Good day, thank you for standing by. Welcome to Tongcheng Travel 2023 Q1 results announcement. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star one one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the call over to your first speaker today, Ms. Kylie Yeung, Investor Relations Director. Thank you. Please go ahead.
Thank you. Good evening and good morning, everyone. Welcome to Tongcheng Travel 2023 Q1 results conference call. I'm Kylie Yeung, Investor Relations Director of the company. Joining us today on the conference call are our Executive Director and CEO, Mr. Hope Ma, our CFO, Mr. Julian Zhang, and our VP and Head of Capital Markets, Ms. Joyce Lee. For today's call, our management team will provide a review of the company's performance in the Q1 . Hope will share with us our overall strategy. Joyce will discuss our business and operational highlights, and then Julian will address the details of financial performance accordingly. We'll take your questions during the Q&A session that follows. As always, our presentation contains forward-looking statements.
Such statements are based on management's current expectations and current market operating conditions and relates to events that involve known or unknown risks, uncertainties and other factors which may cause the company's actual results, performance or achievements to differ from those in the forward-looking statements. This presentation also contains some unaudited non-IFRS financial measures. They should be considered in addition to, but not as a substitute for, measures of the company's financial performance prepared in accordance with IFRS. For a detailed discussion of non-IFRS measures, please refer to our disclosure documents in the IR section of our website. Let me introduce our CEO, Hope. Hope, please go ahead.
Thank you, Kylie. Good evening, everyone. Welcome to our earnings call for the Q1 of 2023. 2023 marks a fresh new start of China's travel industry. For the past quarter, we were thrilled to see the biggest rebound and growth in three years, with various travel demand being tremendously released, with the industry recovery in full swing. We acted swiftly and precisely to seize every user demand and our enhanced market presence and influence. Over the quarter, both our MAUs and MPUs suggested another historic highest. Our revenue and business volume witnessed stunning growth from last year's low trough. Turning to the Q2 , there is no sign of cool down in travel into the scene. The demand for travel continues to show traveling momentum.
In the past Labor Day holiday, both our accommodation and transportation businesses saw its new highest in volumes with room nights sold almost three times the size of that in 2019. We firmly believe the blooming trend of our business will continue into the rest of this year. Given that travel demand on our platform has been resilient and more diversified over the past three years. In my previous speech in March, I full rightly expressed my confidence for 2023. Two months later, today, I'd say my confidence for the year has turned into conviction in view of our of the impressive progress we've made so far. For the year ahead, we will continuously push forward with our goal to have our core business further expanded with in-industry leading growth.
While patiently building our second growth engine to lay foundation for long-term sustainable growth. At the same time, we will continue to broaden our footprint along the travel industry by consistent investment and partnership so as to establish deeper roots in the industry. With that, I will hand over the call to Joyce for more details of our operational highlights in the Q1 . Joyce, please.
Thank you, Hope. We had a marvelous start into the year of 2023, with our business hitting record highs in the Q1 as travel sentiment and demand have been in full swing after three years of restrictions. It is a high in peak season for travel. We took initiative and seized every opportunity to expand our footprint in the travel industry.
As in the past three years, we took the lead in industry recovery in the quarter, continuously demonstrating our excellence in business strategy and execution. For our accommodation business, we have established stronger presence in lower-tier cities through consistent investments over the past three years. The business showed a great vitality over the last quarter and it recorded historical highs, both in revenue and the volume, with room nights sold registering an extraordinary growth of more than 130% when comparing with 2019. Over the exhilarating period, we continued to penetrate low-tier cities and peripheral areas of higher tier cities, while persistently capturing opportunities of various occasions for hotel stays as users' demand has become more diverse after pandemic. Tactically, we have placed much more importance on cross-sell this year to drive fast growth of the business.
Additional efforts were built up in the last quarter to market our hotel products and services to users from the transportation business. As a result, our 15-day cross-selling rate for the quarter climbed to 10%. Value-added products and services surrounding hotel booking and stays maintain a meaningful contribution to the business as we consistently offer accommodation vouchers to make users stay at the hotels more convenient and comfort. Transportation business is a strategic pillar of the company, and it takes up large share of both revenue and profits.
Over the past three years, we have solidified our market position in this industry and have gained shares by tapping into under-penetrated markets. For the past quarter, the business achieved new peaks, both in revenue and volume. For the air ticketing business, we continue to optimize user mix by bringing more college students as well as frequent travelers.
Most thrilling, we restart our international business upon China's border reopening. We increased efforts to seek cooperation with more overseas air ticketing suppliers, as well as launching marquee activities to reconnect with the users. For the train ticketing business, its volume fully recovered to 2019 level and increased substantially from last year's low. Aiming at a robust recovery, we stay true to our faith and remain focused on improving users' travel experience by providing more suitable and accessible travel solutions. By including more travel occasions and more transportation means, our Huixing system continued to play a crucial role in satisfying users' demands. Our bus ticketing business has made a gradual progress in enhancing its monetization. During the quarter, we centered on adjusting the geographical coverage of vending equipment to improve efficiency, while streamlining online transaction process to enhance purchase rate.
As such, its monetization rate has improved quarter- by- quarter. Furthermore, we aim to broaden our footprints along the travel industry and further enhance our influence. Through incubation acquisition, we have built a comprehensive portfolio of hotel brands, ranging from media to high stars. As of the end of March, we have had nearly 900 hotels in operation cross-country. On the other side, we have also tapped into digital business by acquisition of travel agency companies, which will also serve as stepping stone for us to expand our international business. Turning to our user side, we seize on the booming momentum and increase efforts to interact with the users at multiple channels, so as to further diversify our traffic resources and expanding our user base. Among all our online channels, Tencent ecosystem remained a strategic pillar.
Under the backdrop of substantial recovery, we have made bolder efforts to dig into its various scenarios and then reach out to more users. We initiated cooperation with the Tencent Docs to have engaging interaction with the younger users. We also extend our service in Huixing Search, covering hotel booking, air, train, and bus ticketing, as well as tourist attraction ticketing to provide the users with easier and convenient access. Besides, we maintain a cooperation with the handset vendors and the location-based apps to have a wider reach to users.
On top of that, our offline acquisition initiatives, in particular, the public transit, remain an effective vehicle for us to grow user base and further penetrate low-tier cities, and it contribute to about 15% to our MPUs in the Q1 . As such, both our average MAUs and MPUs set another new height for the past quarter.
Our MAUs for the quarter increased by 13.9% year-over-year to 286.1 million. While our MPUs displayed a much faster growth of 13.6% and it rose to 41.4 million. Our paying ratio also increased to 14.5%. To our satisfaction, our 12-month rolling paying users as of the end of March-Expanded to 201 million from 188 million as of the end of 2022, demonstrating our excellent operational capability. Since our brand upgrade in early 2020, we've been making consistent efforts to increase the mindshare of our brand among younger generations.
In the past quarter, we rolled out an experiential marketing campaign named Spring Awakening, through which we joined hands with six tourism bureaus and released a collection of NFTs themed with city flowers so as to enhance our brand exposure. In April, we worked with Guilin Tourism Bureau and co-launched Dream Marketplace in Guilin, which is featured with innovative experience such as intangible cultural heritages, outdoor sports, and handicrafts in an effort to expand the ultimate boundary of travel experience along with the younger tourists. Besides, we were the first OT in China that integrate esports into our user engagement plan, and esports events have served a key role in building effective communication with our target users. Over the last quarter, we continued to sponsor a professional esports game and had our brand high exposure among younger cohorts.
With such efforts, we aim to build and form an engaging brand personality targeting younger population. This year, we placed more emphasis on user value rather than new user acquisition. Over the last period, we increased efforts in cross-selling strategy, which has been an effective means to enhance user value. We upgraded our membership program and established new user hierarchy based on their consumption patterns and contribution to our platform, so as to further delve into their potential values. We continue to push ahead with our Black Whale membership program and further enrich benefits surrounding daily consumption occasions as part of efforts to improve user output. As of end of March, the cumulative number of Black Whale members exceeded 25 million and generated impressive growth in terms of revenue.
We value our users and are devoted to providing them with seamless and comfortable travel experience by embracing new technologies. To further enhance efficiency and user satisfaction, we, together with business partners, took the initiative over the quarter to explore the possibility of GPT application in our customer service with an aim to create more accurate, coherent, and convenient intelligent customer service. We are also investigating the feasibility of AIGC application in other areas of our operations such as product development and content. Moreover, we consistently consolidated more travel scenarios into our intelligent Huixing system to provide users with more suitable travel solutions. As always, we're committed to empowering the travel industry through our internet expertise and technologies, aiming to build a highly resilient and efficient travel ecosystem.
In the last quarter, we persistently pushed ahead with our strategy to build deeper bonds with airports and infrastructure cooperation with the Yichang Sanxia Airport. The two of us will work together to direct Yichang Sanxia Airport as a hub airport in southwest Hubei province by leveraging our big data capability and the local tourism resources. Besides, we helped regional airports in Inner Mongolia increase their throughput by designing transit products for them. In addition, we built a comprehensive portfolio of hotel PMS brands to help enhance operational efficiency and create additional revenue for hotels covering small and immediate chain hotels, individual hotels, as well as alternative accommodation. As always, we're fully aware of the importance of substantial development and are determined to contribute to the travel industry as well as society.
To help facilitate rural revitalization, we initiate a program named Tongcheng Thousand Villages in February to help village across China build substantial tourism models and promote green economy by exporting talents, technology, capital, and platform. On top of this, we were selected by the China Consumers Association as the top 10 excellent cases of corporate initiatives in terms of customers' experience and fair treatment on account of our initiatives such as exclusive customer service for the hearing impaired and the Tongcheng Rest Stop for outdoor workers, which displayed our care for customers as well as for society.
Looking ahead, we will remain committed to the activities that contribute to the travel industry and the society. I'll stop here and give the call to our CFO, Julian. He will share with you our detailed financial results for the Q1 . Julian, please go ahead.
Thank you, Joyce. Good evening, everyone. Over the past quarter, since the shackles of travel restrictions measures were broken, we have witnessed a hopeful strike in China's travel industry with pent-up demand for travel greatly unleashed. We once again outperformed the industry, mainly thanks to our capability to capture diverse demands from students to business travelers, from local and short-haul trips to long-haul family tours. Which significantly fueled our core business performances and propelled us to achieve steady growth. In the Q1 of 2023, we attained historic heights for both quarterly top line and bottom line. We reported net revenue of RMB 2.59 billion, representing a 51% year-over-year increase from the same period of 2022, or a 45% year-over-year increase from the same period of 2019.
We are proactively prepare for the Chinese New Year and the May Day holiday of 2023 and invested in marketing campaigns and advertisement to seize the golden opportunity that this glorious period of travel resurgence has presented to us. Thanks to our effective marketing strategies and highly efficient operation, we have achieved substantial improvements in our margin as well. Our adjusted net profit reached RMB 504 million with 19.5% net margin, compared with the 2.5% net margin in Q4 , 2022, and 14.3% net margin in Q1 , 2022.
Our accommodation reservation business registered vigorous growth and achieved RMB 834 million for the Q1 of 2023, representing a 53.6% increase from the same period in 2022, or a 70.5% increase from the same period in 2019. Our room nights registered more than 60% year-over-year growth or 130% growth versus 2019, mainly attributable to our ability to seize the opportunity amid the encouraging revival of China's travel market and the accurate online and offline marketing strategies. We are continuously explore the long tail demands for hotel stays such as exam rooms, as well as booking related to exhibitions, sports events, and concerts, so as to capture every niche market.
During the past quarter, we also ramped up our efforts in air and train cross-sell execution and online promotions to bring more users to our accommodation segment, as well as improving the repurchase rates and ARPUs . In the Q1 of 2023, ADR rose compared with 2022, mainly attributable to the exploding demand in the hotel industry. The blended take rate decreased compared with 2022, mainly because we distributed more coupons to capture user demand. Transportation ticketing revenue for the Q1 of 2023 was RMB 1.4 billion, representing a 35.9% increase compared with the same period of 2022, or a 9.8% increase compared with the same period of 2019. We achieved a remarkable feat in the past quarter.
Our revenue surpassed our pre-COVID level, mainly attributable to the record-breaking ticketing volume as a result of a robust travel demand for hometown visits and back to work during and after the Chinese New Year. We are also focused on the continuous advertisement advancement of our VAS offerings. For our air ticketing business, we further tapped into under-penetrated markets and achieved more than 35% growth in terms of the volume when compared with 2019 level. Our train ticketing volume also increased significantly compared with the same period last year and has already reached the 2019 level. We attained steady progress in enhancing the monetization of our bus ticketing business, mainly driven by the more precise geographical placement of our smart ticketing equipment and the optimization of our transactions process.
We also expanded the scenario coverage of our car hailing service to cater the rising demand for local and short-haul travel. Other business, once again, achieved excellent growth. The revenue achieved RMB 369 million in the Q1 , representing a growth of 134.1% year-over-year or a 945.9% increase from 2019 level. Mainly driven by the encouraging growth of our Black Whale membership program, as well as the excellent performance in advertisement, the PMS business and PMC business. We are confident that these business will continue to augment the company's growth in the future.
In terms of the profitability, our gross margin was 75.0% for the Q1 of 2023, increased from 72.5% for the same period in 2022, and 70.1% for the previous quarter. The persistent enhancement of gross margin was mainly driven by our streamlined operations, intelligent customer service capability, and revenue mix shift in the preceding quarters. In the Q1 of 2023, our adjusted EBITDA achieved RMB 732 million with 28.3% margin, improved from 25.5% year-over-year and 16.3% quarter-over-quarter.
Adjusted net profits achieved RMB 504 million, with margin improved to 19.5% from 14.3% in Q1 2022, and 2.5% in the previous quarter. The increase in revenue led to significant improvement in our adjusted net margin after the pandemic, as we have already optimized the cost structure over the last few years. Service development and administrative expenses in the Q1 of 2023 increased by 11.7% from the same period of 2022. Excluding share-based compensation charges, service development and administrative expenses in total accounting for 20.3% of revenue in the Q1 , compared with 26.8% of revenue in the same period of 2022, and 31.0% of revenue in previous quarter.
Selling and marketing expenses in the Q1 of 2023 increased by 51.7% from the same period of 2022. Excluding share-based compensation charges, selling and marketing expenses accounting for 37.0% of the revenue in the Q1 , compared with 36.5% of revenue in the same period of 2022, and 42.8% of revenue in the previous quarter. As of March 31, 2023, the status of cash equivalents restricted cash and short-term investment was RMB 6.9 billion. China's travel market has exhibited robust growth and has exceeded the pre-pandemic level. In April and May, we continued to witness the full unleashing of travel enthusiasm, with various travel demands being released.
The past May Day holiday witnessed the booming of the travel market, with people flocking to tourist attractions across the nation. According to official government data, the number of domestic tourists during the holiday registered significant growth year-over-year, and even surpassed the 2019 level. Our business once again outshined the market. Our hotel room nights registers more than 100% growth compared with the 2019 level, and our air ticketing volume grew by more than 30% compared with the 2019 level. We maintain optimistic and are very confident in accomplishing remarkable results again. After three years cultivation and accumulation, we have secured a supreme position to exploit travel opportunities in every scenario and thereby reinforce and expand our market shares.
The significant rebound since the beginning of this year has once again demonstrated the necessity of travel activities, no matter for business, leisure or family friends gathering. We remain very confident that our strategic priorities and initiatives will enable us to lead industry's growth with admirable profitability. We aspire to make travel a smart and joyful experience while creating more value for society and our stakeholders, including our users, suppliers, employees and shareholders. With that, operator, we are ready to take questions now. Thank you.
Thank you. As a reminder, to ask a question, you need to press star one one on your telephone. Please limit your questions to two questions at each time. One moment for the first question. First question comes from the line of Alex Poon from Morgan Stanley. Please go ahead.
Congratulations management on super strong results and the travel outlook. My question is related to the competition landscape. Because of a very, very strong demand, are we seeing the price war subsidies couponing coming back from our competitors? A related question is, our sales and marketing expenses, because of a very, very strong revenue growth, would we still stick to the 40% revenue guidance? Because of very strong revenue, we would see leverage and translate into higher margin for rest of the year? Thank you very much.
Thank you, Alex, for your question. I will take the first one, and Julian will address the second question. The first is about the competition. Actually from our observation, as the market rebounded, we've seen many players in the market have gradually increased the couponing level in certain markets, especially, everyone has been keeping so low, due to the COVID last year. We think that the market competition is still very healthy. We also believe that the market competition will remain healthy in the near term because there are still huge opportunities, but only a few major OTAs in the travel market. Our market positioning and user base are clearly differentiated. We have not observed any new entrants to the market that could pose a competitive threat to the major OTAs in China.
We think that it's not necessary to have fierce price war. Additionally, we will ensure that our products and services remain competitive in the market by utilizing our flexible cost structure, light operational model and dynamic pricing strategies. , with our strategy to first penetrate low-tier cities and our efforts to made in the past few years, we have already established a so strong presence and a solid competitive advantage in the low-tier cities, which are still having relatively low online penetration with hotel booking and bus ticketing, et cetera. We'll be more aggressive to develop and gain market share with an aim to be the leading travel brand in localities.
With our cost-effective traffic sources, light operational model, and strong execution capability, we are well-positioned to capture the recovery opportunities from all kinds of travel demand, including long-haul and short-haul leisure travel, business travel, vacations, and the hometown visits by the migrant workers and students.
For the sales marketing dollar and bottom line guidance for next quarter and for the rest of the year, before I provide more color on that, I would like to explain more on the quarter 1's bottom line and cost structure as well. As you can see that we are delighted to see that the Q1 bottom line exceeded our expectation. The net margin of 19.5% in the past quarter representing a level comparable to that of the 2019 level. GP margin improved to 75%, and adjusted EBITDA margin improved to 28%, mainly driven by the operational leverage caused by increase in business scale.
Our service development and G&A spending of the revenue decreased compared with 2019 and also 2021's level. Of course, 2022 was not a good reference due to huge impact by COVID in the whole year. While sales marketing spending increased when compared with 2019 as we invested more to aggressively capture the market share for the past three years and also to capture new business opportunities. It's slightly optimized from 2021's level, mainly driven by our accurate investment and ROI improvement. In the following quarters, actually we believe the operational leverage will continuously benefit our net margin because our scale is still rocket up. Revenue scale still rocket up in the next quarter and the rest of the year.
Meanwhile, sales marketing investment may be controlled at around 40% level for Tongcheng branding investment, domestic market penetration and international business development. Still, we would like to tightly control the ROI at a satisfied level and nicely balance the top-line growth and profitability. In terms of the how we spend our sales marketing dollars, I would provide more colors. This year our strategic priority is to enhance our user value rather than solely pursuing user volume growth that we have mentioned a lot of times. As we have already got a substantial base of our paying users, nowadays we have accumulated 400 million paying users in our history and also 200 million for a year.
As we mentioned, we would like to invest in more promotion on our existing users and drive improvements in frequency and ARPU this year. We will persist in investing in target promotions and improving our ability to provide precise recommendations to our existing users, thereby enhancing cross-selling from our transportation business to accommodation business. This should lead to higher revenue per order and better take rate for our overall businesses. We aim to further engage with users who were previously acquired from offline scenario, such as those we acquired from the hotel front door and also the bus ticketing equipment. To achieve this, we plan to optimize our sales marketing strategies by offering targeted promotions that motivate these users to make direct online purchases.
We also continue to invest in promoting the app's products and services that are tailored to our users' travel needs. For instance, we continue to encourage the use of our Huixing system, which offers intelligent travel solutions to our users while generating revenue for us as well. We will also launch new promotions for our innovative products and services in different scenarios and enhance user value. Hope that is helpful for you, for your questions. Thank you.
Thank you for the questions. Our next question comes from the line of Brian Gong from Citi. Please go ahead.
Thanks management. Congratulations on very solid results. I have two questions. First, can management share a little bit more about our performance in April and May respectively, especially after Labor Day, how do we see the travel demand? Does it go back to a normalized level with seasonality, or it become even weaker after the pent-up demand released during the Labor Day? Second question is, as Julian mentioned, Labor Day industry traffic and revenue performed pretty well, but average spending per traveler actually was lower than pre-pandemic level, probably like still soft consumption power. Want to know management's view on the impact from this on our platform and have we seen similar trends for our users on our platform. Thank you.
Thank you, Brent. First I would like to give you some color on the April and May, especially for the several weeks after Labor Day. How would the performance look like? In the past Labor Day holidays, as we can see that the industry has experienced very strong recovery, with industry traffic, travel traffic reached around 280 million, representing a 71% year-over-year growth, or nearly 20% growth when compared with 2019 level. That is the industry level, which significantly improved from 89% in Chinese New Year this year. As mentioned in our prepared remarks, our business performance again, outpaced the industry recovery very far.
After the Labor Day holidays, people have continued to exhibit a great enthusiasm for travel. Of course, the absolute performance in the mid-May dropped compared with Labor Day due to seasonality, but the growth momentum was even stronger compared with both same period in 2022 and 2019. For example, many people go for staycation on 20th of May, another Chinese Valentine's Day holiday, to celebrations. The total room nights sold on 19th and 20th May on our platform increased drastically by over 120% and 250% when compared with the last year and 2019 respectively, even stronger than our Labor Day behavior. It is also very encouraging that the room nights sold on 20th May this year hit historical top 4.
Just a weekend hit the historical top four for single day's performance for our room night sold. That is the how was the latest market situation after the Labor Day. In terms of the behavior change and the impact to the our performance, I think Joyce will give you more colors on that.
In terms of the consumption power you mentioned, as what we can see, the travel demand in China has remained strong since Chinese New Year. This trend has continued throughout the Q1 and up to now, as Julian has mentioned. We think that the Chinese travel industry has demonstrated a remarkable rebound over the past few months. Even the ADR of hotel rooms and air tickets price surged significantly. People's enthusiasm for travel are still extremely strong, as we all can notice. This gives us very strong confidence in the vitality of the Chinese travel industry, especially in low-tier cities market. As we noticed from the user side, maybe some of our users in low-tier cities are not making very luxury travels, but they prefer relatively affordable travels. We believe this isn't too much impact on their desire to travel.
The Chinese government has demonstrated a strong commitment to support the travel industry. It has also been actively promoting the domestic tourism as a means of economic development, which will help to drive growth in the industry, as we also can see from the recent cases. We still stand firm on the upward trend of China's travel industry in the long run, and we'll continue to strengthen our core competitive edges regarding our execution capability, product capability, and brand influence for our long-term sustainable growth. Thank you.
Thank you. That's where I hop off.
Thank you for the question. One moment for the next question. Next up, we have the line from Leo Yu from CLSA. Please go ahead.
Hi. Good evening, management, and congratulations on the strong results. Two questions from my side. First, a follow-up. Could you please share more on the user behavior change you observed after reopening? For example, the travel frequency and the format of traveling, and how would that contribute to a sustainable long-term growth and demand, for example, in the rest of this year and the year beyond. The second question is that I noticed the other revenues had a stellar growth in 1Q, driven by value-added services. What are our edges in providing the value-added services to travel industry? Do you think that the triple digit growth in Q1 to continue in the upcoming quarters? Thank you.
Thank you, Leo. The question concerning the user behavior is a very important and interesting question for us. As we mentioned before, we can see that both short-haul and the long-haul travel have been recovered remarkably well in the past few months. From our data, our accommodation room night in 1Q increased over 103% when compared with same period in 2019, as we mentioned. It's driven by various travel demands, including long-haul and short-haul travel. We can see that the growing trend of local hotel demand continuing in 2Q to down 23%. The local hotel now accounted for nearly 15% our total hotel room night, implying a significant increase from around 30% from same period, 2019.
What do we think is that the pandemic has fundamentally changed the behavior and the consumption pattern of travelers, especially the younger users. Now, the younger users are very interested in the shorter, more ad hoc, and frequent trips, which contribute significantly to the short haul and staycation demand. On the other hand, we have been more aggressively grasping the opportunities in different hotel booking scenarios in the past few years. For example, exam rooms and staycations during special dates or festivals. That's why also we can achieve so great performance in the special holidays we mentioned before. Additionally, we have also placed more emphasis on capturing the increasing accommodation demand related to different large scale activities such as exhibitions, cultural sports events, music festivals and concerts, which the occasion and scenarios usually constitute to the offline user scenarios before.
Thus we believe that both short haul and the long haul demand will continue to increase.
Yeah, in terms of the other revenues, actually the other revenue has already becomes a very significant contribution to our revenues. , back to 2019, the other revenue just take like 2% of our total revenue. Nowadays it has already take 14% out of our total revenue. We are very confident that the contribution or the portion will increase in next quarter and the rest of the year. Inside other revenues, I think I can separate to two parts. There's two very important parts in our other revenue. The one is a Black Whale membership card, and the other is the business side services, including the advertisement, our PMS, our hotel management, and also TMC business.
For the Black Whale membership card, as we mentioned, the accumulated number of the Black Whale member cards grew rapidly, very rapidly and it further increased to more than 25 million by the end of March 2023. The ARPU and average number of order of these Black Whale members are around 1.5 to 2 times of those for general members. The Black Whale membership card has been a highly effective tool for increasing our average revenue per user and providing benefits and premium services to our loyal customers. In the past quarter, the Black Whale membership card doubled when compared with quarter one 2022.
Actually there's still a lot of potential space to develop because considering our sizable user base, we are very confident in the substantial growth and the considerable growth potential of Black Whale membership. We have also enhanced the membership privileges and also cooperated with more partners to better cater to our users need and increase their engagement in our loyalty program. Also for the business side services, just like what I mentioned, the advertisement PMS, TMC and hotel management, I think that is in a very early stage, and the revenue contribution will increase in the future for sure. For advertisement business, we can leverage on our huge traffic and extensive user base to help our merchants to reach out their target customers.
For the PMS business, we use advanced technology and innovation to assist the individual and small chain hotels in their daily operations, inventory management, revenue management and marketing, et cetera. This business has generated stable income for our company and strengthened our relationships with the suppliers. For the hotel management business, actually we have just completed all the acquisitions in the past year and see great potential and synergies with our existing business. For sure, we will continue to explore this business in the rest of the year, especially advertisement, hotel PMS and hotel management business. We are also very confident that these business will make a further contribution to the growth of the company in the coming quarters. Thank you for the question.
The questions.
Thank you. That's very helpful.
In the interest of time, we'll now take the last question. The last question comes from the line of Thomas Chong from Jefferies. Please proceed.
Hi. Good evening. Thanks management for taking my questions and congratulations on a very strong set of results. My question is about our group tour strategies. Can management comment about our strategies in the next couple of years after doing the recent acquisitions? On the other hand, how should we think about the use of cash in coming years? Are we going to explore more opportunities in outbound travel or even in the international travel side? Thank you.
Thank you Thomas for your questions. I think I can address the question concerning our international travel business. , during the Labor Day holidays, the international flight volume for the industry recovered to 40% of 2019 level. The recovery of international business outperformed the industry significantly. Our international hotel booking sees the 2019 levels and international air ticketing booking recovered to 2019 levels. While the demand for the outbound travel is robust, we believe that international travel industry needs some time to rebuild its supply and by hiring and training more staff to meet the growing market demand. Currently, there is a significant shortage of labor and supply in overseas travel market, which is limiting the availability of travel products and services. Adversely affecting the quality of service.
In addition, there's a rising hotel ADRs and air ticketing prices may also damp the travelers' desire to make outbound travel plans. , before COVID, the international business contributed approximately 5% of our revenue. Over the past few years, we have established a significant user base around 200 million annual paying users, which will form the cornerstone of our international business. As these users will also have outbound travel demand in the future. The potential, I think, has been proven by our performance in the Labor Day holidays. To prepare for international business development, we are now focusing on establishing the relationship with different supply chains for international market, including different major international OTAs for accommodation business and a variety of international airlines the past few years. We're also establishing more business connections with different kinds of CTAs.
We'll continue to explore and develop new product services for our potential outbound travel users. We'll also launch promotions of international products to capture the recovery opportunities, especially now for our user base, a lot of them are younger generations. In 2023, we will put more effort in developing international air ticketing and hotel business as well as package tour business.
In terms of the use of cash and also our strategy in the rest of the year. First of all, the use of cash. We think the most of parts that we use the cash is on the sales marketing dollar, but actually that is the operational level because all the sales marketing dollar we spend will drive a hyper-growth in the revenue, and it take, like, 37%-40% as we measured a lot of times. That is our sales marketing level.
In terms of the other potential business, merger and acquisition and also our potential space of revenue growth, we may keep an eye on the M&A for the package tour business and also some opportunities in the international development, international business development in the rest of the year. For the long-term strategy or the rest of the year, the strategy, I think, the strategy is not changed as a leading OTA in China for us. We have already accumulated extensive industry experience and a vast user base. This places us in a advanced roles position to capture future market opportunities more aggressively.
First of all, in the past three years, we have successfully captured new demands in COVID period, such as short haul leisure travel and business travel, staycation and local consumption, et cetera, which keep a very strong growth momentum after COVID as well, just like what you see for our quarter one performance. Thus, we have further expanded the market share and strengthened the market position of our accommodation and transportation ticketing business. These mature business will continue to be the main growth driver of our companies in the future.
Meanwhile, we have enriched our product lines to fulfill a wider range of travel needs or the long-tail needs, including the attraction tickets, bus ticketing, car hailing, city metro ticketing, that is the short haul transportation, and also the alternative lodging and various value-added products and services. These improvements will help enhance the purchase frequency and monetization of our platform. In terms of the users, we have enlarged our user base successfully with APU reached 201 million in the past quarter. Additionally, we have been cultivating the younger generations as we have substantial travel enthusiasm and significant consumption power. Our large user base will support the future growth of the company as well.
I think lastly, we aim to enhance the digitalization and efficiency of the industry, while providing superior service and products to our users, leveraging our technology advantages, industry knowledge to huge user base. Our B2B service, just like what I mentioned in the previous questions and products are fruitful and start to contribute very important portions to the revenue and profit. For example, advertisement business, PMS, CMC, hotel chain business, like what I mentioned in the previous question, which have already contributed around 15% of our total revenue. They're still in a very early stage and have ample room to growth.
Meanwhile, since this year, we have decided to start the exploration and the development of the package tour business and international travel business so as to establish the more future growth drivers. That, may be the M&A opportunities that we would pursue. Thank you for the questions.
Thank you for the questions. I would now like to hand the conference back to the management team for closing remarks.
Thank you. We're closing the call now. If you wish to check out our presentation and other financial information, please visit the IR section of our company website. Thank you, and see you next quarter.
This concludes today's conference call. Thank you for participating. You may now disconnect.