I have to admit that TikTok is very good at fighting. The attack on e-commerce during the epidemic caused Alibaba to decline for two years; the attack on local life in the past two years caused Meituan’s market value (last year) to evaporate by half. The hotel and travel sector, which entered the market in the second half of last year, has also achieved good results. According to official disclosures: In 2023, the number of Douyin hotel and travel merchants increased by nearly 7 times year-on-year, and the payment GMV increased by more than 300 times year-on-year. Among them, the payment GMV of hotel and travel live broadcasts increased by more than 200 times year-on-year. It seems that Ctrip and other companies are about to have their cake and eat it too. But these old players don't seem to be "nervous". For example, in the 2023Q3 performance exchange, Ctrip's management calmly stated: So far, the competition landscape in the Chinese domestic market has been generally stable. I think OTAs and content platforms have completely different core capabilities. After reviewing the relevant information, we found that the reason for the "carelessness" may be that users "passionately placed orders" on Douyin for a cheap piece of clothing or a cup of 9.9 coffee; When traveling, even if you watch a half-hour short video or live broadcast, you may not be able to order all the products (the transaction chain includes travel - tourist attractions - food, and there are economies of scale ), and you can easily become a trap for OTA traffic diversion. Of course, some people would say that Douyin can create a dedicated first-level collection entrance for hotels and travel, just like it has invested in e-commerce. But the problem is that the fattest piece of meat in the hotel and tourism sector - high-star hotels with high-end style, and Douyin, which pursues low prices and quick monetization, may not be the same kind of people. 1. Douyin can make a destination popular, but it can’t buy a travel packageFrom last year to this year, Douyin is everywhere with cultural and tourism "shows". On Harbin’s Central Street, the director of the Hegang Culture and Tourism Bureau was grilling skewers with his hands flying; among the beautiful mountains and waters of Zhangjiajie, the director of the Hunan Culture and Tourism Bureau was dancing “Subject Three” with straw on his back; in the ten thousand mu of mandarin orange forests in Wuming, the “director of the Guangxi Culture and Tourism Bureau” was shouting “orange” at the top of his lungs… Statistics show that from January 8 to 14 alone, 26 provincial-level cultural and tourism department accounts posted a total of more than 1,300 videos on Douyin. The increasing number of cultural and tourism activities in various places is inseparable from the "fueling" of Douyin. In March last year, after the noise about Zibo barbecue "going viral" on Douyin, the following data was left behind: In the first quarter of 2023, Zibo's total retail sales increased by 8.3% year-on-year, 2.5% higher than the national growth rate; 21 of the 38 major industry categories achieved growth in added value, among which the accommodation and catering industry grew by as much as 10.2%. Such an industry-driving effect not only makes local governments "envious", but also opens a window for Douyin: by creating popular destinations, it influences consumers' travel decisions and drives the entire hotel and tourism business to "take off" . After all, the rise of Meituan's hotel and travel business has confirmed a similar route: Meituan entered the market with scenic spot tickets, and by directly recommending nearby hotels when searching for tickets to favorite scenic spots, it leveraged the hotel and travel sector. Based on this, when local cultural and tourism industries reveal the need for publicity, Douyin often actively cooperates and goes with the flow. Take Harbin as an example. According to official statements, before the arrival of the ice and snow season, the Heilongjiang government began to cooperate with Internet celebrities, big Vs and other "cultural and tourism recommendation officers" to carry out marketing and promotion on the Internet. For example, at the end of November, a group of bloggers including B Tai, the blogger who made Zibo popular with his anti-counterfeiting videos, began to intensively publish guides and reviews about Harbin. More and more travel experts are visiting, and Douyin's traffic follows closely behind, continuing to build momentum. Third-party data shows that from November 24, 2023 to January 10, 2024, there were more than 150 hot search topics related to Harbin on the Douyin platform. With the overwhelming coverage of "How Harbin pampers Little Potato in all aspects", Harbin ushered in "huge wealth": during the New Year's Day period, it received a total of 3.0479 million tourists and realized a total tourism revenue of 5.914 billion yuan. It seems that TikTok also got what it wanted. The relevant departments have paid for these hot searches and hype, and they are often very generous . Take Jilin as an example. In 2022, the special fund for tourism industry development is 180 million yuan, one of the goals of which is to enhance the influence and popularity of Jilin's tourism brand. The hotel and travel business, which is expected to be "promoted", is also remarkable. In December 2023, Douyin Harbin's hotel and travel orders increased by 144 times year-on-year. But such growth is certainly gratifying when viewed vertically, but not so pleasing when compared horizontally. It can be seen that during this year's Spring Festival, Ctrip's Harbin tourism growth rate on the first day was 244%; the year-on-year growth rate of Harbin orders on other platforms also exceeded 2 times. In other words, the hotel and tourism market, which was stimulated by the massive traffic output of Douyin, was subsequently "reaped the benefits" by OTA platforms. However, Douyin had to swallow this "silent loss". Unlike "after watching a short video and wanting to eat hotpot, you can buy a coupon in a group and drive there to eat immediately", when going on a trip, "the right time, the right place, and the right people" are all essential. It can be seen that in December, when Harbin was "hot", only some wealthy and free "golden potatoes" could go to the Ice and Snow World to "dance". The working people who were also attracted by the attraction could not buy tickets and fly there immediately no matter how excited they were. And when these "little potatoes" finally have a long vacation and go to cash in, they are more likely to choose to place orders on OTA rather than TikTok. According to Hotel Home data, Harbin received an average of 1 million visitors per day during the New Year's Day holiday. However, Harbin only has about 130,000 hotel rooms, which is obviously in short supply. Even Northeastern aunties began to work in three shifts to scrub baths, which is related to the fact that bath centers have taken over some of the accommodation needs. During such a peak season, the hotels themselves have no worries about sales. High-end hotels such as Marriott Harbin JW Hotel were fully booked many times during the New Year's Day holiday; during the same period, Tujia's homestay report also showed that more than 90% of Harbin's homestays were fully booked. At this time, the room resources can be put on the OTA channel and sold at a higher price. As shown in the figure below, due to the shortage of supply, the price of ordinary hotels near Central Street was sold at more than 1,000 yuan per night on December 30, which is two or three times the usual price. On Douyin, however, group-buying coupons are still more than 100 yuan. Given the huge disparity in "making money", many hotel merchants who expect to "make a living for three years" are not very enthusiastic about Douyin. A random sampling of the area around Hagia Sophia showed that none of the luxury hotels priced above 500 had any products listed on Douyin; many mid- to high-end hotels priced between 300 and 500 were also not listed on Douyin; and for economy hotels priced below 300, most of the products listed on Douyin were group-buying voucher products, which could not be booked at popular times such as Fridays and Saturdays. There are few products on the platform, let alone promotion. As a result, it is difficult for consumers to see the hotel information that is "fed" on Douyin, and the categories that can be actively searched are also limited. In comparison, if you open any OTA platform, you will find all kinds of hotels, and many of them are promotional product combinations such as "flight + hotel" and "scenery + hotel", but you can book everything with one click, which is convenient and cost-saving. In this case, it is self-evident what choice consumers will make. It seems that Douyin has taken great pains to create popular destinations, and has taken on some of the cultural and tourism advertising fees, and has made wedding dresses for OTAs in terms of the "hotel and travel transactions". Douyin is unwilling to accept this. Recently, its hotel and travel related person in charge said: "Douyin is starting to build its product group capabilities, promoting the integrated operation capabilities of destinations, and improving users' 'one-stop ordering' purchasing experience." 2. Douyin will not pursue the hotel and travel industry if it fails to capture high-star hotelsOn Douyin, you can stay at Home Inn or Hanting for a week for 1,000 yuan, but you can’t book a room at Marriott or Hilton. It can be seen that in the TOP10 list of Douyin group-buying accommodation sales in December last year, economy hotels such as Home Inn and Hanting accounted for 8, the remaining 2 were mid- to high-end types, and there was no trace of high-end hotels. When searching for high-star hotels on the platform, you won’t find calendar rooms, and even group accommodation packages are rare. Instead, there are all kinds of internet-famous buffets. This is not good news for TikTok. After all, the transportation and scenic spots in the hotel and travel industry have always been used only to "attract customers." An OTA industry insider revealed: "The commission for each air ticket is about 11 yuan, but our labor cost is about 27 yuan. We regard it as an entry point for traffic, and we lose money if we lose money." The situation is similar for scenic spots: "For the top scenic spots that can help OTAs bring in traffic, they are basically free to enter." Hotels are the real "cash cows". Ctrip, which is good at selling hotel rooms, has a much higher gross profit margin than Tongcheng, which mainly sells train and air tickets. High-star hotels are a must-win for OTA platforms. According to industry sources, the profit from selling one night at Carlton Hotel is equivalent to 20 nights at Home Inn. Douyin is also well aware of this. An expert memorandum last year showed that Douyin increased the commission rate for inns and homestays from 3.5% to 6%, while the commission rate for hotels continued to maintain a low level of 4.5%. In addition to charging less commission, at a time when the slogan is "lose fat and gain weight", Douyin has also released a lot of recruitment needs for high-star hotel BDs. However, "serving" high-star hotels well does not just mean giving concessions and providing traffic, but also requires offering chips that interest the other party. Marriott once had a honeymoon period with Ctrip, but after a few years it switched to Fliggy. One of the main reasons was that Fliggy could provide it with more membership resources: members of a certain level on platforms such as Taobao and Fliggy can directly apply to become Marriott gold or silver card members. In fact, not only Marriott, but also high-star hotels have tacitly listed the construction of membership systems as a top priority in recent years, and have placed emphasis on "developing direct sales channels." In order to increase the attractiveness of their own memberships, InterContinental, Hyatt, Hilton and Marriott have even stipulated in China that high-card (or platinum card or above) members who make reservations through third parties will not have hotel points and will not enjoy VIP benefits such as lounge access, double breakfast, and upgrades. The reason for this "differential treatment" is that the hotel investment cycle is long and the profit growth is slow, especially for high-star hotels. Data shows that from 2010 to the end of 2018, the return on investment of five-star hotels in China was between 0.3% and 4%. This means that based on the optimal return on investment of 4%, a high-star hotel will take at least 25 years to pay back. Therefore, high-star hotels want to hold customers in their own hands to improve customer loyalty and seek higher brand value. Take Marriott as an example. In recent years, the proportion of OTA distribution channels has remained at around 11%, far below the industry average of around 50%. For OTA platforms, if they want to obtain the inventory of high-star hotels, they have to help them discover potential high-quality customers. For example, Ctrip is able to occupy the leading position in the high-star hotel market because it started its business travel business early and connected its travel reservation system with the company's internal OA, expense control and financial reimbursement systems, thus firmly binding the business travel customers of large companies. In order to serve the sponsors of high-star hotels well, Ctrip has more than 10,000 employees in its customer service center, almost catching up with the number of people in product development, and it costs hundreds of millions of yuan to pay salaries every quarter. On the contrary, Meituan has been unable to capture high-star hotels for a long time because there is a mismatch between the users cultivated by local group buying and the needs of hotels. Back to the current Douyin, slogans such as "9.9 for the whole place" have been deeply rooted in people's hearts. Many users come for the low prices, and they are obviously not the target customers of high-star hotels. What's more, the traffic of Douyin is unstable. If a lot of guests come at one time, it will undoubtedly squeeze out the hotel's own member accommodation quotas, which is something that "high-end" high-star hotels cannot tolerate. To take a step back, Douyin itself may not want to fight a long battle with high-star hotels: to stick to high-star hotels means investing heavily like Ctrip, but the revenue brought may not necessarily exceed that of other businesses. As shown in the figure below, the marketing expense rate of hotels is generally only in the single digits, while it is common for clothing and beauty brands to exceed 30%; with its business not yet mature, Douyin cannot rashly increase its commission rate, and its revenue is destined to be limited. In this way, the monetization efficiency may be higher by diverting traffic to other sectors such as e-commerce. If it fails to take over high-star hotels, the meat that Douyin can get in the hotel and tourism industry will need to be questioned. After all, although mass hotels sell well, their capacity to accommodate guests has a limit. If there is no shortage of guests during the peak season, all it can get is a small piece of the pie during the off-season. For Douyin, which is committed to making the most of every drop of traffic, such ROI is obviously not attractive enough. 3. SummaryThe hotel and travel industry is difficult to penetrate, not because Douyin is not working hard, but because the barriers to entry for the business itself are high. In the end, the competition in tourism services is actually a "supply chain war". Platforms that can provide users with one-stop services and after-sales guarantees are more likely to be selected. If the hotel business wants to take off, it needs to create premium space for picky high-star hotels. No matter which one it is, it is a business of "bending down to pick up coins". Douyin will not let it go, but it will not invest too much in it. Author: Zhang Ranran, He Jinyi, Hei Yinke, Editor: Fu Xiaoling, Cao Binling; Data support: Insight Data Research Institute Source: Inside and Outside the Table (ID: excel-ers), Insight Data Research Institute. |
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