a brilliant turnaround, with annual operating income reaching a historical high, a year-on-year increase of 122.20% to 44.562 billion yuan. At the same time, the net profit exceeded the threshold of 10 billion yuan for the first time, a year-on-year increase of 631.68% to 10.002 billion yuan.

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Ctrip's stock price soared, and since the financial report was disclosed on February 22, Ctrip's Hong Kong stock has been rising for three consecutive days, with an interval increase of more than 13%, and on February 26, it set a historical high with a closing price of 371 Hong Kong dollars. However, it is still difficult to judge whether the carnival can continue, and as of February 28, Ctrip's stock price has rebounded to 349.4 Hong Kong dollars.

After enduring the darkest moment, the stone in Liang Jianzhang's heart is still difficult to truly let go.

Long-term sustainability

Overall, in 2023, the year-on-year growth rate of Ctrip's four major businesses all exceeded 100%.In it, the accommodation reservation business saw a year-on-year increase of 133.20% to 17.257 billion yuan, the transportation ticketing business grew by 123.47% year-on-year to 18.443 billion yuan, the travel vacation business increased by 293.98% year-on-year to 3.14 billion yuan, and the business travel management business increased by 108.90% year-on-year to 22.54 billion yuan.

However, against the backdrop of a low base in 2022, the market is most concerned about whether Ctrip can return to a stable growth state after emerging from the shadow of the public health event.

Combining past data, from 2016 to 2019, Ctrip's accommodation reservation business had a compound annual growth rate of 22.74%, and the transportation ticketing business had a compound annual growth rate of 16.49%.

Compared with the performance in 2019, Ctrip's accommodation reservation business in 2023 increased by 27.69% year-on-year, and the transportation ticketing business increased by 32.89% year-on-year, returning to the pre-pandemic growth level.

It is worth noting that in the financial report, Ctrip specified that "overseas hotel and ticket reservation business has only recovered to 80% of the same period before the 2019 epidemic." It can be seen that Ctrip's growth mainly benefits from the obvious recovery of the domestic travel industry, and residents have shown an unprecedentedly high enthusiasm, but overseas business is still in the recovery period.

However, there are also many voices worrying that after the "revenge consumption" in the cultural and tourism industry, it may return to silence and still needs to be tested by time.

Betraying the original intention

It is worth noting that behind the dazzling performance in 2023, it may be at the expense of sacrificing the founding concept of "customer-centric" in pursuit of short-term benefits.

At the end of January 2024, during the Spring Festival travel season, a related entry of "12306 sold out, Ctrip has tickets" topped the hot search list.

Some consumers found that when the tickets went on sale, 12306 sold out in seconds, but Ctrip's platform showed that there were tickets, but they might need to be overpriced to be purchased. For example, during the pre-sale period, Ctrip provided users with schemes to buy round-trip tickets, buy a few more stations, and change second-class seats to first-class seats, indicating that the probability of ticket grabbing would double.Amidst the Spring Festival travel rush, a multitude of consumers who are frustrated by their inability to purchase tickets are immediately incensed by Ctrip's behavior, which resembles that of "scalpers." They have flocked to the 12306 platform to demand an explanation.

In response, 12306 has stated that it confirms no third-party platform has any so-called priority ticket purchasing rights, and the railway department has never granted such authorization. Media reports suggest that Ctrip's internal staff have revealed that this ticket grabbing is achieved through technical means.

Looking back at recent years, Ctrip's "bizarre operations" have frequently occurred, such as using big data to target regular customers with higher prices, offering hotel or flight bookings at prices higher than the official reservation prices, and bundling the sale of value-added services, often leading to public complaints about their "ugly" profiteering.

As of February 28, 2024, on the Black Cat Complaints website, there have been a total of 63,415 complaints related to Ctrip, with 2,673 complaints in the last 30 days, averaging about 89 complaints per day.

Under the deluge of complaints, it's not just consumer rights that are hard to safeguard, but also the autonomy of businesses is not respected. In fact, suppliers have long harbored grievances against Ctrip.

Relevant information shows that Ctrip's retail cooperation with travel agencies began in 2015, but from 2020, Ctrip started to reduce its retail segment, closing new applications for group tour retail business. Until May 2022, Ctrip announced the implementation of a "retail to agency" policy, which will gradually close the domestic retail model for route-based (group tour) cooperation, renewal, operation and maintenance, and online sales, signaling a complete abandonment of the retail model.

If travel agencies wish to continue cooperating with Ctrip in the future, they must exist in the form of agents, which will inevitably result in a loss of autonomy for the businesses.

Under the retail model, Ctrip only provides the platform, with businesses facing consumers directly, taking on pre-sale, sale, and after-sale services, and completing contract signing and invoice issuance, giving businesses a higher degree of autonomy. Under the agency model, suppliers sell travel products to Ctrip, which then sells them at a certain percentage markup and takes on contract and invoice work.

In other words, Ctrip has eliminated the possibility of direct communication between businesses and consumers in the early stages, and has been continuously increasing the commission for agents.

Under such circumstances, it is inevitable that the interests of retailers cannot be guaranteed, with years of advertising investment, word-of-mouth effects, and product accumulation all turning into nothing. However, facing the more powerful Ctrip, the complaints of retailers are as light as a feather, insignificant to the point of being disregarded.However, the compromise of shifting from retail to agency may have led to more aggressive "hegemonic exploitation" by Ctrip.

Some merchants have revealed that after becoming agents, Ctrip has increased its commission fees, with the commission for multi-day tours generally rising from 9% to 15%, and the commission for one-day tours increasing from 8% to 12%.

"Ctrip's commission adjustment comes without negotiation, only notification."

In addition, Ctrip will also charge agents a platform usage fee, which is said to start at 10,000 yuan, with the specific cost depending on different products and cooperation methods.

Not only that, but Ctrip has also changed its "T+7" settlement policy, which was heavily promoted in the early days to attract traditional travel agencies to join, extending the promised settlement period to 45 days.

It is important to note that in the sluggish tourism industry of 2022, for travel agencies whose cash flow is constrained, the extension of the settlement period is nothing more than the straw that breaks the camel's back.

However, in 2019, Ctrip launched a loan project called "Chengxin Chain" aimed at solving the financing difficulties of small and micro enterprises, using the payments that Ctrip has not yet settled as collateral, with loan interest rates ranging from 7% to 18%.

There have been reports indicating that few people can obtain the lowest interest rate, and more likely it is at the level of 14%-15%. Many merchants have lamented that for small and micro enterprises in the industry's winter, the interest is too high.

While Ctrip extends the settlement period, disrupting merchants' cash flow, it also has sufficient funds to provide loans and charge high interest rates, which can be said to be a well-calculated move.

Its ambitions are blatantly obvious.Looking back at Ctrip's development over more than twenty years, it becomes evident that its "domineering" gene has long been embedded in its DNA.

In 2012, Ctrip faced the biggest crisis since its establishment, as competitors such as Qunar and eLong continuously encroached on the market, leaving Ctrip unable to mount a defense.

Its position in the industry was at risk, and at that time, Liang Jianzhang, who had stepped back to pursue studies, decided to initiate a price war worth 500 million USD, severely damaging eLong.

Five hundred million USD, nearly equivalent to Ctrip's total revenue in 2011, but the eventual outcome was significant. In 2012, Ctrip's profit was 655 million yuan, a year-on-year decrease of 39%, while eLong's profit during the same period was only 500,000 yuan, a year-on-year decline of 98.7%.

While inflicting a thousand cuts on the enemy, Ctrip also suffered eight hundred of its own, but the market share it lost was gradually reclaimed. In 2011, Ctrip's market share dropped from 52% to 41%, and after the price war in 2012, it rebounded to 47%.

However, the weight in Liang Jianzhang's heart did not settle, as he still faced formidable competitors. After his return, Liang Jianzhang used capital means to build his own OTA empire.

In April 2014, Ctrip took a stake in Tuniu for 15 million USD, and Tuniu appointed Ctrip's Chairman and CEO, Liang Jianzhang, as a new director. In the same month, Ctrip invested 200 million yuan in Tongcheng Tourism, becoming the second-largest shareholder, just behind the Tongcheng management team. In May 2015, Ctrip became the largest shareholder of eLong.

In October 2015, after multiple unsuccessful attempts to acquire Qunar, Liang Jianzhang bypassed Zhuang Chenchao directly and, through a stock swap, obtained 45% of the total voting rights of Qunar from Li Yanhong with 25% of Ctrip's total voting rights, finally achieving his goal.

Gou Zhipeng, the current president of Qunar, once recalled that Liang Jianzhang was quite strategic. "At that time, eLong's data was not useful to Ctrip, but buying eLong in advance was to stabilize it and prevent it from interfering with the transaction between Ctrip and Qunar."

Thus, from the initial phase of burning money to capture the market and secure financing, to the middle phase of merging with competitors to dominate the market, and to the later phase of manipulating merchants and consumers, Ctrip's "domineering" approach has almost covered every corner of the OTA industry.The OTA industry has been fiercely competing for decades, ultimately condensing into a brief history of the rise of the "Ctrip family."

Indeed, while consumers painstakingly compare options, they may not realize that Ctrip is behind companies like Tongcheng, Qunar, and Tuniu.

Netizens jokingly say that even if you can avoid Ctrip, you cannot avoid the Ctrip family.

Sincerity is the ultimate weapon.

James Liang once said, "You can't see Ctrip's competitors with a high-powered telescope."

However, in recent years, platforms such as Meituan, Douyin, Kuaishou, and Xiaohongshu have gradually extended their reach into the OTA industry, leveraging their scale advantages to exert significant influence, causing the industry structure to change once again, and forcing James Liang to take the situation seriously.

Take Xiaohongshu as an example; with its powerful "planting grass" capability, it has gradually demonstrated strong commercial value in the travel industry, leading many travel agencies to post on Xiaohongshu to self-generate traffic.

Naturally, Xiaohongshu also wants to keep the money in its hands. In July 2022, Xiaohongshu established a travel company—Puzhen Xiangli (Shanghai) Tourism Culture Co., Ltd., which is 100% owned by Xiaohongshu Technology Co., Ltd.

Similarly, in July 2023, ByteDance established Chengdu Haikuo Tiankong Travel Agency Co., Ltd., officially entering the hotel and tourism industry.

In the same month, New Oriental, which had transformed into an e-commerce company, also announced its entry into the cultural tourism industry. Beijing New Oriental Cultural Tourism Co., Ltd. was established with a registered capital of 1 billion yuan, with Yu Minhong serving as the legal representative and chairman. The business scope includes tourism operations and tourism development projects.Analysis suggests that the new platform, though currently not very large in scale, is developing very rapidly and possesses advantages that Ctrip lacks. The biggest feature of TikTok is its algorithm, coupled with traffic advantages and capital support, making everything it does more efficient; Xiaohongshu's strength lies in its unique planting grass model, transforming the user role from an audience to a participant.

Faced with these content players with huge traffic pools and short video live broadcast advantages, OTA platforms can only actively transform. In fact, as early as 2019, Ctrip established an MCN company "Shanghai Chengmeng Culture Co., Ltd.", recruiting travel influencers and incubating platform KOLs, and from 2022, it increased its efforts in content to cope with market changes.

In addition, Feizhu also launched a merchant live broadcast function, and Mafengwo introduced the "buzz" function covering short videos, and the old players are also continuously improving the content construction within the station.

With the change of consumption trends, there are often new opportunities, which is also a new topic brought to Ctrip by the market: pay more attention to the investment in cultural tourism content, establish a good ecosystem with upstream suppliers, and bring a better experience to consumers together.

After all, compared to thousands of routines, sincerity is the eternal must-kill move.