Summary of Conference Call Records Industry Overview: Travel and Hospitality Sector Key Points - **Market Dynamics**: The travel and hospitality sector is experiencing demand resilience, with a notable shift in channels and brand iterations. Ctrip's stock has been affected by the slowdown in outbound travel growth and increased overseas investments, while Tongcheng has performed well due to low valuations and favorable policies [1][4]. - **Impact of Competition**: JD's entry into the travel and hospitality sector has limited impact on Ctrip but may cause a 10% decline in Tongcheng's performance due to price-sensitive users opting for platforms with higher subsidies [5][16]. - **Performance Trends**: Ctrip's performance in Q2 may be influenced by lower-than-expected overseas investments and geopolitical disturbances, but strong summer travel demand is expected to benefit OTA platforms [6][8]. Financial Insights - **Ctrip's Financial Performance**: Ctrip's outbound travel growth has decreased from 50-60% last year to 15-20% this year, with a corresponding decline in profit margins due to lower ticket prices and increased overseas investments [3][6]. - **Hotel Industry Recovery**: The hotel industry showed improvement in Q2, particularly during the May Day holiday, although June saw a slight decline compared to May. The overall hotel performance is expected to improve in the summer due to stable supply growth [7][8]. Company-Specific Insights Ctrip - **Market Position**: Ctrip has a strong advantage in high-end exclusive inventory, which mitigates the impact of JD's entry into the market [5]. - **Future Outlook**: The company is expected to benefit from increased booking volumes during the summer, with potential for upward movement in stock prices if high-frequency data improves [6][12]. Tongcheng - **Market Strategy**: Tongcheng is focusing on integrating exclusive travel resources and price subsidies to expand its market share, particularly in the mid-to-high-end hotel segment [3][14]. Yaduo - **Growth and Expansion**: Yaduo is experiencing rapid expansion with a store growth rate of 25-30%. The retail business is performing well, with plans to launch new products in the second half of the year [10][11]. - **Valuation and Market Position**: Yaduo's valuation is around 20 times earnings, with a growth rate of 25-30%, indicating a favorable cost-performance ratio [11]. Industry Challenges and Opportunities Supply Chain and Market Dynamics - **Supply Expansion Challenges**: The hotel industry faces challenges related to supply expansion, with a potential turning point in the next 6-12 months as investment returns for franchisees lengthen, affecting signing speeds [9][21]. - **Market Segmentation**: High-end hotels are focusing on renovations in high-tier cities, while lower-tier cities are expanding rapidly, indicating a significant growth potential in the mid-range and economy segments [20][21]. Competitive Landscape - **Key Competitive Factors**: The competitive landscape in the hotel online travel market is driven by resource integration and fulfillment capabilities. OTA platforms are focusing on consolidating hotel resources to provide more choices for consumers [13][18]. - **Market Share Trends**: Recent trends show a stable increase in market share for leading companies, with high-end brands like Yaduo and international brands experiencing slight growth [19]. Conclusion The travel and hospitality sector is navigating a complex landscape characterized by competitive pressures, changing consumer preferences, and evolving market dynamics. Companies like Ctrip, Tongcheng, and Yaduo are adapting their strategies to leverage growth opportunities while addressing challenges related to supply and market competition. The upcoming months will be critical for assessing the recovery trajectory of the industry, particularly in light of summer travel demand and potential shifts in consumer behavior.

Core Viewpoint - JD.com has officially announced its entry into the travel and accommodation sector, intensifying competition with Ctrip, the leading player in China's online travel agency (OTA) market [1][2]. Group 1: JD.com's Strategy - JD.com has initiated a series of measures to support its travel business, including partnerships with over 30,000 large enterprises and more than 8 million small and medium-sized enterprises, offering hotel merchants a "JD Hotel PLUS Membership Plan" with up to three years of zero commission [1]. - The company has launched a "Life Travel" section on its app, featuring categories such as flights, hotels, tickets, and vacation packages, emphasizing a "no bundling" sales approach for flight tickets [9]. Group 2: Ctrip's Market Position - Ctrip reported a revenue of 53.294 billion yuan for 2024, a year-on-year increase of 19.73%, and a net profit of 17.067 billion yuan, up 72.08%, maintaining a significant lead in both revenue scale and market share [3]. - Ctrip has a history of successfully countering competitors by addressing their weaknesses, such as locking in high-end service customers and controlling inventory, which has solidified its dominant position in the market [8][10]. Group 3: Competitive Landscape - The competition between JD.com and Ctrip is expected to be fierce, as JD.com lacks the deep experience in the OTA space that Ctrip has accumulated over the years, particularly in complex pricing algorithms and customer service processes [6][17]. - Ctrip's strong market position is attributed to its effective business model, technological innovations, and precise market targeting, which have allowed it to maintain profitability and expand its user base [12][13][14]. Group 4: Market Trends - The OTA market in China is currently dominated by three major players: Ctrip, Meituan, and Fliggy, each establishing a stable market position, making it challenging for new entrants like JD.com to disrupt the existing balance [17]. - Ctrip has capitalized on policy benefits, particularly in international business orders, with a significant increase in inbound bookings, reflecting a 100% year-on-year growth in the first quarter [15].

Core Viewpoint - The hotel industry is buzzing about JD's announcement of "up to 3 years with zero commission" for hotel listings, but the practicality and long-term implications of this strategy are questioned [1][4][16]. Group 1: Market Context - As of the end of 2024, there are approximately 370,300 hotels in China, with a chain rate exceeding 45%, indicating that many hotels have established supply chains that may be more efficient than JD's [6][7]. - Leading hotel brands not only have strong supply chains but also robust franchise systems to maintain control over their resources [8]. Group 2: Competitive Landscape - The hotel industry is characterized by a gradual adjustment of commission rates, with platforms like Meituan and Ctrip having established their market positions over time [19][21]. - JD's entry into the hotel sector is compared to its previous experience in the food delivery market, where it initially offered zero commission but faced challenges in maintaining profitability [27][30]. Group 3: Strategic Challenges - The hotel business requires building direct connections with hotels, inventory distribution systems, and pricing strategies, which is more complex than the logistics of food delivery [48]. - JD's historical attempts to enter the OTA market, such as investing in Tuniu, have not been successful, raising concerns about its current strategy [43][46]. Group 4: Potential Opportunities - There is potential for JD to succeed in the hotel sector, but it will require sustained effort, patience, and a focus on building relationships with hotels rather than relying solely on promotional tactics [55][66]. - The concept of "JD Hotel PLUS Membership" could create an ecosystem that integrates member benefits, points redemption, and cross-category recommendations, which may differentiate JD from existing OTA players [69]. Group 5: Long-term Perspective - The OTA market is not conducive to quick wins; it favors long-term strategies and consistent efforts to build a network of partnerships with hotels [72][74]. - JD must focus on becoming "JD's OTA," leveraging its strengths in supply chain management to carve out a unique position in the hotel industry [68].