Good morning, good afternoon, good evening, everyone. Welcome to today's conference call. Our chairperson today is Ms. Kylie Yeung. Kylie, please begin the call, and I'll be standing by for the question-and-answer session.
Thank you. Good morning and good evening, everyone. Welcome to Tongcheng Travel's 2022 Fourth Quarter and Annual 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. Ma Heping, our CFO, Mr. Julian Fan, and Ms. Joyce Li, VP and Head of Capital Markets. For today's call, our management team will provide a review of the company's performance for the fourth quarter. Hope will brief us on the achievements we accomplished in the past year. 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 this 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 relate 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 statement. 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, and good evening, everyone. Welcome to our Fourth Quarter and Annual Earnings Call. China's travel industry in the past three years has gone through tremendous disruptions, especially in the year of 2022, which turned out to be extremely difficult. Yeah, difficult and challenging as travel sentiment and demand was down to new lows due to the strictest ever travel restrictions imposed nationwide to fight against the highly transmissible Omicron. In the face of drastic fluctuations, our company showed great resilience and proactively sought new growth engines. We persistently pushed ahead with our strategies to penetrate lower tier cities and reinforced our market presence there. We continuously optimized our products and services to better serve our users' underlying needs.
We stepped up investment in branding to enhance our brand recognition. We also further tapped into the travel supply side to exert more influence in the travel industry. As such, we have risen bigger and stronger from the headwinds caused by COVID. Our user base has grown bigger. Our brand has built stronger presence in lower tier cities. More importantly, our core businesses such as accommodation and transportation ticketing have gained greater market share, especially in lower tier cities. In addition, our businesses has grown more diversified within the travel industry. Through acquisition, we have entered into hotel management business and package tour business. All this, we believe, will inject new vitality into our company and enable us to have deeper roots in the travel industry.
Entering 2023, travel sentiment in China is improving significantly, pent-up travel demand is being greatly released. Thanks to the COVID policy changes in early December 2022, that led to the relaxation of travel restrictions nationwide, laying ground for a strong rebound of China's travel industry in the Year of the Rabbit. During the past Chinese New Year holiday, we were delighted to see our businesses grow remarkably over 2019's level. Users' enthusiasm for travel has continued into the first quarter of 2023. Looking ahead, the road to recovery is definitely rosy, we were filled with faith that we will have a rewarding year in 2023. We will stand firm on our core strategy. We will further invest in users as well as in the supply end.
As to further reinforce our influence in the travel industry. We will always bear in mind our core corporate value, customers come first, and embrace changes and innovation to constantly provide users with supreme travel experience, as well as empowering the businesses of our partners. Last but not least, we will spare no efforts to fulfill our social responsibilities and contribute to a better society. With this, I will hand over the call to Joyce. She will share with you our business and operational highlights for the first quarter of 2022. Joyce, please go ahead.
Thank you, Hope. The fourth quarter of 2022 remained trying as Omicron continued to spread across the country, leading to a dip in travel willingness and demand. In early December, the sudden relaxation of travel restrictions nationwide caused extensive infections across the nation, which further weighed on travel willingness and demand. Nevertheless, we held on to our flexible operational strategy and proactively sought opportunities from the reopening. We again withstood the test and delivered a better than expected performance for the fourth quarter, repeatedly demonstrating the resilience and the preeminence of our business and our team. During the quarter under review, the disruptions caused by Omicron were so massive that both our MAUs and MPUs decreased, so efforts were made to keep interaction with users on our platform.
Our average MAUs for the quarter decreased year-over-year by 11.5% to 201.1 million, while our average MPUs declined year-over-year by 21.1% to 24.3 million. Our 12-month paying users also slightly decreased by 5.7% over 2021 to 187.5 million. Ending the frantic quarter, our accommodation business, which has established a solid presence in lower-tier cities, continued to show its resilience in the last quarter. We made every endeavor to seize opportunities arising from emerging demands from local and short-haul travel. During the quarter, we continued to explore the long-tail scenarios for hotel stays and moved precisely to grasp the niche demand, which to some extent added to recovery of the business.
Even under adverse market environment in the last quarter, our domestic room night has been fully recovered to 2019th level, with room night growth in the low-tier cities reaching around 10%. On the other hand, value-added product services maintained meaningful contribution to the business as consistent efforts were made to better serve users' needs with regard to their stays at hotels. Our transportation business, which has built concrete mode in the travel industry, remained under tremendous stress as nationwide mobility was reduced to a lower level due to prolonged travel restrictions in the first 2 months of the quarter. The quick arrival of the infection peak at ease of the travel ban in December. In spite of the draft fluctuations in the quarter, our air ticketing business saw reinforced market position in some advantageous regions, as well as elevated market share in some under-penetrated high-tier areas.
Continuous efforts were made to build a more diversified user mix for the business. Train ticketing business, we've stayed focused on optimizing operations for fixed users' convenience. Over the turbulent quarter, further efforts were made to make better use of our traffic through enhancing the algorithms and underlying supplies of our intelligent quotation system so as to provide users with more comprehensive travel solutions. Our bus ticketing business, we shift our priority from volume growth to monetization enhancement to strive for a decent revenue contribution in 2023. In the last quarter, we started to optimize the rollout and operation of our ticketing vending equipment across the country. More efforts were made to steering offline passengers to online booking, which is our first step to enhance monetization of the business. Delightfully, we've seen satisfying improvement month by month so far.
For the past few years, we've been proactively seeking new opportunities in China's travel industry and have been active in the hotel management sector. Through internal incubation and acquisitions, our hotel management business has made impressive progress in the past year. We've established a comprehensive portfolio of hotel brands ranging from mid tier to high stars, with beautiful prints in hundreds of cities across country. At the same time, by exporting our technology and managerial skills to help our franchise hotels run more efficiently. On the other hand, Tencent ecosystem, Weixin mini program in particular, remain as the most stable and effective channel for us as we consistently push ahead with cooperation with Tencent. During the quarter, we continued to launch Esports events by joining hands with tourist attractions and hotels.
In October, we for the first time sponsored a professional Esports game to have our brand wide exposed to the younger population. With this innovative event, we have established entertaining and effective interactions with the younger generation. Besides, our cooperation with handset vendors remain stable and mainly focus on membership benefit sharing as well as brand exposure, both online and offline. In addition, our offline user coalition initiative, especially the public transit of intercity bus and metro, continued to contribute meaningfully to our MTUs in the fourth quarter. Furthermore, we still firm our brand strategy and aim to build a distinct place in the mind of younger population. We closely follow the trend issue and deep dive into the psychology of the younger cohort. During the FIFA World Cup, we launched creative commercial featuring commercial scenes when watching games with stylized language.
Meanwhile, we kept investing in advertisement to have our brand consistently exposed among heavy users. During the quarter, we had our brand not only exposed in TV dramas, but also in movies. Additionally, our Black Whale membership program maintained fast growth momentum even under deep shadow of high volatility. Over the quarter, we've further enriched the core benefits while optimizing the operation of the program. As of the end of 2022, the cumulative number of Black Whale members approached 20 million, almost double the size of 2021. At the same time, the purchase frequency of the Black Whale members were nearly twice that of the general users. As always, we remain committed to empowering the travel industry with our profound internet expertise and customized technology solutions, aiming to build a highly resilient and efficient travel ecosystem.
Over the past years, we have established a strategic partnership with a handful of airports across China and have assisted them in digitalization, product development, and marketing activities. In the past quarter, we further expanded cooperation with airports and joined hands with another key airport group, Guizhou Airports Group. In addition, we have built a brand portfolio of hotel PMS to help enhance operational efficiency and create additional revenue for various hotels covering small and medium-sized chain hotels, individual hotels, and alternative accommodation. We value our users, and we spare no effort to provide them with a comfortable and smooth journey. Our intelligent Huixing system plays a key role in satisfying users' underlying needs. It provide users with customized and suitable travel solutions. Our self-service AI system has been applied to more customer service scenarios to further improve customer service efficiency and enhance customer satisfaction.
We periodically invite management and certain personnel to hear out customers at our customer service center, through which hundreds of products and workflows have been optimized. As a socially conscious enterprise, we are entirely aware of the social obligation and are determined to contribute to the travel industry as well as to society. In the depths of the COVID pandemic, we joined hands with dozens of local governments to distribute the digital coupons so as to help facilitate the recovery of the travel market as well as the local economies. To further invigorate the tourism industry, we launched a cultural heritage tourism initiative to build an innovation marketplace that integrates cultural heritage into tourism. With this successful experience, we aim to reinvigorate hundreds of tourism destinations through this initiative in the near future. On the other side, we care for our users.
We provided free end-to-end pickup and drop-off service for university and college students in several cities as soon as their winter break started, so to make sure they have safe and smooth trip home. We offered a preferential air ticket to thousands of graduates to facilitate, which is highly commended by the government. We value sustainability and endeavor to improve our ESG practice. In the past year, our MSCI ESG rating was upgraded from A to double A in recognition of the achievements we attained in the governance and the labor management. Looking forward, we will remain fully devoted to social activities that contribute to a better society, as well as improving our ESG performance and create more value for our stakeholders.
With that, I'll give the call to our CFO, Julian, who will share with you our detailed financial results for the fourth quarter and the year of 2022. Julian, please go ahead.
Thank you, Joyce. Good evening, everyone. The past quarter was unforgettable. The travel industry as well as our business hit the bottom because of the strictest ever travel restrictions in the first half of the quarter. Extensive infections across the country in the second half following the sudden turn of COVID policy in early December. Our business performance was still way ahead of the industry in the past quarter, mainly thanks to the demand from migrant workers and leisure travel, which were the cornerstone to support our performance. In the fourth quarter of 2022, we reported a net revenue of RMB 1.5 billion, representing an 18.8% year-over-year decrease from the same period of 2021. Although the environment and sentiment was highly volatile in the past quarter, we adhered to our flexible operational strategy while seeking opportunities.
On one hand, we strive to control costs as much as we can to maintain profitability. On the other hand, with no hesitation, we are proactively prepared for the upcoming Chinese New Year of 2023 and invested in marketing campaigns and advertisements in quarter four. Looking at the bottom line, we achieved a RMB 37 million adjusted net profit with 2.5% adjusted net margin. The temporary margin drop was mainly because of the revenue scaling down and the marketing preparation for Chinese New Year. Our accommodation reservation business remained resilient and achieved RMB 509 million for the fourth quarter of 2022, representing a 9% decrease from the same period of 2021. The decrease was mainly due to room night year-over-year decrease, which was, however, still far better than industry performance.
Transportation ticketing revenue for the fourth quarter of 2022 was RMB 756 million, representing a 30% decrease compared with the same period, 2021, resulting from the suspended long-haul travel in the past quarter. Other business for the fourth quarter of 2022 still kept a very strong growth momentum, as the revenue achieved RMB 235 million, representing a 12% increase from the same period of 2021, mainly benefiting from the strong sales of our Black Whale membership card. Gross margin in the fourth quarter of 2022 dropped to 70.1% from 74.6% year-over-year, mainly due to scaling down of revenue. Adjusted EBITDA achieved RMB 244 million with a 16.3% margin decrease from 22.8% year-over-year.
Adjusted net profit achieved RMB 37 million with 2.5% margin decrease from 13.6% year-over-year. As I mentioned above, the temporary margin drop was mainly due to revenue scaling down and marketing investment for Chinese New Year of 2023. The increased investment in marketing was a temporary ROI decrease in the fourth quarter, but have brought a greater reward in the first quarter of 2023. As mentioned above, in the past quarters, we strive to maintain profitability through cost control. Service development and administrative expenses in the fourth quarter of 2022 decreased by 7% from the same period of 2021.
Excluding share-based compensation charges, service development and administrative expenses in the total accounted for 31% of revenue in the fourth quarter, compared with 25.7% of revenue in the same period of 2021, and 21.4% of revenue in previous quarter. Selling and marketing expenses in the fourth quarter of 2022 decreased by 13% from the same period of 2021. Excluding share-based compensation charges, selling and marketing expenses accounted for 42.8% of revenue in the fourth quarter, compared with 39.4% of revenue in the same period of 2021, and 45.1% of revenue in previous quarter. As of December 31, 2022, the balance of cash equivalents, restricted cash and short-term investments was RMB 6.8 billion. Now, let's move to our results for the fiscal year 2022.
As Hope mentioned, the past year was extremely difficult and challenging as the travel sentiment and demand was dampened by COVID. We remained optimistic in the darkness and went through all the difficulties last year. In 2022, we further strengthened our operations within the Tencent ecosystem and expanded cooperation with Tencent at multi fronts. We continue to diversify our traffic sources and push it forward with user acquisition initiatives both online and offline. Through extensive and precise marketing campaigns, we enhanced our brand awareness among younger generations and further increased our market share in target regions. For the past three years under the shadow of the COVID, our traffic and users have significantly surpassed at the level of 2019. Our average MAUs for 2022 increased by 14% from 2019 to 234 million.
Our average MPUs for the year increased by 11% from 2019 to 30 million. Net revenue in 2022 achieved RMB 6.58 billion, representing a 12.6% decrease year-over-year or an 89% recovery to 2019 level. We held on to the flexible operations strategy during the year to further enhance our back-end and marketing efficiency. The main focus of the company in the past year was still market penetration and investing for the future amid the post-COVID backdrop. Though facing a challenging and volatile environment, our accommodation reservation revenue achieved RMB 2.4 billion in 2022, representing 0.2% increase compared with 2021, and 2.4% increase compared with 2019.
Our domestic accommodation room nights for the whole year of 2022 booked almost a 20% increase from 2019. During the past year, we continuously expanded marketing channels, including all entrants in Tencent ecosystem, location-based apps, short video platforms, and various offline scenarios. More importantly, our internal cross-sell initiatives also played a key role in diverting traffic from the transportation segment into accommodation. We deep delved into long-tail demand for hotel stays and launched various feature products such as Esports Hotels and Pet-themed Hotel. Meanwhile, efforts were also stepped up to diversify value-added products and services to provide pleasant stays for users, as well as developing marketing tools to help hotels have easier access to users on the platform.
Although ADR remained below 2019 levels due to the industry depression, the blended take rate surpassed the 2019 level and stayed high for the whole year, mainly due to our disciplined couponing policy and additional contribution from VAS revenue, which increased to more than 16% of total accommodation reservation revenue. Transportation ticketing revenue for 2022 was RMB 3.4 billion, representing a 24% decrease compared with the 2021, or a 25% drop from 2019. The decrease was mainly due to eroded demand for long-haul transportation as a result of COVID restriction policies. For short-haul travel, our bus ticketing and carpooling business maintained impressive growth during 2022 against the backdrop of vast turbulences, thanks to the rising demand for local and short-haul travel.
In terms of the bus ticketing business, efforts were stepped up to develop the value-added products and services so as to enhance the monetization capabilities of this business. In the following year, we will place more emphasis on the monetization and ARPU of the business. Moreover, as a one-stop-shop travel platform, we aim to cover all travel scenarios and provide users with seamless and superior experience. To further penetrate local and short-haul travel markets, we ramped up efforts in our carpooling business and introduced more carpooling service providers to our platform so as to better serve our users. In the past year, the volume of our carpooling business realized a spectacular increase compared with 2021.
Other business revenue for 2022 achieved the RMB 791 million, representing 18% increase compared with 2021, and the 53% increase compared with 2019. We achieved great progress in Black Whale membership program in the past year. As aforementioned by Joyce, in the past year, Black Whale card revenue achieved the RMB 169 million with 64% increase compared with 2021 and 344% increase compared with 2019. Advertisement revenue achieved the RMB 260 million with 12% increase compared with 2021 and 46% increase compared with 2019. In terms of profitability, our gross margin in 2022 slightly decreased to 72.6% compared with 74.9% in 2021, mainly due to revenue scaling down.
For the full year of 2022, Adjusted EBITDA achieved RMB 1.4 billion compared with RMB 1.9 billion in 2021. Adjusted EBITDA margin was 21.8% in 2022, decreased from 25.1% in 2021. Adjusted net profit achieved RMB 646 million in 2022 compared with RMB 1.3 billion in 2021. Adjusted net margin was at 9.8%, decreased from 17.2% in 2021. The net margin drop was due to revenue scaling down and increased investment in advertisement and marketing campaigns so as to strengthen user awareness for the long run and to further penetrate target users groups as well as target areas. Entering 2023, life was back to normal overnight.
The travel market is truly booming in quarter one with various demands being released, such as long-haul and short-haul leisure travel, business travel, staycation, and hometown visits by migrant workers and students. After three years of cultivation and preparation, we are now in golden position to capture the travel opportunities in every scenario and hence further gaining market share. The remarkable rebound in quarter one has again demonstrated that travel is an important and essential activity in our daily lives. No matter if it is for business, leisure, exploration, or family friends gathering. By standing firm on our strategic priorities and initiatives, we are quite confident that we will maintain industry-leading growth and profitability. We will continue to generate value for our users, suppliers, employees and shareholders, bearing an ultimate goal of making every travel smart, enjoyable. With that, operator, we are ready to take questions now. Thank you.
Thank you. Ladies and gentlemen, the question- and- answer session will now begins. If anyone wish to ask a question, please press star one on the telephone keypad. Just remind everyone, there's no more than 2 questions per time. Once again, if you wish to ask question, please press star one. Our first question is come from Brian with Citi. Brian, please go ahead.
Good evening management. Thanks for taking my questions. I have 2 questions. First is about our latest recovery trend. Today, you just mentioned recovery trend is quite strong. Can you share a little bit more details in, you know, the recovery trend in recent weeks, especially comparing to 2019 and 2022 levels? Also, can you share your view regard to our recovery for, you know, upcoming Qingming Festival, Labor Day, as well as full year 2023? The second question is about margin. Previously management mentioned that we probably will increase margin dollar this year along with the industry recovery in market share, right?
May I know what is our latest plan and how should we look at our margin trend for first quarter this year and full year 2023, as well as long term? Thank you.
Okay. Thank you, Brian, for your questions. In terms of, I think the first question is in terms of the latest market situation and our business performance trends in latest weeks. Actually, as mentioned in our prepared remarks, we have experienced a very strong recovery since this Chinese New Year holiday. The transportation ticketing business was especially good because of the strong demand for traveling to and from hometowns. For the whole industry, you know, the train ticket volume recovered to almost, I think 85% of 2019 level. Air ticket volume recovered to around 75% of 2019 level. That is the industry view. Still our performance, once again, outperformed the industry with several multiples.
For the train ticket volume, I think nearly fully recovered to 2019 level. The air ticket volume increased by over 30% when compared with 2019. That is our performance in January and February. After Chinese New Year holiday, actually people continued to demonstrate great enthusiasm to travel around, and we successfully capture the recovery opportunities in latest week. Our accommodation room nights in February grew even stronger and increased by more than 100% when compared with the same period in 2019, almost doubling 2019 level. Driven by various travel demands, such as migrant workers and students during and after Chinese New Year. Business travel, the long-haul and short-haul national travel vacations and also the exam groups.
We believe that travel demand will continue to be very strong in 2023. We can see that the market recovered significantly in a very short period of time once COVID control measures have been relaxed. Those once again have doubts about the recovery pace of Chinese travel industry have already been surprised by the fast pace of recovery the past few weeks. In terms of I think the upcoming quarter two and also the rest of the year's expectations, actually we're very optimistic about the future development of the Chinese travel industry and firmly believe that the growth of the industry is sustainable, just like what we observed in quarter one.
As a leading OTA in China, we have accumulated a huge number of users and extensive industry experience in the past, and is well-positioned to more aggressively capture future market opportunities. In terms of our confidence on the industry and our performance, I will share your 4 examples to support our confidence. One, you know, as for the supply end, as we have mentioned before, the improvement in infrastructure construction, such as new airport and new high-speed train system, will offer more convenience for travel and offer more opportunity for us, which will definitely stimulate the travel demand of people in domestic market. The second, in terms of the demand side, we think that the pandemic has changed people's travel habits and stimulates more diverse needs.
From our business performance, we observed that both long-haul and short-haul travel are growing rapidly. Demand from local or other cities are both very strong. Meanwhile, in the past three years, we have enriched our product line, such as attraction ticketing, bus ticketing, car hailing, city metro ticketing, alternative lodging, and various value-added products and services to fill the long tail needs. These will definitely improve the frequency and monetization in our platform. 3, in terms of our user base, as we have continued to develop the in-road services in the past three years, we see the very strong growth and great opportunities of this market, and we have successfully enlarged our user base in past three years. Our APU enjoyed noticeable growth even during the pandemic period.
Besides, we strive to cultivate the students group because we can see that these young generations have very noticeable consumption power and to the students show travel enthusiasm. The fourth example, we will further dive deeply into hotel chain industry and package tour industry, leveraging our technology advantages and industry knowledges that we would like to enhance the digitalization and efficiency of the industry, and meanwhile, offering superior service and products to our users and offer a more monetization opportunities to our platform. In terms of your second question is the margin. I think the margin outlook of the fiscal year 2023. Actually, in terms of the bottom line, we believe this year, the gross margin, the gross margin will be better than the situation before COVID or better than the 2019 level due to service automation and operation efficiencies improvement. While, as you mentioned, we will still invest at the sales marketing and advertisement in this year to capture more opportunities and market share post COVID. The net margin will rebound, of course, will rebound to a decent level, mainly due to scaling effect driven by the revenue growth and operational leverage. Okay. Thank you. That is what I provide the comments on question. Thank you.
Thank you.
Thank you. Once again, if anyone wish to ask a question, please press star 1 on the telephone keypad. Our next question is come from Alex Poon with Morgan Stanley. Alex, please go ahead.
Congrats management on a very strong results and outlook. My first question is regarding our cross-selling ratio. As we have expanded a lot our product lines, and the demand has come back a lot, how will we spend our sales and marketing expenses to drive a cross-selling ratio? Is there a target cross-selling ratio we have for the next one to two years? Thank you.
Thank you, Alex. During the past quarter, the cross-sell rate was impacted because we have mentioned a significant decline in the train and air ticketing volume and the rapid increase our bus ticketing volume has brought us significant new MPUs which have diluted the cross-selling rate. We should emphasize that cross-selling is one of our strategic priorities to enhance the frequency and ARPU of our users. In the future, we will continue to make more precise effort to market our hotel products and services with higher take rate to users from train and air ticketing bus business in order to better neutralize the future traffic and achieve the better monetization. We will also put more emphasis on cross-selling from short haul and local transportation business so as to enhance the monetization of our overall business and to seek better synergies.
We will also try to cross-sell from transportation business with a lower take rate, such as offline bus ticketing to transportation business with a higher take rate. I think with our continuous efforts, which as the cross-selling rate will continue to improve and the benefit of total revenue and monetization in the long run.
Yes, just like what Joyce mentioned, in this year, the monetization and also the ARPU improvement is what we emphasize the more, instead of the just the user volume increase in the past three years. Actually we will allocate more of our sales and marketing dollars into this area. In this year, we will continue to invest in various areas, as we did previously, but in general, we will more focus on improving user value, like what I mentioned, instead of striving for user growth, as we have already got a huge number of paying users, already above 200 million paying users for one year. I will give you more colors of how we allocate our sales marketing dollars this year.
We will first continue to invest in targeted promotion and enhance our capability to make accurate recommendations to users so as to enhance cross-selling from transportation business to accommodation business, from offline to online, just like Joyce mentioned, which will generate more revenue per order and better take rate for our overall business. Second, we will also try to cultivate more online users whom we previously gained from offline scenarios. You know, we advertise the offline user acquisition in past 3 years a lot of time. This year, we will try our more of efforts to cultivate more online behaviors for those offline users that we acquired in past years. Such as the hotel QR code scanning and smart bus ticketing machines.
We will optimize our sales marketing strategies by having promotions to motivate direct online purchase by these users. Third, I think we will also invest more promotions of our VS products and services which are suitable to our users and solve their problems during their travel journeys. For example, we will continue to promote the use of Huixing system, which provides intelligent travel solutions to our users, and at the same time, gives us an opportunity to monetize more. We also launched promotions to of our innovative products and services in various new scenarios so as to enhance value per users.
Four, we will further invest in our membership program, the Black Whale membership, by enriching the service and privileges providing to our users and enhance our membership system so as to improve their loyalty to our platform and boost our overall ARPU and purchase frequency. Of course, we will continue to acquire new valuable users as well. We'll also allocate some kind of a sales marketing dollar for this area. For example, for online, we will still invest in more promotions in targeted areas, in target areas and target groups and scenarios so as to acquire more paying users. We also continue to invest in Tencent and deepen our cooperation with various parties in Tencent ecosystem. We will also continue to explore new traffic channels, such as the content platform and location-based apps.
For example, the Gaode Map and Baidu Map, and also the short video platform, et cetera. At the same time, we'll continue to penetrate market with our offline user acquisition initiatives. This year we will allocate less money on this area, also including the smart ticketing equipment for bus and traction ticket, public transport business, commerce campaigns, to gain younger generation. Last but not least, we will also invest in brand advertisements so as to strengthen our brand image and awareness, as we think branding is a long-term investment which we need to do persistently to build up our own brand equity. Thank you. That is what we wanna share. Thank you, Alex.
Thank you. Just to remind again, if you wish to ask a question, please press star one on the telephone keypad. Our next question is come from Wei Xiong with UBS. Wei Xiong, please go ahead.
Sure. Hi, good evening, management. Thank you for taking my questions. Two questions from my side. First is I wanna follow up on the recovery trends that you guys mentioned. In addition to very robust release of pent-up demand that we've seen so far, if we dig into a little bit more details, could management maybe share more color on the recovery trends in the next few quarters if we look at, you know, different segment? For example, business travel versus leisure travel, long-haul trips versus short-haul trips, et cetera. How should we think about the different recovery pace and dynamics within these sub-sectors? Second, we've seen that it seems like the company has stepped up our efforts around travel agency businesses.
Just wanna hear management to talk more about the strategic rationale behind that, and what kind of financial implications that we might see for this year. Related to that, do we consider to maybe do more around outbound travel this year? Thank you.
Thank you, Wei. Thank you for your questions. For the first question, let me dig into more about the different user scenarios such as the different contributions by local or short-haul travel. You know, for our platform, we can see that both short-haul and long-haul travels recovered very well in the past three months. We can see that air tickets, mainly representing the long-haul travel and business travel, has already surpassed to 2019's level by over 40% in terms of volume in February. At the same time, bus ticketing and car hailing business, which represents short-haul travel, has also been experiencing expansion of growth when compared with 2019. Our accommodation room nights in January and February have increased very well when compared with same period in 2019, driven by the rise of travel demand, including long-haul and short-haul travel.
The growth trend of local hotel demands in the past three years has continued into the first two months of 2023. The local hotels now accounted for nearly 15% of our total hotel room nights, implying a significant increase for same period in 2019. We firmly believe that the COVID has changed the fundamental behavior of the travelers, especially the younger users, as they have experienced to enjoy the short-haul travels and staycations which can be more frequent and ad hoc, instead of only making the relatively long-haul trip once in a while. In addition, we have been more aggressively grasping the opportunities in different hotel booking scenarios in the past few years. For example, as Julie had mentioned, exam rooms and staycations during specific special days of the festivals.
On the other hand, with the resumption of the different activities such as exhibitions, cultural sports events, music festivals, and concerts. We have successfully captured the increasing accommodation demands from cross city across provincial travels. We believe that in the long term, both short haul and the long haul demand will continue to increase. As to the second question concerning our acquisition of the travel agency companies, actually, the reason that we have noticed that during the pandemic, we have been paying attention to business opportunities of the package tours business, which is affected significantly by the COVID. With the end of the pandemic in sight, we think that package tour business will gradually resume.
The two travel agency companies have rich experience in the industry and have established their own brand, supply chain, operational systems and teams, but they were harder hit by the pandemic. We think their operational costs can have been greatly reduced in the past three years, and we believe now is the best time to start investing in this business. Moreover, we also have been committed to strengthen our layout and supply chain of the tourism industry. I think the package tour business is an effective supplement and expansion to the company's existing online business. Through this position, we can not only strengthen a stronger position on supply side, but also reach our business and provide our users with more diversified products and service. Also these two travel agency companies had quite significant amounts of business from the outbound travel before COVID.
They have established resources in the international travel market. With these two acquisitions, we also could have accelerate our development of outbound travel business, which also has been mentioned. Before the COVID, the international business have accounted for around 5% of the revenue before COVID. We believe that the international travel industry needs some time to review supply and to hire back and train more staff to fulfill increasing market demand in near future. For us, in the past few years, we have already accumulated a huge user base of around 200 million Annual Paying Users. This will be the foundation of our international business in the future, as these users will also have outbound travel demand. We will also be benefited from the recovery of the outbound travel, although outbound travel may still need some time to be fully recovered.
We also have already established a relationship with different supply chains for international market, including various international airlines and different major international OTAs for accommodation business in the past few years. Recently, we are getting more proactively to establish business connections with different kinds of overseas TSPs. We will keep continue to explore and develop new products and service for our potential outbound travel users. As you mentioned, I think it's still early to tell the revenue and the profit contribution from the travel agency or package tour business, especially the acquisition of Beijing Tongcheng Tourism Investment Group has not been board commit confirmed. They will definitely extend our business to provide more products and service to our users and generate additional value to our company in the future. Thank you.
Very clear. Thank you, management.
Thank you. Our next question is come from Simon Cheung with Goldman Sachs. Simon, please go ahead.
Hi. Thanks for the presentation. I got 2 questions. Just wanted to follow up on the recovery pace. Obviously, January, February has been very strong. We've been hearing, you know, some weaknesses that we've seen so far in March. Can you share with us, you know, what you have seen? Also, one of your competitors, I think at the result call, mentioning that, you know, for the full year, they are generally seeing a bit of uncertainty in relation to the recovery pace toward the end of the year, particularly in the fourth quarter. I'm just wondering how you are thinking, maybe a 1 or 2 year, 1 or 2 quarter out in terms of the recovery pace?
Is that gonna be straight line, or do you expect, you know, some choppiness in between? That's the first question. The second question, on your point about monetizations, just wanted to get a better sense how would you quantify that monetization? Is that in the, in the format of, more revenue from the transportation, you know, segments, or is that coming from more active, paying users? Also on the marketing dollars, wondering whether you can also share with us, you know, maybe some target or anything, along that line. Thank you.
Thank you for the questions. First, the following, follow-up questions around the, about the latest, recovery trends, especially in March. Actually, you know, March is not a hot season compared with January and February and compared with April and May.
Actually, for the traveling industry, you know, the off season is the Chinese New Year Spring Festival and the short period holiday for Qingming, May Day and also the Labor Day and also the Dragon Boat and also the summer vacation. The March actually is not the hot season. Compared with the January and February actually, from month-to-month, the performance is slightly dropped. Well, what we see is, compare with the same period in 2019, we don't compare with the 2022 because, you know, the 2022 March, April and May is the bottom. Hit the bottom because of the travel restrictions for the Shanghai lockdown.
We don't compare with the March for last year. Compared with the 2019, still we see a over 30% growth compared with 2019. We think that is the still very strong recovery, strong booming for the traveling industry in March as well. Although it's slightly dropped compared with the January and February. Because, you know, the travel, just like what I mentioned, there's the hot season and low season for the traveling industry. Actually we don't compare month to month the performance. For this year, we compare with the performance in 2019.
We think the quarter two, quarter three, and quarter four, will have a very decent growth rate, compared with 2019. Just like what we've seen in quarter one. Because like what I mentioned, there's a lot of different scenarios for the new demand. For example, the short haul, the staycation, the migrant workers and student groups traveling, leisure traveling. Those scenarios actually is not that strong before COVID. That is the first question in terms of the recovery from March and also the following year. The second question in terms of the monetization. Actually, For this year, in terms of the monetization, we separate to 2, I think the process.
The one is to increase the frequency and the second increase the consumption for each frequency. First one, you know, before COVID, actually, for each paying users annually, the frequency rate is like 4.5-5 times. Each paying users in one year will purchase 4-5 times before COVID. Last year, you know, we have increased this number to 5.5-5.5 because we offered more and more product to our users. They usually they can only buy accommodation and also the transportation for the air and train. Nowadays they can buy car hailing, buy the attraction tickets and also the bus tickets as well.
frequency increased last year and this year, we are very confident that the frequency will continue to improve to a 5.5 or even 6 per paying users this year. The second is to stimulate the customer to buying more for one time because we nowadays offered a lot of that, the value-added service and product. For each time, when they book an accommodation, book a hotel and book a transportation, for example, the air and train, they will also book other VAS as well. That is the second process that will improve the monetization. That is what we wanna share. Thank you.
Great. Thank you, a lot . Thank you.
Thank you. Sorry, Kylie, we don't have any questions at this point of time.
Okay, 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.
Thank you. Thank you, everyone. The conference call has been concluded. Thank you for your participation.