Q1 2021 Trip.com Group Ltd Earnings Call
You for standing by and welcome to the trip Dotcom Group 2021 Q1 earnings conference call.
All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question you will need to press the star key followed by the number 1 on your telephone keypad.
I'd now like to hand, the conference over to Michelle Qi Senior IR director of trip Com Group. Please go ahead.
Thank you good morning, everyone and will come through to still come groups 'twenty 'twenty. 1 Q1 earnings conference call. Joining me today on the call are Mr. Jim Slim Executive Chairman of the Board Ms. Jane Sun, Chief Executive Officer, and MS. Cindy Wang Chief Financial Officer.
During this call we will discuss our future outlook and performance, which are forward looking statements made on the safe Harbor provision of the U S. Private Securities Litigation Reform Act of 1995.
Forward looking statements involve inherent risks and uncertainties.
As such our results may be materially different from the views expressed today.
A number of potential risks and uncertainties are outlined in ship they'll come group's public filings with the Securities and Exchange Commission.
Troops out from the group does not undertake any obligation to update any forward looking statements, except as required under applicable law.
Jim Jim and Cindy will share in our strategy and business updates operating highlights and financial performance for the first quarter of 2021 as well as the outlook for the second quarter of 2021. After the prepared remarks, we will have a Q&A session.
With that I will turn the call over to James James Please.
Thank you Michelle Thank you everyone.
For joining us on the call today.
Due to China's successful containment of the pandemic.
Korea, and China domestic travel market continues to show momentum.
Borders still ship.
They have turned to domestic travel for.
High quality Phoenix Boston destinations.
During the May day holiday.
<unk> 230 million chips were made by tourists domestically, representing a 3% increase compared to the same period in 2019 before COVID-19.
Hitting a new all time high for the holiday.
On our platform.
Long distance travel across provinces in mainland China has made us for recovery.
For the 6 local travel continues.
Strongest growth trajectory.
Chip Stockholm.
<unk> Dot Com group submission is to pursue other purposes for a better world throughout the past for decades.
Have continuously exploring and innovating to further improve our offerings.
We have established the leading global 1 stop travel platform, where users can easily find comprehensive product with a reliable service and so on guarantees and differentiated to travel content.
Or reachable within a few taps on mobile applications.
Following the strong recovery of China domestic travel market, we have successfully.
Our sessions.
Listing.
Secondary listing in Hong Kong in April.
This marks a milestone for a lot of months from which we embarked on a new journey.
Currently our market share in China at the messenger on market is only mid teens, while global market share is still in the low single digits. We're excited for the potential of our growth.
Going forward, we will continue to focus on the following major areas to sustain the group's long term development as well as green new value to the industry.
<unk> continued to improve up our offerings and service quality will be pushing ahead with more in depth to our products to meet the evolving needs of the.
Post pandemic covenants.
While strengthening collaboration on the cross sales between business lines to provide a comprehensive ASO.
Free 1 stop travel experience second.
Second is content oriented innovation for engaged users and stimulate travel.
We will continue to Ctrip dot com group transform from solely purchasing platforms 2 hubs of travel inspiration posting the best travel deals.
By hosting more comprehensive travel content.
Such as live streaming enhanced information on fees.
In short videos, we are able to ignite greater interest in travel and facilitates new trends such a significant increase in short distance traveled.
And trips to long haul destinations when it.
In the past per year.
First off the content ecosystem without power marketing hub startup.
Got it.
As a centerpiece to boost our partners marketing capability on our platform.
Hub functions as a flagship store for our partners.
They are able to integrate differentiated to travel content in a wide variety of other product offerings.
Brian huge traffic volume and develop exposure would be cash promotion.
By bolstering their brand image and boosting customer engagement.
For men can expand our global perspective.
Every manoeuvre it initiative, we've tested and proved successful in our domestic markets.
Yeah valuable.
New valuable assets for global development.
We are putting this advantages position to use in preparation for the upcoming global travel recovery.
Progressing in these areas will require investments in technology and R&D as a driver for efficiency and growth. We believe our investments will create long term value not only for our users, but also for our shareholders.
<unk> industry and our society as a whole go on offense all users for their loyalty and trust our business partners, where they are not spending on support.
And our more than 30000 employees around the world for their hard work and commitment to customers from the partners during such a difficult time.
The other ones driving us to greater success with that I will turn the call over to Jane for operating highlights.
Thanks, James Good morning, everyone I would like to first quickly walk through our Q1's accounts.
And then touch base on our post pandemic gross drivers and the future opportunities.
Q1 overall highlights.
Future day travel restrictions in mainland China to contain virus in January and February of 2021 around Chinese new year, our top line decreased by 13% year over year and about 50% as compared to the same period in 2019 day.
Site, such challenges China's domestic travel market rebounded strongly in March and with even greater momentum in April and May.
Both hotel and Air ticket has grown strongly cross sales between air to a hotel product in Q1 increased significantly compared to the same period in 2019.
We are also delighted to see revenue from other business lines in Q1 exceeded the same period in 2019.
Revenue from corporate cash.
Our management has completely recovered compared to 2019 pre COVID-19.
And new initiatives, such as travel financial services and domestic travel advertisement have both delivered strong results.
Second.
May labor day holiday highlights.
As China control pandemic effectively.
Accelerate to vaccination significantly.
And removed domestic travel restriction.
Pent up demand to travel.
Volume has.
Has been unleashed during the May labor day holiday.
Our total number of domestic bookings for five day break show year over year growth of approximately 270 per cent compared to 2020 and they represent a more than 30% increase compared to the same period in 2019 pre COVID-19.
Yeah.
Significant increase were recorded across many business areas.
Daily average day that well used things for 2019 May Labor day weekend.
For one day shorter than it was for 2020 in 2021.
Daily average domestic hotel T&D during the labor day weekend, so on search.
<unk> hundred 90% gross compared to 2020 and close to 50% gross compared to 2019 2019 pre COVID-19.
Daily domestic hotel GMB recorded a historic high in the first 3 days for the holiday season.
Daily average domestic air ticket booking also saw a 190% year over year gross compared with <unk> 20, and approximately 30% gross compared to 2019 pre COVID-19.
During this period.
Also observed new trends in customer behavior.
First with the National National borders remain short shut domestic travel has become the best solution to meet the pentair outbound travel demands.
We believe this has driven a rapid growth of quality leisure travel book.
Bookings for mid to high end hotels has spearheaded the growth in the past 12 months.
The rising demand for quality trouble is also shaping desk price selling.
In the past year, we have strengthened our product offering we believe our newly expanded inventory will continue to contribute to the long term growth of quality leisure market. After the reopening of the national borders.
Second long distance travel across provinces.
Completely recovered.
In addition, short distance and intra province travel represent a new group.
Gross driver.
In the May Labor day weekend.
Average daily domestic hotel GMB for intra property provincial sales increased more than 60 per cent compared to 2019 pre COVID-19.
And average daily JV for domestic attraction and activity doubled compared to 2019 pre COVID-19.
Good.
Content strategy.
When travelers a seat.
<unk> elevated net travel experience day.
Also on increasingly enjoying the excitement of day.
Discovery sharing and be inspired by the rich content.
Nowadays we are on digitally connected and technology constantly drive the evolution of the industry.
The boundary between offline and online engagement has for Larry.
A true 1 stop platform should transcend the convention search to book model.
Trip Com group is not only for me.
Focusing on the development of the bird best purchasing platform, but also become becoming the hub of inspiration.
As we continue to implement our content strategy.
Ctrip mobile App has undergone significant uptake.
Over the past months.
The Livestream channel is now an open platform featuring Kols and industry partners.
Hundreds of life events.
For streamlined in April and D day, you for the live streaming section on <unk>.
T doubled.
Overnight.
We also launched for housing over travel marketing hub.
In late April.
Through Ah ha.
On this and suppliers are given a tool to deliver differentiated and tailor made from travel conflict.
And why the diversity of marketing activity.
To interact with our high quality users and gain exposure.
We still have an existing trip Com group marketing channel in debt arsenals.
On this can extend and enhance their marketing performance to drive traffic volume.
And conventional conversion.
In less than 1 month more than 150 destination hotels theme parks and attractions have already joined us for hot.
We expect to see it growing into our rich content ecosystem.
During the past quarter.
Number of trouble Kols on our platform increased by more than 50% sequentially.
The enrich the content.
Resulted in high number of users visits and longer use user time spent on the content channel.
During the Labor day weekend.
More than 40% of the App users visited our content channel.
We will continue to focus on the improvement of the content generation and delivery and create information feeds our users go to source for travel destination and ideas and inspiration.
Force corporate travel management.
While the leisure travel is growing healthily. We are also excited to see corporate management percentage also fully recovered from the negative impact.
Of the pandemic.
Despite the alternative use of the <unk> comprehensive business travelers recovered strongly alone with the economic growth in the domestic China market.
We also see shifting trends with business travelers turning to corporate management services from other channels.
It will form a strong cornerstone for the long term development of our corporate travel management.
Fifth overseas market.
Although the world is still facing uncertainty.
Due to the COVID-19.
We're encouraged by the development of vaccine.
On 1 hand.
On a fully prepared to take advantage of that protein international travel recovery on the other hand, we also continue to support different destination markets to promote local domestic travel under the current situation before the border open.
For.
For our overseas market Hotel reservation.
Asia for the domestic travelers in the countries outside of China has already recovered to pre COVID-19.
Pandemic level insert in the recent months.
Driven by increased the number of domestic space in respective markets.
We expect to see volume bouncing back at a greater scale with cross border restrictions are lifted and global travel reopens.
With that I will now turn the call over to Cindy.
Thanks, Jane good morning, everyone to avoid comparing with the same period in 2020, when the pandemic outbreak first appeared our inks that compare our.
Performance in the first quarter with the same period in 2019, and the fourth quarter of 2020.
For the first quarter of 2021 chip Dot Com group reported net revenue of RMB 4 1 billion.
Presenting on 50% decrease from the same period in 2019 debt.
First half of the quarter was significantly impacted by the resurgence of COVID-19 cases in China.
And the travel restrictions that followed.
However, our domestic business showed strong resilience and quickly rebounded after the Chinese new year holiday.
Both our domestic hotel and air business has fully recovered to pre COVID-19 levels. Since early March and achieved a double digit growth during the month compared with the same period in 2019.
Revenues from corporate travel business grew 6% in Q1 compared with 2019.
Driven by the expansion of its client pool, and the increase of cross selling to accommodation products.
Revenues from other business grew 17% in Q1 compared with 2019.
Thanks to the fast development of our new initiatives, such as travel financing services and domestic travel advertisement business.
Gross margin was 75 per cent for the first quarter of 2021 decreased from 82% for.
For the previous quarter, largely due to the travel restrictions at the outset of 2021.
Excluding share based compensation charges, our adjusted operating expenses.
Creased by 30% compared with the same period in 2019 and towards flattish compared to the previous quarter.
Adjusted product development expenses for the first quarter increased by 9%.
To RMB, 2 1 billion from the previous quarter.
Primarily due to fluctuation.
Fences related to product development personnel.
Total head count in our product and development team is largely stable.
And the average salary increase modestly as we entered into 2021.
Yeah.
Adjusted sales and marketing expenses for the first quarter decreased by 22%.
To RMB 930 million for on the previous quarter, mainly due to the decrease in expenses related to sales and marketing promotional activities in response to the decreased the travel demand in a quarter.
Adjusted G&A expenses for the first quarter increased by 20% from the previous quarter, mainly due to the fluctuations in the allowance for the expected credit loss.
Following the common market practice, we start to disclose adjusted EBITDA from this quarter.
Difference between adjusted EBITDA and non-GAAP operating income represents the depletion depreciation and amortization expenses, which is available on our 6K form.
Adjusted EBITDA was RMB I was negative RMB $216 million and adjusted EBITDA margin was negative 5% for.
For the first quarter of 2021.
Diluted earnings per ordinary share and per ads were RMB 2.888.
Our U S dollar 40 for <unk>.
For the first quarter of 2021.
Excluding share based compensation charges and fair value changes of equity security investment and exchangeable senior notes non-GAAP diluted loss, where other per ordinary share and per ads were RMB <unk>.
34, since our U S dollar <unk> for the first quarter of 2021.
As of March 31, 2021.
<unk> of cash and cash equivalents.
Net cash short term investments held to maturity.
Maturity.
Time deposits and financial products was RMB 66.1 billion are U S. Dollar 10 1 billion.
With the successful dual listing in Hong Kong in April we have further strengthened our cash balance by around $1 2 billion U S dollars.
As a listed company on the Hong Kong stock exchange, we need to comply with regulations and followed a common practices adopted by public companies in Hong Kong market.
As a result going forward, we will no longer provide guidance for the coming quarters.
In stack, we would like to provide some recent colors of our business.
For the quarter to date, our total revenues was up by more than 80% year on year, mainly.
Mainly driven by the growth in domestic accommodation and air ticket reservations.
International revenue was still under pressure.
Compared with the same period of 2019.
Domestic accommodation and air ticketing reservations were both up by more than 20 per cent quarter to date.
Also the fast recovery of domestic China.
If gratulate, making up the loss of all of our business.
Recently, our total hotel reservation have returned to pre COVID-19 level, while price is still under pressure.
We remain committed to deliver sustainable growth and create long term value for our shareholders.
With that operator, please open the line for questions.
Thank you.
Thanks for asking question. Please press star 1 on your telephone and wait for your name to be announced if you wish to cancel your request. Please press star 2.
If you're on a speakerphone please pick up the handset to ask your question.
We do ask that you. Please limit your questions to 1 per queue today and rejoin the queue. If you have further questions.
Your first question comes from Alex <unk> with Morgan Stanley.
Thanks for management for taking my question.
Congrats on a very strong results and rebound in travel demand.
My question is regarding the resurgence of COVID-19 globally.
On travel international travel remains uncertain.
So how we will treat dotcom prepare for strategy and focus in this environment. Thank you very much.
From a person we have full confidence in the complete <unk>.
Sure.
International travel relative.
Or do you think those promising recovery of trouble in some countries and regions to be the widespread vaccination rollouts.
Across all markets, we're seeing domestic travel market rebounds.
Gradually makeup for lots of cross border travel.
Recently.
Our total hotel bookings.
Reached free.
Pre COVID-19 level, while prices remain under pressure.
In Q1 on overseas hotel bookings by non Chinese customers.
<unk> Dot com platform.
Good day recovered to the pre pandemic level.
Our teams.
Are utilizing.
At this time.
<unk> has on fundamentals and price product service and user experience for overseas users.
Doug.
We will be best positioned to capture the pent up travel demand where international travel recovers.
Thank you.
Your next question comes from Ronald Keung with Goldman Sachs.
Thank you James Jane Cindy and Michelle.
Just following on that that recovery path could you could management share just how we see the forward say few quarters and maybe into 2022, just how how are we expecting that international recovery path baby, if not quantitatively maybe qualitatively.
Net recovery path and how how would we plan on O sales on marketing.
For strategies on our spending alongside that eventual international recovery path.
And are we thinking about domestic will shift.
Domestic strength that we see now what she maintained while international will be incremental kind of recovering with the expectation. Thank you.
Hmm.
Thanks for your question, we look at our business in 3 segments. The first 1 is domestic travel. The second award is for the areas outside of China debt.
Mastec a travel within each respective countries.
Furthermore, he has cross border travel so first of all for a day.
Domestic travel with China, we have full confidence that our government has very effective control procedures to make sure our mainland China's economy, a well gross family and normally when the economy is growing strongly on travel market will outpace the GDP.
Gross in that market and we will work very hard to serve our customers to capitalize on the strong momentum. So that's the first day within domestic travel for mainland China. The second thing is outside of China. We also have seen a strong recovery in each respective.
On markets, we are targeting at.
Based on the numbers, we're looking at for the most recent months.
These are the mesh travel or in their respective areas outside of mainland China have already day recovered to pre COVID-19 level. So we have a very strong confidence that are applying for whatever work.
In the mainland China will also be capitalized on some of the market we're targeting net debt.
Suddenly is cross border travel.
That is a little debt it takes more coordination between nations, but we are encouraged by the development. After a vaccination I think for each government is pushing very hard to make sure the people within each country are well protected so.
For what we have seen a U K a.
Europe.
In the United States are moving very fast in a friend and also Asia. Most of the country have demonstrated their ability to control and also.
And handle these kind of crisis quite well. So we are hopeful that Asia Europe America.
Gradually we'll be opening net and with more vaccination is taken hopefully the passport to indicate.
The passengers of.
Information and therefore gradually we will be able to capitalize on the pent up demand for cross border transactions as well. Thank you.
Yeah.
Your next question comes from Alex Yao with JP Morgan.
Thank you management for taking my question.
On a 2 fold up with a run off question.
From a different angle.
So I think ultimately COVID-19 will be behind on so it could be the end of the true.
Not sure.
When we enter into the post COVID-19.
Stage, how do you think about them.
For more normalized gross rates in the next couple of years.
One of the new revenue opportunities, you're seeing post COVID-19.
As a result of perhaps the consumer behavior change or business with behavior change. Thank you.
Yeah, I think we're all very excited to wait for the pass of the COVID-19 for.
From our search results on our sites that pent up demand is very strong.
We are confident eventually the scientists around the world will come up with very strong method.
2 contended virus and government also through the past year.
Accumulated to us how the experience to make sure that going forward the virus lumpy well content and our team works very hard to accumulate our knowledge and experience to handle different situations.
So within our domestic travel there are also a lot of opportunity our market share still is quite low it's in the teens in 2019, our market share is around 13%.
There are still a lot how for them.
Address the market that we have not tapped into.
So for example, our content for then our strategy is a new area of the market will grow quite nicely in the next 3 to 5 years and if we can't address and take about 3% share 2 5% share that's quite significant.
Already secondly, we also saw the short haul.
Travel, which is serving as an alternative when people are are contained within their own borders and thirdly corporate travel as we discussed is growing very strongly traditionally it's just by the other.
Uh-huh channels, but we owe to us a very good services to address the customers who need for travel from cities to cities and frequently on the road.
So with our strength in our hotel air and other area.
Be able to help the customers who travel so frequently around China and so forth also the cross sell opportunity.
While wingstop platform represents a good opportunity to make sure our customers' needs are addressed very nicely rather than having our customers for searching to search all around with the website to find the right product, we owe to provide better services for them when we.
Use a wow.
<unk> technology, and 1 stop shopping for our platform to provide the best for service for our customers and these new initiatives are mainly.
Centered around the domestic travel for China and in addition, I think the cross border travel inbound travel and for the customers around the World. We're also add another layer of the group.
And our team is working very hard with our global team just to make sure that our strength in the mainland China eventually will be duplicated in the global places. So we're excited for the future growth.
<unk>.
Your next question comes from Thomas Chong with Jefferies.
Hi, Good morning, Thanks management for taking my questions other questions relating to the expense side.
We have done a lot of work to optimize other cost how should we think about the trend in expenses going forward after COVID-19.
No.
Thank you Thomas.
Yeah, thanks to our largely flexible cost and expenses.
In addition, operating.
Management.
During past year, we actually are further streamlines our operations across business lines.
In addition to certain adjustments related to COVID-19.
Our improvements on content and cross selling.
Going forward for further help us to lift our marketing efficiency.
We expect in terms of the cost trend in the year 2021, we expect a comparatively modest increase in personnel related expenses.
And sales and marketing expenses are largely it is rational and expression, though and adjusted in accordance with our business recovery and we will continue to adopt and all I drove that strategy.
We.
Furthermore, we believe our improvement on content and cross selling will help us improve our marketing efficiency in general.
But at the same time, we will also reserve certain budgets in the short term to development to develop content ecosystem and to prepare for recovery and growth of the international market.
Thank you.
Your next question comes from James Lee with Mizuho.
Great. Thanks for taking my questions. My question is regarding advertising opportunity I was hoping maybe Jane you already spoke about live streaming and star hub.
Osama very interesting and can we maybe get early sense about understanding the friction that you're experiencing with advertiser when they tried to adopt the new content platform and how you plan to resolve it specifically and also maybe early learnings from consumers.
If you have any.
And what do they like about your new content platform and 1 needs to improve and lastly, maybe over longer term can you talk about what kind of critical mass that you need in terms of users and engagement and that will be to ultimately improve monetization. Thanks. So much.
Sure from a long term perspective.
Content and.
Uh huh.
Content and also.
Okay.
And also other retracement market currently is about 90 billion at market and by 2025. The market size is going to be is expected to be around 140% on 140 billion.
And our target is that if we work very hard to address about 3 to 5 per cent of the total market that can be quite significant for our topline and bottom line as well secondly are the strength of our platform.
Is that the quality of our customers is very strong and they are looking for inspiration when they decide where to go particularly during the holiday season summer vacation Chinese new years et cetera. So when we post our content onto our platform we have already seen in the us.
Doubled for.
For that channel and also the staying on.
For the time spent in this channel also doubled their significantly in the channel. So that gives us a very strong indication that customer need for content.
And we will also offer a very customized on match between the customers what they're looking for to be suitable for their family for them for their interest.
Certainly with the strong customer.
Interest as well as fair.
Spending power the areas for hotels travel destination attraction.
We do a very good analysis with all to offer the best alternative for customers to look at.
So that also is a strength for our platform we have seen very strong conversion.
On our platform when we post on the relative and Oh very carefully analyzed.
Matching for our customers. So these are the strength for on our platform and of course, we only started this.
System, 1 months ago, the momentum is strong, but it takes a our team for our strong execution and.
It took to make sure the product is suitable for both our customers and our partners, but we're confident as long as we keep up.
With our strong execution will be on we'll be able to offer the best product for both of our consumers as well as the partners.
Thank you.
Your next question comes from Joyce Ju with Bank of America.
Good morning, James Jane Cindy and Michelle Congrats on the very strong result, this quarter and thanks for taking my questions. On my question is related to government on recent antitrust push we have seen in kaposi sarcoma leaders recently being inspected and also some of them even pay the penalties and high Trust day.
You know movement. So just wanted to ask like if we have been we had related like you know risk and if we have been in any communications with the regulators index perspective, given you know I think the antitrust you know look group at very beginning there.
Couple areas of expectations like they actually include like a price discrimination likely on a monopoly power off the market places just try to understand how we actually avoid be into a situation like you know be a fine on like you know get paid a penalty for it from this thank you.
Thank you.
We are fully supports our government for their efforts to create a healthy and a sustainable growth market on.
Our belief is that the market if we can.
Create a market that is a healthy and sustainable.
We are the industrial will grow.
Very healthy manner on set.
Currently our market share is quite small in scale.
The market share for 2019 is around 13% there on the travel industry is faster growing E on.
Neat Qualitate service provider to address our customers' needs. So we will work very hard with the government with our partners to make sure our customers demand is very well addressed thank you.
Your next question comes from Tien, who with Th capital.
Yes.
Good morning management. Thanks for taking my question I have 2 quick questions on.
On the income statement for the current travel so I saw on like a <unk>.
You're 100% gross and it's really outstanding so I really want us 1 to understand what are the driver behind behind the hundreds and since you're on your grow and what could be the future gross you know in this line at least for I'll look for that.
The second 1 is for other business. So it is actually showing the year on year positive returns. So can management give some color.
To tell us what's her with Eaton debt.
Others, and you know what's item within the you know the other.
Others are you know driving.
Driving force for this part of revenue to grow that fast that's my 2 questions. Thank you.
Thank you.
Kim.
Ctrip is always the leader and especially in that business travel space of course, the 100% a gross a the first reason is the lower comparatively low base of lost share because lost share. This first quarter of last year is to.
The outbreak of the pandemic basically there is a a very low traffic, especially for them.
[noise] travels are therefore, we had a 100% gross and secondly, it's actually reflect the fact that our once there is a pandemic or the on any emergencies.
On a market leader.
Always a consolidate or have Ah Ah Ah Ah growing our market share very quickly. This also reflected in our high gross in that business travel, especially the corporate travel and the search results and Jane.
Right.
Our hotel business in the corporate travel group.
All very fast significantly firstly, because we have a very uh huh.
Competitive pricing all competitive product offering to serve our corporate travel needs and secondly, we also successfully cross sell a hotel product for.
From the air business from the air.
Customers from on the corporate travel are these other 3 reasons why you see a very strong gross in the corporate travel.
And the second question Oh, the other other.
Other basically is a reflect of the Ah Ah Ah market value adjustment for the available for sale investments on the first actually this basically reflect the brand trends debt of the market pick.
For the first quarter, our all our investment are classified as available for sale are they have to do we.
Revaluations on quarterly basis, so compared with the last year fourth quarter last year or the market pricing gross significantly.
This is the reason why we had a 1 time gain on this category.
Your next question comes from Brian <unk> with Citi.
Thanks management for taking my question congratulations on the solid results on a recovery so.
With the strong for domestic travel.
On management's vision for women.
For this by different segments.
Especially for upcoming summer break on the Golden week National day. Thank you.
Yeah, the Golden week holiday is a very strong as we discussed on the pent up demand have drive the gross.
As previously.
Previously as Scott discussed the volume gross for the hotel is a more than.
It's a 3 digit growth for year over year for 2019.
It's also grown more than 60% year over year for air ticket.
Rose.
Ah 3 digits compared to the last year.
So for the.
Next year, it's a for the for the 2019, it's more than 30% year over year gross for.
For the Q2 number our tended to Cindy for highlights.
Yeah.
We will not provide quarterly guidance anymore in a car in order to comply with the Hong Kong stock has changed regulations.
But we would.
Like to share some recent colors without investors for the quarter to date, our total revenue was up more than 80% year over year.
Driven by the strong domestic travel recoveries.
But at the same time the international revenues remain still remain under precious so computer.
2019, both our domestic hotel and air ticket reservations grew more than 20 per cent.
Compared to quarter to date are specifically during the past labor day holiday, our total domestic reservations grew by more than on 270.
<unk> percent year over year and interest.
Percentage compared with 2019, AMA, which domestic hotel and air reservations were up by more than 50% and 30% respectively compared with <unk>.
2019 are the faster recovery of our domestic China travel with gradually and fully make up the loss of outbound business.
Recently, our total hotel reservations have returned to pre COVID-19 level, but.
But the price is still under some pressure. Thank you.
Okay.
That does conclude our question and answer session I'll now hand back to Michelle Qi for closing remarks.
Thank you. Thank you everyone for joining US today, you can find the transcript and webcast of today's call on Iraq.
He's still calm, but look forward to speaking with you on our second quarter 2021 earnings call for you and have a good day. Thank you very much. Thank you.
That does conclude our conference for today. Thank you for participating you may now disconnect.
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Thank you for standing by and welcome to the trip Dotcom Group 2021 Q1 earnings conference call.
All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question you will need to press the star key followed by the number 1 on your telephone keypad I would now like to hand, the conference over to Michelle Qi Senior IR director of trip Com Group. Please go ahead.
Thank you.
Morning, everyone and welcome to keep they'll come group 2021 Q1 earnings conference call. Joining me today on the call are Mr. Kim Slim Executive Chairman of the Board Ms. Jane Sun, Chief Executive Officer, and Miss Wendy Wong Chief Financial Officer.
During this call we will discuss our future outlook and performance, which are forward looking statements made on the safe Harbor provision of the U S. Private Securities Litigation Reform Act of 1995.
Forward looking statements involve inherent risks and uncertainties.
As such our results may be materially different from the views expressed today.
A number of potential risks and uncertainties are outlined in <unk> they'll come group the public filings with the Securities and Exchange Commission.
You've talked on the group does not undertake any obligation to update any forward looking statements, except as required under applicable law.
Jim Jim and Cindy will share in all strategy and business updates operating highlights and financial performance for the first quarter of 2021.
Well as the outlook for the second quarter of 2021. After the prepared remarks, we will have a Q&A session with that I will turn the call over to James James Please.
Thank you Michelle Thank you everyone.
For joining us on the call today.
Due to China's successful containment for the pandemic.
Korea, China domestic travel market continues to show momentum.
The border still ship.
I have turned to domestic travel.
High quality students Boston destinations.
During the day holiday.
Really 230 million chips were made by tourists domestically, representing a 3% increase compared to the same period in 2019 before COVID-19.
Setting a new all time highs for the holiday.
Our platform.
Long distance travel across provinces in mainland China has made a full recovery.
So this is local travel continues.
Strongest growth trajectory.
Jim Stockholm.
Trip Com group submission is to pursue the purpose for a better world throughout the past for decades.
On continuously exploring and innovating to further improve our offering.
We have established the leading global 1 stop travel platform, where users can unify comprehensive product.
Well servicing sounds guarantees and differentiated to travel and Samsung.
For reachable within a few taps on mobile application.
Following the strong recovery on China domestic travel market.
Successfully.
Our sessions.
Listing.
Secondary listing in Hong Kong in April.
This marks the milestone development from which we embarked on his journey.
So not only on market share in China's industrial market is only mid teens, while global market share is still in the low single digits. We're excited for the potential of our group.
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Going forward, we will continue to focus on the following major areas to sustain the group's long term development as well as green new value to the industry.
First continue to improve up our offerings and service quality will be pushing ahead with more in depth to our products to meet the evolving needs.
Post pandemic covenants.
While strengthening collaboration on the cross sales between business lines.
On a comprehensive it.
Fossil free without problems.
Second is content oriented innovation day engaged users and stimulate travel.
We will continue to Ctrip dot Com group platform from solely purchasing platforms 2 hubs travel inspiration both things the best travel deals.
For hosting more comprehensive teleconference.
Such as live streaming enhanced information feed.
And short videos, we are able to ignite greater interest in travel and facilities new trends such as significantly increased the short distance traveled.
And trips to long haul destinations when it.
In the past per year.
First off the content ecosystem without power market.
Scott.
For the centerpiece to boost our commerce marketing capability on our platform.
Functions as a flagship store for our partners.
Where they are able to integrate differentiated to travel content in a wide variety of other brought offering.
Thank you for traffic volume and develop exposure with a promotion.
About bolstering the brand image and boosting customer engagement.
Both men can expand our global perspective.
Every maneuver on the initiatives, we've tested and proven successful in our domestic market.
You have on it will.
These are valuable assets for global development.
We are putting this advantages positions to us for.
Operations for the company's global travel recovery.
For breast imaging lease area to a required investment in.
In technology, and R&D as a driver for efficiency and growth. We believe our investments will create long term value not only for our users, but also for our shareholders.
For industry, and our society as a whole lot of sense all users for their loyalty and trust business partners well, they're understanding on support.
And our more than 30000 employees around the world for their hard work on its amendments for customers and partners during such a difficult time.
The other ones driving us to greater success with that I will turn the call over to Jane for operating highlights.
Thanks, James and good morning, everyone I would like to first quickly walk through our Q1 results and then touch base on our post pandemic gross drivers and the future opportunities for us.
Q1 overall highlights.
Due to the travel restrictions in mainland China to contain virus in January and February of 'twenty or 'twenty, 1 around Chinese new year, our top line decreased by 13% year over year and about 50% as compared to the same period in 2019 despite.
Such challenges China's domestic travel market rebounded strongly in March and with even greater momentum in April and May.
Both hotel and Air ticket has grown strongly cross sales between air to a hotel product in Q1 increased significantly compared to the same period in 2019.
We are also delighted to see revenue from other business lines in Q1 exceeded the same period in 2019.
Revenue from corporate cash.
Management has completely recovered compared to 2019 pre COVID-19.
And new initiatives, such as travel financial services and domestic travel advertisement have both delivered strong results.
Second.
Me Labor day holiday highlights.
As China control pandemic effectively.
Accelerate to vaccination significantly.
And removed domestic travel restriction.
Pent up demand for travel.
Volume has.
Has been unleashed during the May labor day holiday.
Our total number of domestic bookings for 5 day break show year over year growth of approximately 270 per cent compared to 2020 and they represent a more than 30% increase compared to the same period in 2019 pre COVID-19.
It.
Significant increase were recorded across many business areas.
Daily average data we used since the 2019 may labor day weekend.
1 day shorter than it was for 2020 in 2021.
Daily average domestic hotel G N V. During the Labor day weekend, So a church, all 390% gross compared to 2020 and close to 50% gross compared to 2000 22019 pre COVID-19.
Daily domestic hotel G M D recorded a.
Historic high in the first 3 days for the holiday season.
Daily average domestic air ticket booking.
So short of 190 per cent year over year gross compared with 2020, and approximately 30% gross compared to 2019 pre COVID-19.
During this period, we also observed new trends in customer behavior.
First with the nation National borders remain short shut domestic travel has become the best solution to meet the pent up outbound travel demands.
We believe this has proven the rapid growth of quality leisure travel well.
Bookings for mid to high end hotels has spearheaded the gross in the past 12 months.
The rising demand for quality travel is also shaping the surprisingly.
In the past year, we have strengthened our product offering we believe our newly expanded inventory will continue to contribute to the long term growth of quality leisure market.
But the reopening of the national borders.
Second long distance travel across provinces.
Completely recovered.
In addition, short distance and intra province travel represents a new group.
Gross driver.
In the May Labor day weekend.
Average daily domestic hotel GMB for intra property provincial fee increased more than 60 per cent compared to 2019 pre COVID-19.
And average daily JV for domestic attraction and activity doubled compared to 2019 pre COVID-19.
Good content strategy.
When travelers are seeking an elevated travel experience day.
Also I increasingly enjoying the excitement of discovery share range and be inspired by the reach content.
Nowadays, we are digitally connected and tech knowledge constantly drive the evolution of the industry.
The boundary between offline and online engagement has relearned.
A true 1 stop platform should transcend the convention search to book model.
Trip Com group, if not only on me.
Focusing on the development of the best purchasing platform, but also become becoming the hub of inspiration.
As we continue to implement our content strategy.
Or ctrip mobile <unk> has undergone significant uptake.
Over the past months.
The livestream channel.
Now and open platform, featuring Kols and industry partners.
Grades of life events.
We're streamlining in April and do you use for the live streaming section on ATP doubled overnight.
Overnight.
We also launched stubhub over travel marketing hub.
In late April.
So does that help.
Hamish and suppliers are given a tool to deliver a differentiated and tailor made from travel content.
And why the diversity of marketing activity.
To interact with our high quality users and gain exposure.
With the hub and existing trip Com group marketing channel in their Arsenal.
On this can extend and enhance their marketing performance to drive traffic volume.
And convention conversion.
In less than 1 month more than 150 destination hotels theme parks and attractions have already joined us for hub.
We expect to see it growing into a rich content ecosystem.
During the past quarter net.
<unk> of trouble Kols on our platform increased by more than 50 percentage sequentially.
The English content.
Resulted in high number of users visits and longer use user time spent on the content channel.
During the labor day weekend more than 40% of the App users visited our content channel.
We will continue to focus on the improvement of the content generation and delivery and create information seats. Our users go to source for travel destination and ideas and inspiration.
Force corporate travel management.
While the leisure travel is growing healthily.
So excited to see corporate day management business also fully recovered from the negative impact for.
Of the pandemic.
Despite the alternative use for <unk>.
<unk> comprehensive business travelers recovered strongly along with economic growth in the domestic China market.
We also see shifting trends with business travelers turning to corporate cash management services from other channels.
It will form a strong cornerstone for the long term development for our corporate travel management.
Fifth overseas market.
Although the world is still facing uncertainty.
Due to the COVID-19, we're encouraged by the development of vaccine.
On 1 hand, we.
We are fully prepared to take advantage of that Croce international travel recovery on.
On the other hand, we also continue to support different destination markets to promote local domestic travel under the current situation before the border open.
For our overseas market hotel reservation for the domestic travelers in the countries outside of China have already recovered to pre pandemic.
Pandemic level and so in the recent months.
Driven by increased the number of domestic space in respective markets.
We expect to see volume bouncing back at a great scale once cross border restrictions are lifted and global travel reopens.
With that I will now turn the call over to Cindy.
Thanks, James Good morning, everyone to avoid comparing with the same period in 2020, when the pandemic outbreak first appeared our instead to compare our.
Performance in the first quarter with the same period in 2019, and the fourth quarter of 2020.
For the first quarter of 2021 chip Dot Com group reported net revenue of RMB 4 1 billion.
Presenting a 50 per cent decrease from the same period in 2019 debt.
The first half of the quarter was significantly impacted by the resurgence of COVID-19 cases in China.
And the travel restrictions that followed.
However, our domestic business showed strong resilience and quickly rebounded after the Chinese new year holiday.
Both our domestic hotel and air business has fully recovered to pre COVID-19 level seems 30 March and achieved double digit growth during the month compared with the same period in 2019.
Revenues for our corporate travel business grew 6% in Q1, compared with 2019, mainly driven by the expansion of its client pool and the increase of cross selling to accommodation products.
Revenues from other business grew 17% in Q1 compared with 2019, thanks to the fast development of our new initiatives, such as travel financing services and domestic travel advertisement business.
Gross margin was 75 per cent for the first quarter of 2021 decreased from 82 per cent for the previous quarter largely due to the travel restrictions at the outset of 2021.
Excluding share based compensation charges.
Adjusted operating expenses decreased by 30% compared with the same period in 2019 and for flattish compared to the previous quarter.
Adjusted product development expenses for the first quarter increased by 9%.
To RMB, 2 1 billion from the previous quarter.
Primarily due to fluctuation.
Fences related to product development personnel.
Total head count in our product and development team is largely stable.
And the average salary increase modestly as we entered into 2021.
Yeah.
Adjusted sales and marketing expenses for the first quarter decreased by 22%.
To RMB 930 million for on the previous quarter, mainly due to the decrease in expenses related to sales and marketing promotional activities in response to the decrease the travel demand in a quarter.
Adjusted G&A expenses for the first quarter increased by 20% for on the previous quarter, mainly due to the fluctuations in the allowance for the expected credit loss.
Following the common market practice.
We start to disclose adjusted EBITDA from this quarter.
Difference between adjusted EBITDA and non-GAAP operating income represents the depletion depreciation and amortization expenses, which is available on our 6 pay for.
Adjusted EBITDA was RMB I was negative RMB $216 million and adjusted EBITDA margin was negative 5% for.
For the first quarter of 2021.
Diluted earnings per ordinary share and per ads were RMB 2.888.
Our U S dollar 44 cents for the first quarter of 2021.
Excluding share based compensation charges and fair value changes of equity security investment and exchangeable senior notes non-GAAP diluted loss, where other per ordinary share and per ads were RMB.
34, since our U S dollar <unk> for the first quarter of 2021.
As of March 31, 2021.
And so for cash and cash equivalents.
Cash short term investments how too much.
Maturity.
Time deposits and financial products was RMB 66.1 billion are U S dollar pinpoint 1 billion.
What's the success for your listing in Hong Kong in April we have further strengthened our cash balance.
Around $1 2 billion U S dollars.
As a listed company on the Hong Kong stock exchange, we need to comply with regulations and followed a common practices adopted by public companies in Hong Kong market.
As a result.
Going forward, we will no longer provide guidance for the coming quarters.
In stack, we would like to provide some recent colors of our business.
For the quarter to date, our total revenues was up by more than 80 per cent year on year.
Mainly driven by the growth in domestic accommodation and air ticket reservations.
International revenue was still under pressure.
Compared with the same period of 2019.
Domestic accommodation and air ticketing reservations were both up by more than 20 per cent quarter to date.
Also the fast recovery of domestic China.
Travel is gradually making up the loss of all of our business.
Simply our total hotel reservation have returned to pre COVID-19 level, while price is still under pressure.
We remain committed to deliver sustainable growth and create long term value for our shareholders.
With that operator, please open the line for questions.
Thank you.
You wish to ask a question. Please press star 1 on your telephone and wait for your name to be announced.
If you wish to cancel your request please press star 2.
If you're on a speakerphone please pick up the handset to ask your question.
We do ask that you. Please limit your questions to 1 per queue today and rejoin the queue. If you have for either question.
Your first question comes from Alex Chang with Morgan Stanley.
Yeah.
Thanks for management for taking my question Congrats.
Congrats on the very strong results and rebound in travel demand.
My question is regarding the resurgence of COVID-19 globally.
Travel international travel remains uncertain.
So how will trip dotcom prepare.
<unk> focus in this environment. Thank you very much.
Thanks for the question, we have full confidence in the complete resumption.
The national level relative.
Or do you think the promising recovery of travel in some countries and regions to be the widespread vaccination rollouts.
Across all markets, we're seeing domestic travel market rebounds.
And gradually makeup for lots of cross border trouble recent.
Recently.
Total hotel bookings.
Ah reached PS.
Pre COVID-19 level, while prices remain under pressure.
In Q1 on overseas hotel bookings by non Chinese customers.
<unk> Dot com platform.
Good day recovered to the pre pandemic level.
Our teams.
Are utilizing.
At this time.
Tuesday, enhance our fundamentals and price product service and user experience for all of us.
These users.
Is that.
We will be best positioned to capture the pent up travel demand when international travel recovers.
Thank you.
Your next question comes from Ronald Keung with Goldman Sachs.
Thank you James Jane Cindy and Michelle.
Following on that that recovery path, because you could management share just how we see the forward say few quarters and maybe into 2022.
Are we expecting that international recovery path, maybe if not quantitatively maybe qualitatively.
Net recovery path and how how would we plan on sales and marketing.
Refugees on all spending alongside that eventual international recovery path.
And are we thinking about domestic will shift or domestic.
Strength that we see now what she maintained while international will be incremental kind of recovering with the expectation. Thank you.
Hmm.
Thanks for your question, we look at our business in 3 segments. The first 1 is domestic travel. The second 1 is for the areas outside of China on the domestic travel within each respective countries on the third way is cross border travel so for.
First of all for domestic travel.
China, we have full confidence that our government has very effective control procedures to make sure our mainland China's economy will grow strongly and normally when the economy is growing strongly on travel market will outpace the GDP growth in that market.
And we will work very hard to serve our customers to capitalize on the strong momentum. So that's the first day within domestic travel for mainland China. The second thing is outside of China. We also have seen a strong recovery in each respective on markets we target.
Net so based on the numbers, we're looking at for the most recent months or these are the mesh travel are in their respective areas outside of mainland China have already day recovered to pre COVID-19 level. So we have a very strong confidence that oh.
Applying for whatever work in the mainland China will also be capitalized on.
After market, we're targeting net.
Suddenly is cross border travel.
That is a little bit it takes more coordination between nations, but we are encouraged by the development. After a vaccination I think for each government is pushing very hard to make sure the people with the each country are well protected so.
For what we have seen a U K and.
Europe and.
In the United States are moving very fast in a friend and also Asia. Most of the country have demonstrated their ability to control and also control and handle these kind of crisis quite well. So we are hopeful that Asia Europe.
Erica.
Gradually we'll be opening up and with more vaccination is taken hopefully the passport to indicate.
The passengers of inflammation, and therefore gradually we will be able to capitalize on the pent up demand for cross border transactions as well.
<unk>.
Your next question comes from Alex Yao with JP Morgan.
Thank you management for taking my question I was on a 2 photos with runoff question, but from a different angle.
So I think that ultimately could be moving.
Finance it could be the end of the shoot me.
That's true.
When we enter into the post COVID-19.
Stage on how do you think about that.
For more normalized gross rates in the next to come from of Yours.
1 on the new revenue opportunities, you're seeing post COVID-19.
As a result of perhaps for consumer behavior change on business a behavior change. Thank you.
Yeah, I think we're all very excited to wait for the path of the COVID-19 free.
From our search for itself on our sites that pent up demand is very strong.
We are confident eventually the scientists around the world will come up with very strong method.
Content this virus and government also through the past year.
Accumulated till October experience to make sure that going forward the virus lumpy well content and our team works very hard to accumulate our knowledge.
And experience to handle different situations.
Within our domestic travel there are also lots of opportunity our market share still is quite low it's in the teens in 2019, our market share is around 13%.
Still a lot here for us.
<unk> to market that we have not tapped into so.
So for.
For example, our content for then our strategy is a new area on the market to well grow quite nicely in the next 3 to 5 years and if we can't address and take about 3% a share 2 5% share that's quite significant already.
Secondly, we also saw the short haul.
On travel, which is serving as an alternative when people are are contained within their own borders and thirdly corporate travel as we discussed is growing very strongly traditionally it's just by the other.
But channels, but we owed to us a very good services to address the customers who need for travel from cities to cities and frequently on the road.
So with our strength in our hotel air and the other area.
Be able to help the customers who travel so frequently around China and so forth also the cross sell opportunity.
While wingstop platform represents a good opportunity to make sure our customers needs addressed very nicely rather than having our customers to switching to search all around with the website to find the right product, we owe to provide better services for them when we.
Use a wow.
Technology, and 1 stop shopping for that platform to provide the best for service for our customers and these new initiatives are mainly.
Centered around the domestic travel for China and in addition, I think the cross border travel inbound travel and for the customers around the World. We're also add another layer of the group.
And our team is working very hard with our global team just to make sure that our strength in the mainland China eventually will be duplicated in the global places. So we're excited for the future growth. Thank.
Thank you.
Your next question comes from Thomas Chong with Jefferies.
Hi, Good morning, Thanks management for taking my questions.
I have a question relating to the expense side.
Given that we have spent a lot of work to optimize other cost how should we think about the trend in expenses going forward. After COVID-19. Thank you.
Thank you Thomas.
Yeah, Thanks to our largely flexible cost and expenses that sounds for an efficient operating management.
And last year, we actually are further streamlines our operations across business lines.
In addition to certain adjustments related to COVID-19.
Our improvements on content and cross selling going forward will further help us to lift our.
Our marketing efficiency.
We expect in terms of the cost trend in the year 2021, we expect a comparatively modest increase in personnel related expenses and sales and marketing expenses are largely it is rational and expression, though and adjusted in accordance with our.
Business recovery, and we will continue to adopt and all I drove that strategy.
We.
For the mall, we believe our improvement on content and cross selling will help us improve our marketing efficiency in general.
But at the same time, we will also reserved certain budgets in the short term to development.
All other content ecosystem and to prepare for recovery and growth of the international market. Thank you. Thank you.
Your next question comes from James Lee with Mizuho.
Oh, great. Thanks for taking my questions. My question is regarding advertising opportunity I was hoping maybe Jane you always spoke about live streaming and star hub.
Also on very interesting.
And can we maybe get an early sense about understanding the friction that you're experiencing with advertiser when they tried to adopt the new content platform.
And how you plan to resolve it specifically and also maybe early learnings from consumers for any and then what do they like about your new content platform and 1 needs to improve and lastly, maybe over longer term can you talk about what kind of critical mass that you need in terms of users and engagement.
And that will be to ultimately improve monetization. Thanks, so much.
Sure for.
From a long term perspective.
Content and.
Content and also.
Okay.
And also advertisement market currently is about 90 billion market and by 2025. The market size is going to be is expected to be around 140% I wonder for tipped it in.
And our target is that if we work very hard to address about 3 to 5 per cent of the total market that can be quite significant for our topline and bottom line as well secondly are the strength of our platform is that the quality of our customers is very strong and their look.
For inspiration when they decide where to go.
Accumulate during the holiday season summer vacations, Chinese new year's et cetera, So when we post our content onto our platform. We have already seen day users doubled for.
That channel and also the stay on for the time spent in these channel also doubled and significantly in the channel. So that gives us a very strong indication that customer need for content.
And we will also offer a very customized on match between the customers what they are looking for to be suitable for their family.
For them for their interest.
Certainly with the strong customer interest.
Interest as well as fair.
Spending power.
Areas for hotels travel destination and attraction.
We do a very good analysis with all to all for the best alternative for customers to look at.
So that also is a strength for our platform we have seen very strong conversion.
On our platform when we post on the relative and very carefully analyzed.
Matching on for our customers. So these are the strength for on our platform and of course on this.
Got it.
On a system 1 months ago, the momentum is strong, but it takes a our team for our strong execution and Oh.
To make sure the product is suitable for both our customers and our partners, but we are confident we keep up.
With our strong execution will be we'll be able to offer the best product for both of our consumers as well as the partners.
Thank you.
Your next question comes from Joyce Ju with Bank of America.
Good morning, James Jane Cindy and Michelle Congrats on the very strong results this quarter and thanks for taking my questions. On my question is related to government a recent antitrust push.
<unk> seen kaposi sarcoma leaders recently being inspected and also some of them you don't pay the penalties antitrust day you know.
Movement.
So just wanted to ask like if we have been we had related like you know risk and if we have been in any communications with the regulators index perspective, given you know I think the antitrust you know look group at very beginning there were a couple you know areas all things.
Spectation like they actually include like a price discrimination like hinge on monopoly power off the marketplace at this price.
Is that how we actually avoid be into a situation like you know be a fine or like you know get patent penalty for it from this thank you.
Thank you.
We fully support our government for their efforts to create a healthy and a sustainable gross market. Our belief is that the market. If we can.
Create a market that is a healthy and sustainable.
We are the industrial will grow in a very healthy manner.
Secondly, our market share is quite small on steel are the market share for 2019 is around 13% there on the travel industry is faster growing E. We need.
Qualitate service provider to address our customers' needs. So we will work very hard with the government with our partners to make sure our customers demand is very well addressed thank you.
Your next question comes from Tien, who with Th capital.
Yeah.
Good morning management. Thanks for taking my question I have 2 quick questions on.
On the income statement just for the current travel so I saw on like a young you're 100% gross and it's really outstanding So I really want to want to understand what type of July for behind behind the hundreds from sense, you're on your grow and what could be the future growth.
So you know in this line at least for I'll look for that for the second 1 is for other business. So it is actually showing the young your positive returns. So can management give some color to tell us what par would be in the others and you know.
What's item within that you know the others are you know drive.
Driving force for this part of revenue to grow that to fast that's my 2 questions. Thank you.
Thank you.
Kim.
Ctrip is always the leader in the especially in the business travel space of course, the 100% a gross a day for.
We that is the lower comparatively low base of lost share because lost share. This first quarter of last year is to outbreak of the pandemic basically there is a very low traffic, especially for them.
Hi, Bose are therefore, we had a 100% gross and secondly, it's actually reflect the fact that once there is a pandemic or the or any emergencies.
Market leader.
Always a consolidate or half that are growing our market share very quickly are they also reflected in our high gross in that business travel, especially the corporate travel and the search results and Jane.
Our hotel business in the corporate travel group.
All very fast significantly.
Firstly, because we have a very competitive.
Competitive pricing all competitive product offering to serve our corporate travel needs at.
Secondly, we also successfully cross sell a hotel product from the air business from the air our cash.
Customers from on the corporate travel. These other 3 reasons why you see a very strong gross in the corporate travel and debt the second action that.
The other other basically is the reflect of the Ah Ah Ah market value adjustment for the available for sale investments.
On the first actually this basically reflect the brand trends debt after a market pick up for the first quarter our all.
All our investment are classified as available for sale they have to do we reevaluate.
Revaluations.
Quarterly basis, so compare with the last year fourth quarter last year or the market pricing gross significantly.
This is the reason why we had a 1 time gain on this category.
Your next question comes from Brian Gong with Citi.
Yeah.
Thanks management for taking my question congratulations on the solid results on a recovery so.
Was the strongest for domestic travel a medical management.
For women.
Orders by different segments.
Especially for upcoming summer break on that.
Gordon with National gauge Sun too.
Hmm, Yeah, the Golden week holiday is very strong.
We discussed the pent up demand.
We have to drive the gross AR as.
Previously discovered discussed the volume gross for the hotel is a more than it's a.
3 digits gross for year over year for containers 19, it's also grown more than 60% year over year for air ticket gross.
So 3 digits compared to the last year.
Also for the.
Next year, it's a for the for the 2019, it's more than slightly per cent LD of gross for.
For the Q2 number our tended to Cindy for highlights.
Yeah.
We will not provide quarterly.
Quarterly guidance anymore in a car in order to comply with the Hong Kong stock has changed regulations.
But we would.
Like to share some recent colors without investors for the quarter to date, our total revenue was up more than 80% year over year, driven by the strong domestic travel recoveries.
But at the same time the international revenues remain still remain on their precious so computer.
Okay 19, both our domestic hotel and air ticket reservations grew more than 20 per cent.
Compared to quarter to date.
That typically during the past labor day holiday, our total domestic reservation grew by more than on 270 per.
<unk> percent year over year and.
Per cent compared with 2019, all which domestic hotel and air reservations were up by more than 50 per cent and 30% respectfully.
With our 2019, the faster recovery of our domestic China travel with gradually and fully make up the loss of outbound business.
Recently, our total hotel reservations have returned to pre COVID-19 level.
But the price is still under some pressure.
<unk>.
Okay.
That does conclude our question and answer session I will now hand back to Michelle Qi for closing remarks.
Thank you. Thank you everyone for joining US today, you can find the transcript and webcast of today's call on Iraq.
So calm but look forward to speaking with you on our second quarter 2021 earnings call for you and have a good day. Thank you very much. Thank you. Thank you.
That does conclude our conference for today. Thank you for participating you may now disconnect.