OTA Releases Financial Reports Concurrently, Ctrip's Commission Rate is Only 1/3 of That of Foreign Platforms | Kejin · Major Events

Author｜Wang Hanyu

Editor｜Zheng Huaizhou

On February 25, Ctrip Group disclosed its unaudited financial results for the fourth quarter and the full year of 2024.

For the entire last year, Ctrip Group achieved a revenue of 53.3 billion yuan, with a year-on-year growth of 19.5%. The net profit attributable to the parent company was 17.1 billion yuan, with a year-on-year growth of 72.1%, and the adjusted net profit was 18.0 billion yuan, with a year-on-year growth of 89.6%. Among them, in the fourth quarter, Ctrip Group achieved a revenue of 12.7 billion yuan, with a year-on-year growth of 23.4%. The net profit attributable to the parent company was 2.2 billion yuan, with a year-on-year growth of 66.3%, and the adjusted net profit was 3.0 billion yuan, with a year-on-year growth of 13.6%.

Specifically, the company's international business performed outstandingly. The revenue growth rate of the international OTA platform remained at around 70% for the whole year, with year-on-year growth of 80%, 70%, 60%, and 70% in the first to fourth quarters respectively, and its proportion in the company's total revenue increased from 10% in the first quarter to 14% in the fourth quarter. In addition, the number of inbound tourism orders of Ctrip Group in 2024 also increased by 100% year-on-year.

This indicates that Ctrip has a closer connection with suppliers and tourists in the international market. On the other hand, the marketing investment generated from the international business also led to a slight year-on-year and quarter-on-quarter decline in its gross profit margin in the fourth quarter.

At the just-ended earnings conference, the management of Ctrip stated that the company will prioritize the expansion of overseas business in the short term. It can be seen that Ctrip Group will still increase its investment in outbound and international businesses in the future. However, a research report from Huatai Securities also pointed out that The rapid growth of Ctrip's international business is expected to open up a new growth curve for the company, and there will be a greater space for profit elasticity release after reaching a steady state in the long term.

Continuous Leading in GMV, Commission Rate Only 1/3

With continuous business investment, Ctrip Group's penetration rate in the international market has further increased, but its revenue structure is significantly different from that of foreign mainstream OTA platforms.

In February, several major foreign OTA giants such as Booking, Expedia, and Airbnb also successively released their fourth-quarter and full-year financial reports for 2024. Compared with these platforms, Ctrip has a leading overall transaction scale, reaching about 1.2 trillion yuan, similar to Booking, while the former's commission rate is only about 1/3 of that of foreign platforms.

Generally, the ratio obtained by dividing the total revenue of the platform by the total transaction volume can roughly reflect the comprehensive commission rate of the OTA platform.

According to the latest financial report data, Booking's total revenue in 2024 was 23.739 billion US dollars, and the transaction volume was 165.58 billion US dollars; Expedia's total revenue in 2024 was 13.691 billion US dollars, and the transaction volume was 110.921 billion US dollars; Airbnb's total revenue in 2024 was 11.102 billion US dollars, and the transaction volume was 81.8 billion US dollars. Based on this calculation, the comprehensive commission rates of the three platforms are 14.3%, 12.3%, and 13.6% respectively.

At the same time, Ctrip Group's transaction volume in 2024 was 1.2 trillion yuan, and its net revenue was 53.3 billion yuan, with a comprehensive commission rate of about 4.4%, which is only about 1/3 of that of foreign platforms.

Looking at a longer time frame, the commission rate of Ctrip Group and foreign OTA platforms has always been significantly different.

Based on the calculation of financial report data from 2019 to 2023, Booking's commission rates in previous years were 15.6%, 19.2%, 14.3%, 14.1%, and 14.2% respectively, Expedia's were 11.2%, 14.1%, 11.9%, 12.3%, and 12.3% respectively, and Airbnb's were 12.7%, 14.1%, 12.8, 13.3, and 13.5% respectively.

While Ctrip Group has maintained at around 4% for many years.

And its transaction volume in the past year is similar to that of Booking. This means that Merchants on the Ctrip platform can obtain an order volume similar to that on Booking with only 1/3 of the commission cost.

Regarding the reason why Ctrip's platform commission rate is significantly lower than that of foreign platforms, Liu Jiewu, a researcher at the Tourism Development Research Center of Shenzhen University, explained to 36Kr as follows: The commission rate of domestic OTA platforms such as Ctrip roughly follows the synchronous development of the overall commission level of the Internet industry. The gap in rates between domestic and foreign markets reflects the differences between the two markets at this stage.

Liu Jiewu believes that at this stage, the profit level of many industries in China is relatively low, so the cost allocated to each link of the industrial chain is also relatively low. Reflecting on the OTA platform, the service rate that suppliers can accept is relatively lower. He pointed out that this characteristic is not only present in the OTA platform, but also in other O2O industries such as food delivery.

For example, according to a report in "China Times", a spokesperson for Meituan once disclosed that the actual merchant commission rate of Meituan Food Delivery is 6%-8%. When JD.com began to test the water in the food delivery business in May last year, the merchant commission it disclosed was also set at 5%.

In contrast, the commission rates for merchants on US food delivery platforms GrubHub and DoorDash are divided into three grades: 15%, 25%, and 35%, with an additional 2.9% credit card processing fee. The commission rates of European platforms Just Eat and Deliveroo are between 20% and 25%, and the commission rates for merchants on Korean platforms are mostly between 30% and 40%.

Further exploring, a major factor for the relatively low profit level of many industries in the domestic market at this stage lies in consumers, especially the vast number of users of consumer Internet applications, who are still more price-sensitive - this can be seen from the fact that many Internet applications prefer to use methods such as discounts and subsidies to attract users during the early promotion stage, and the popularity of Pinduoduo is a case in point.

But on the other hand, Liu Jiewu also pointed out that the large user base in the domestic market and the large number of suppliers participating in the industrial chain also make it more conducive for OTA platforms to achieve a higher transaction scale.

Then, from the perspective of the company's profitability, will the lower commission rate drag down Ctrip's profit margin?

Comprehensively Deploying AI, Exchanging Low Commission Rate for High Efficiency

At least from the latest financial report results, the net profit of 17.1 billion yuan for the whole year makes 2024 the most profitable year for Ctrip Group in the past five years.

Unlike foreign local life service platforms that rely more on commission income, domestic platforms have a more diversified income structure including advertising and finance, and do not overly rely on the commission rate at the profit level. And although Ctrip's platform has a low commission rate, its labor cost is obviously lower than that of foreign platforms. At the same time, combined with the scale effect of a huge single market and the leading advantage, the profit margin is expected to continue to increase.

More importantly, the development of domestic AI technologies and the timely application of commercial platforms also provide the necessary conditions for companies like Ctrip to improve operational efficiency.

At this earnings conference, Liang Jianzhang, co-founder and chairman of the board of Ctrip Group, mentioned: "At Ctrip Group, we regard artificial intelligence innovation as one of the development priorities. Our artificial intelligence tools are designed to make travel more convenient and personalized. Starting from the travel planning stage, we inspire users through customized recommendations and exclusive offers."

A research report from CITIC Construction Investment shows that Ctrip's "Travel Hotspots" launched using AI is adjusted based on real-time hotspots to provide users with popular choices at the moment. "Route Planning" can help users automatically generate customized routes and daily overviews, reducing the average travel planning time by 40%. According to internal test data, this function improves the travel decision-making efficiency of users by 58%, driving a 12% increase in the conversion rate of related businesses.

At the same time, in terms of customer service, according to the data provided by Xiong Xing, the chief operating officer of Ctrip Group, about 80% of the consultation questions on the current Ctrip platform can be solved by AI, and the automation rate of after-sales service exceeds 70% - this allows Ctrip's customer service to invest manpower in more valuable links and provide more personalized services.

At the earnings conference, the management of Ctrip also stated that the company is currently focused on comprehensively deploying AI technology in business operations. In this regard, Huatai Securities stated in a research report that Ctrip uses AI with its huge real-time proprietary travel data for personalized travel recommendations, and at the same time deploys an end-to-end service model and an open platform strategy to provide competitive prices and high-quality products. It is optimistic about the long-term empowerment that AI brings to the company's business.

For Ctrip, the comprehensive deployment of AI is an effective means that has been verified to improve operational efficiency; for merchants on the platform, it can continue to maintain a business environment with a relatively low commission rate and an increasingly better experience - This is expected to increase the operating profits of various businesses in the tourism supply chain.

Back to the present, from the way and intensity of rewarding shareholders this year, it may be seen that Ctrip has confidence in its own performance. In 2025, Ctrip initiated a $400 million stock buyback and at the same time distributed $200 million in cash dividends. Previously, Ctrip mainly rewarded shareholders through buybacks.

After the release of the 2024 performance, several securities institutions including CITIC Construction Investment, Guotai Junan, and Galaxy Securities all maintained a "Buy", "Overweight" or "Recommend" rating for Ctrip Group. At the earnings conference, Liang Jianzhang said, "Looking forward to the future, we look forward to seizing new opportunities in the constantly changing tourism market. And we will continue to be committed to innovation and enhancing the tourist experience, and look forward to working with partners to create growth and success in the future."

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