Thank you. Good morning and good evening, everyone. Welcome to Tongcheng Travel's 2021 first quarter results conference call. I'm Kylie Yeung, Investor Relations Director of the company. Joining us today on the conference call are Mr. Heping Ma, Executive Director and CEO, Mr. Julian Fan, CFO, 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 in the first quarter. Heping Ma will walk us through the company's business performance for the past quarter. Joyce Li will discuss our operational highlights, and then Julian Fan will address the details of financial performance accordingly. We'll take your questions during the Q&A session as 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 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. Now, let me introduce our CEO, Heping. Heping, please go ahead.
Thanks, Kylie. Good evening, everyone, and welcome to our first quarter earnings call. The first half of last quarter was quiet, but the surging of COVID-19 cases in mainland China again hit the travel industry, and all the market players were inevitably impacted. However, travel demand, such as delayed hometown visits, business travel, and leisure travel, started to pick up from March. We moved fast and acutely seized the recovery opportunities by riding on our strong operational capability and further enhanced efficiency. As a result, we continued to outperform the industry in the past quarter. Moreover, the recent two holidays, the Qingming Festival and Labor Day, have shown remarkable bounce in travel demand with all our business segments leading the industry growth, which added to our confidence for the year ahead.
In spite of fluctuations caused by virus resurgences in mainland China, our accommodation business, which is positioned as a growth engine for the company, saw striking growth in the first quarter. We continued to build up market presence in lower-tier cities by tapping into the different needs of different user groups with in-depth consumer insights. Over the past quarter, we further expanded our offline traffic sources. Apart from cooperating with hotels, we also partnered with other offline traffic hubs to acquire more offline users and bring them into our ecosystem. Furthermore, we continuously leveraged the immense traffic from our transportation business to promote our accommodation products and services to drive further growth in the accommodation sector. For the first quarter, our domestic room nights sold registered a substantial growth of 45% compared with 2019.
Rooms sold in lower-tier cities saw an accelerated growth of more than 70% on base of 2019. Meanwhile, we made continuous efforts in developing and innovating our value-added products and services, creating new growth catalysts for the accommodation business. Although the Stay Put policy during Spring Festival had adversely impacted our transportation business, we still managed to get the better of the hardship and outshine others. We continued to strengthen our market position in our advantageous regions, as well as making more efforts in attracting potential users by learning more about their preference and consumption patterns with the help of our outstanding algorithm capability.
In the first quarter, our domestic air ticket volume witnessed a decent increase of 20% when compared to 2019. Our train ticketing business, we mainly focused on enhancing user value by diverting traffic to other business segments, as well as innovating products and services so as to better serve our users' needs. The business saw a faster recovery in revenue in the past quarter as users were more willing to purchase our innovative value-added products and services, which we perfectly designed to meet their needs when there was a shortage of supply. In the following quarter, we will continue to work on user value to drive train ticketing growth. We have been emphasizing many times the role of our bus ticketing business within the company as a vital instrument to grow our user base, given its enormous market capacity, but extremely low online penetration level.
Throughout the past quarter, we continued to roll out bus ticketing vending machines across the country, covering more than 270 cities and having nearly 9,000 machines installed by the end of March. As a result, our bus ticket volume saw brilliant growth of 150% in the first quarter compared to the same period in 2019. With the extensive rollout of the vending machines, we further penetrate the lower tier cities and even into some counties and townships. In late March, we launched an innovative product called Blind Box of Air Tickets. Amid the backdrop of an accelerated release of pent-up demand, this blind box, which symbolized the uncertainties rapidly evolved into a caliber for younger users and went viral across social media platforms in China, creating a phenomenal marketing campaign for the company and echoing our ambition to build a younger image for our brand.
We see greater opportunities and growth potential in China's travel industry, especially in lower-tier cities post-COVID, We will spare no effort to grow as bigger and stronger. Looking towards to the rest of the year, we are more confident than ever that we will have a fruitful year by riding on our superior execution capability, current customer-oriented mindset, Last but not least, on our strategic focus on lower-tier cities as well as on empowering the travel industry with our prominent technology solutions. With that, let me turn over the call to Joyce for our operational highlights in the first quarter. Joyce, please.
Thank you, Heping. The stricter travel restrictions during Chinese New Year did cause fluctuations in the travel industry, but the pent-up demand gradually released as the original virus outbreak was quickly controlled and eliminated after Spring Festival. Since March, we have seen increasing demand in the travel industry, with us leading the industry growth. As an innovative online travel player in China, we always put our user at the center of our business. Every innovation in our products and services comes from our deep dive into users' needs and preference. In the past month, our Blind Box of Air Tickets, tailor-made for younger users, given their preference for the streak of uncertainties, caused a widely ranging discussion over social media platforms.
By purchasing a Blind Box, users can get a one-way air ticket with a designated departure city at a randomly assigned destination on a random date within three to 30 days. This innovative product can not only raise our brand awareness among younger generations, but also made a momentous contribution to our MAU in April. For the first quarter of 2021, we continued to deepen cooperation with the Tencent so as to become more involved in Tencent ecosystem. We joined hands with the Tencent Maps to offer travel products and services. Tencent Maps users can have direct access to our accommodation products and air and train ticket service in our Mini Program embedded within its app.
To better seize the demand of Generation Z, we optimize our operations on QQ Wallet by taking into consideration of the total different consumption patterns of the younger generation. This greatly enhanced the younger user experience and has boosted the volume of orders within QQ Wallet. We continued to explore traffic within Tencent ecosystem. In addition to QQ Music and Tencent Video, we also drive users to our Weixin Mini Program from QQ Browser. Apart from the Tencent ecosystem, we also endeavor to seek new online traffic to diversify our traffic sources, as well as serving more users. In the first quarter, we commenced the cooperation with a leading e-commerce platform in China, through which our top product services available on the platform. We launch more tailored product service to better accommodate the needs of users on the e-commerce platform.
Since last year, we have built a strong partnership with China's major handset vendors and continued to reinforce cooperation in the past quarter. We achieved in-depth sharing of membership benefits. We co-launched marketing campaigns during Chinese New Year to have our brand highly exposed. By product innovation and operation optimization, the conversion rate on the handset vendors has impressively improved. As a result, the MAUs of our Quick Apps saw phenomenal growth in the past quarter. Furthermore, we are devoted to our offline user acquisition initiatives. For our accommodation business, we explored more consumption scenarios in addition to hotels to seize more offline users, especially in low-tier cities. Riding on our strong execution capability and strengthen the relationship with upstream suppliers, we roll out more bus ticketing vending machines and attraction ticketing vending machines across China, and further penetrating to low-tier cities where bus is the primary vehicle for travel.
These three initiatives not only help accelerate the online penetration level of the traditional industries, but also bring a sizable amount of paying users in a cost-effective way. With efforts aforementioned, our average MAUs for the first quarter post a decent growth of 17.5% when compared with 2019 at around 234.2 million, largely driven by the stable traffic from Weixin platform and explosive growth in other channels. Our average MPUs maintains growth momentum and reaches an accelerated growth of 18.2% on a base of 2019, reaching 27.3 million in the past quarter. Our 12-month rolling paying users recorded 159.3 million in the past quarter, an increase of 40.9% compared to 2019. The growth in paying users was many thanks to our effective offline user acquisition initiatives and highly efficient operating capability.
In our last call, we mentioned we aim to build as the leading travel brand in low-tier cities to seize opportunities post-COVID. During the first quarter of the year, we stepped up our investments in our branding campaigns to boost brand awareness and recognition among our targeted users. We've placed pre-roll adverts in several popular TV shows to increase our brand presence among the younger generations. In the meantime, we continue to roll out our advertisement placement at the railway stations and airports in low-tier cities, as well as on high-speed trains and airlines covering South Western, Northern, and Central China. Moreover, our membership program has made a great leap during the past quarter with an accumulated number of Black Whale members exceeding seven million by the end of March.
During the quarter, we launched monthly Black Whale Membership program to better cater to user needs, which led to a marvelous increase in purchasing rate of the membership. We pinned down certain hotel users to give out our VIP lounge service at railway stations, which greatly enhanced user satisfaction and recognition of our brand. The virus resurgence in Northern China, which led to strict travel restrictions during the past Chinese New Year holiday, did impact our business in the past quarter. We adhered to our cross-selling strategy and continued to divert traffic from the train ticketing segment to our air ticketing, accommodation, and attraction ticketing business. By leveraging our big data capability to better predict user consumption patterns and their underlying needs, aiming to transform from OTA to ITA, we focus on enhancing both internal and external efficiency through technology.
On one hand, we are committed to empowering our partners' business by our internet technology and expertise with an aim to create a highly efficient and resilient travel ecosystem. In the past quarter, we signed a strategic cooperation agreement with Xi'an Airport to facilitate its development as an intelligent airport. We not only helped the airport to develop Weixin Mini Program, but also had in-depth cooperation concerning product innovation to attract passengers for the airport by riding on our algorithm and innovation capabilities. Besides, we have devoted comprehensive solutions to help individual hotels and small chain hotels with respect to daily operations, as well as management of the inventory, revenue, and marketing. On the other hand, we are devoted to perfecting our users' experience through technology innovation. We persevered in optimizing the travel solution provided by our intelligent Huixing system so as to better fulfill our user needs.
We strive to not only enhance our algorithm capability but also seek to increase user value by digging into their online needs. Our Huixing system continued to demonstrate its exceptional value in the first half of the quarter. 1 million rooms were hosted to suppress the spread of the virus. In addition, we have successfully developed an intelligent on-site command system for the customer service team, which is capable of predicting upcoming customer service requests and scheduling work shifts in a corresponding way. This has greatly enhanced the labor efficiency in the customer service center. With this, I'll hand over the call to our CFO, Julian, who will walk you through our detailed financial results in the first quarter of the year. Julian, please go ahead.
Thank you, Joyce. Good evening, everyone. For the first quarter of 2021, we reported a net revenue of RMB 1.6 billion, representing a 61% year-over-year increase from the same period of 2020 or a 9% year-over-year decrease from the same period of 2019. The decrease from 2019 was mainly due to three factors. Number 1, the international travel is still frozen, and 2, pre-purchase business is substantially reduced for risk control, and 3, domestic market was under pressure in the first half due to stricter travel restrictions before and during the Chinese New Year holiday in 2021 following virus resurgence in the winter. Benefiting from the improvement of operational efficiency and prompt cost control of sales marketing in January and February, we achieved a RMB 296 million adjusted net profit with 18.4% net margin compared with 16.9% net margin in Q4 2020.
We booked a RMB 33.3 billion GMV in the first quarter of 2021 with an 83% year-over-year increase compared with 2020 or a 7% decrease from 2019, mainly due to substantially reduced pre-purchase business and restricted international travel, as I mentioned. Besides, the ADR and ATP were still negatively impacted in January and February by the COVID-19 resurgence. However, the negative impact was partially offset by the significant growth in room night and air ticket volume, which was attributable to our audacious measures to seize growth opportunities when pent-up demand was quickly released in March. As we mentioned, we saw a very clear demand jump in March with more than 80% growth in accommodation room nights, 40% growth in air ticket volume, and more than 250% growth in bus ticket volume compared with 2019 in March.
Without hesitation, we enlarged the marketing investment since March to aggressively capture the market share in every product line, especially in lower tier cities. Accommodation reservation revenue achieved RMB 459 million, representing a 100% increase compared with 2020 or a 6% decrease compared with 2019, mainly impacted by restricted international travel and reduced pre-purchase business. Domestic room night growth in the past quarter accelerated to 45%, supported by the short-haul traveling and local consumption since Chinese New Year. Geographically, the room nights grew over 30% and more than 70% respectively in higher tier cities and lower tier cities, thanks to the effective execution of our strategic priorities, such as cross-selling and offline user acquisition. ADR was still dropped in the past quarter, which was caused by the short-term half-price deals by the hotel industry as well as our strategy to further penetrate into lower tier cities.
The take rate was flat compared with that of 2019, as we put more resources in couponing since March to capture the market recovery. However, the increase of VAS contribution in accommodation segment offset part of the impact of the increase in couponing. Transportation ticketing revenue for the first quarter of 2021 was RMB 1,023 million, representing a 49% increase compared with 2020 or a 19% decrease compared with the same period in 2019. The gap to the pre-COVID level was primarily caused by halted international travel and the Stay Put policy, which severely impacted the back-to-home traveling demand in the first half of quarter one, as we mentioned above. However, as the COVID cases were well controlled in every very short time, the pent-up demand was surprisingly released since March, and we moved fast to seize the recovery opportunities.
In March, both our air ticketing and bus ticketing business saw a very remarkable year-over-year growth in volume when compared with 2019. Other business revenue achieved RMB 132 million in the first quarter, representing a 48% increase compared with the same period of 2020, or a 273% increase compared with 2019. The increase was mainly contributed by the new initiatives such as hotel advertisement, hotel PMS, TMC business, and paid membership cards. Gross margin was 74.7% for the first quarter of 2021, increased from 72.1% for the same period in 2019 and 73.7% for the previous quarter. The continuous margin improvement was mainly helped by our streamlined operations, intelligent dispatch ability, and a revenue mix change in the past year. In the first quarter of 2021, our adjusted EBITDA achieved RMB 417 million, with margin increased to 25.9% from 24.3% quarter-over-quarter.
Adjusted net profit achieved RMB 296 million, with margin increased to 18.4% from 16.9% quarter-over-quarter. Service development and administrative expenses in the first quarter of 2021 decreased by 37% for the same period of 2019 and decreased by 26% from previous quarter. The decrease was mainly driven by R&D expenditure reduction and operational efficiency improvement. Excluding share-based compensation charges, service development, and administrative expenses in total accounted for 22.7% of revenue in the first quarter, compared with 23.0% of revenue in the same period of 2019 and 22.5% of revenue in previous quarter. Sales and marketing expenses in the first quarter of 2021 increased by 32% from the same period of 2019 and decreased by 17% from previous quarter.
We tightly controlled the marketing spending in the first half of the past quarter, but promptly shifted to investment mode in the second half to aggressively seize the recovery opportunity. We increased the investment in offline advertisement and user acquisition initiatives in lower-tier cities such as bus ticket and attraction ticket vending machine, as well as in online user promotions to accelerate cross-selling, to enhance the frequency and the user's value in the long run. We also launched innovative marketing initiatives such as Blind Box of Air Tickets, to closely engage our current users, as Joyce Li mentioned. Excluding share-based compensation charges, selling and marketing expenses accounted for 37.9% of revenue in the first quarter, compared with 24.9% of revenue in the same period of 2019 and 39.9% of revenue in previous quarter.
As of March 31st of 2021, the balance of cash equivalents, restricted cash, and short-term investments was RMB 6.4 billion. Following the rebound trend in March, the release of pent-up demand was astonishing and further accelerated in Qingming Festival and Labor Day holiday. We have broken the historical records of volumes in each product line during the Labor Day holiday, with a mixed demand for long-haul, short-haul leisure traveling, and hometown visits. After almost a one-year cultivation and preparation, we are now in the best position to capture the opportunities in the travel industry involving every travel scenario by winning new users in lower-tier cities and thus gaining market share. The remarkable rebound in quarter two has once again demonstrated that traveling is an important and essential activity in our daily lives, with demands for various purposes including business, leisure, adventure, family reunions, or friend gatherings.
Adhering to all our strategic priorities, we are very confident to lead the industry growth with decent profitability, thus generating more value for our users, suppliers, employees, and shareholders. We will persistently focus on our mission to make every travel smart and joyful for our users. Operator, we are ready to take questions now. Thank you.
To ask a question, you will need to press star one your telephone. To withdraw your question, please press the pound or hash key. Next, we have got question from the floor this time. Thank you. The first question is from Brian Gong from Citigroup. Please ask your question.
Thanks, management, for taking my question. Congratulations on very solid results and outlook. I have two questions. The first question is about during the Labor Day, Tongcheng Travel traffic reached positive growth, but I think the industry revenue only recorded around 77% of 2019 level. I just want to see management's view on this. What factors makes the industry revenues still not fully recovered yet? When do you think it will get the full recovery? My second question is about the outlook and recent. Does management see any impact of recent small outbreaks of COVID in Anhui? How does management look at the outlook for the summer session coming soon? Thank you.
Thank you, Brian Gong. I will take the first question. The revenue for the whole industry was only 77% of that in the same period 2019. From a company side, we are not quite sure about what is included in the definition of the revenue for the whole industry. We can share what we observed from this holiday. I think the changes in the consumption pattern of the travelers may contribute to the gap. First of all, some of the travelers were going back to their hometown to visit their family, so they will not have too much spending for the trips during the Labor Day holiday. Secondly, I think the inter-provincial or local travel was still the major travel choice for the travelers. It was quite common that people choose self-drive tour to visit nearby cities' attractions.
We believe this also affects the revenue of the whole travel industry. You can see that we still achieved a remarkable response in all business segments during the Labor Day holiday. We realized 15.6% growth in room nights sold during the holiday, 47% growth in air ticketing volume, and around 150% growth in tourism attraction ticketing volume. Which again, I think we have successfully outpaced the industry again. From what we can see so far, the growth momentum, our business after Labor Day is still quite positive.
Yeah. In terms of the impact from recent small outbreaks in Anhui, we think the impact will be very limited because first, it's just happening in some very small cities, but not like Beijing, Shanghai, like last winter. The second, the government have very fruitful experience of faster control of any resurgence of the COVID. The third thing is the vaccination. Nowadays the vaccination has, I think, take 20%- 30% of the total population. As the vaccination have been taken more and more, some of the scientists have expected that there would be 80% vaccination taken in China by the end of this year. I would believe all of the impacts will not happen again in China for the COVID. In terms of what is the performance look like for summer session or Golden Week.
Actually, as we mentioned a lot of times, the booking window currently in our platform is very short, so we cannot provide any clear views for the very long-term. Actually, I can share some latest business performance in April and May. For example, for user side, the pent-up demand release boosted in the industry recovery in April and May. Meanwhile, we already increased our sales marketing investment to capture the market rebound opportunity as well to achieve a very strong growth in traffic and user acquisitions, which continue to lead the whole industry. The users from our own apps and other channels, such as Quick App, grew much stronger, benefiting from our marketing campaigns and pioneered products, such as the Blind Box of Air Tickets.
Other than business travel and the long-haul travel demand, the short-haul travel and staycations were very popular during the COVID-19 and getting more and more popular in the weekends after that. As we observed, actually, the traveling frequency of users increased obviously when compared with the same period in 2019. For our accommodations in these two months, room night growth further accelerated in April and May, as we mentioned. For the quarter two, we believe the growth rate for room nights were even higher accelerated than that of in quarter one. For the ADR of our accommodation business just slightly dropped when compared with quarter two in 2019 because the change in our product mix has volume contribution from lower tier cities continued to increase. Actually, the ADR decrease have been largely narrowed down within I think 5%.
Meanwhile, the hotel owners actually are more willing to place advertisement in our platform to capture the new opportunity and improve their RevPAR. That create additional revenue for our platform, the hotel advertisement as well. For transportation, as we mentioned in prepared remarks, we keep strengthening our advantages in air and train tickets as well as offline service of bus ticketing, especially in lower-tier cities, to capture the new demand for short-haul traveling within provinces. As the ticketing maintained its growth, air ticketing maintained its growth momentum because of our regional advantage in our target markets. Ground transportation, as always, took the role of traffic and new users engine within the company.
In order to increase the user value, actually other than cross-selling from ground transportation to hotel, we put more effort to direct the ground ticket users to become our air ticket users. According to the market statistics, above 1 billion Chinese people still haven't got any flight experience. That represents an immense opportunity for the industry. With our intelligent pricing system, users could find that some of the air tickets were even cheaper than the train tickets for the same route at the same time. This not only improved our total conversion rate, but also improved the cross-sell from ground to air. Also the ticket for air is far more higher than the ground, contributing to the hyper-growth in air tickets as well when compared with 2019, and also beat the market growth. Meanwhile, the upward trends for staycations is also generating new opportunities in our attraction ticketing business.
We prepare to invest some more on offline vending machines at the tourist attractions as what we did for the bus ticketing business to accelerate our new users acquisition from offline channels. Okay. Thank you. That's our comments.
Thank you. That's very helpful. Thank you.
The next question's from DS Kim from JPMorgan. Please ask your question.
Hey. Hi, Julian and Joyce Li and everyone. Congrats on good results and very strong guidance. Well, my first question is about bus ticketing and other offline channels. So far, how big of a contribution did it bring in terms of users and paying users, if you can comment? Based on our observation, which of our new traffic channels, including offline and these video streaming and whatnot, give us the best ROI? Could you also comment on customer acquisition cost by major channels, if possible? I have a couple of follow-ups.
Yeah. Actually, the total offline users that we acquired have already contributed 11%-12% of our total monthly paying users in, I think, March and April. For the majority, it's still the bus ticketing vending machine. Also the most efficient channel is, of course, the QR code in front of the hotel front desk. For the ROI and also for the user value, actually, the investment per user of bus vending machine was very limited as we talked several times. It's only RMB 3-RMB 4 for each. While the investment for hotel is a little bit higher, like RMB 30-RMB 40 for each new user. Still relatively lower than user acquisition cost of our app market.
The user value need to be further dig out as we need some time to get familiar with the user behavior for this new group, especially for the users that we acquired from the bus vending machine, and provide some customized target product and services to cross-sell and to enhance our user value in this target user. The target is to achieve positive ROI within one year, and yet we have already done that. We would keep investing for this year and next year and expect a better ROI and user value improves. In terms of the frequency, actually, we can see that around 25% of the bus ticketing users acquired from vending machines repurchased within three months, and around 35% of hotel users acquired through QR codes getting repurchased within three months.
Since, I think, the second quarter, this quarter, we plan to promote the cross-selling from bus ticketing to other product and services on our platform, and to enhance their repurchase rate after we gain certain amount of bus ticket users. Of course, we need to invest some kind of sales and marketing dollar to do the promotion and the marketing campaign for that. For example, the VAS product service for bus tickets to cross-selling to hotels and the tourist attractions, et cetera. We will also leverage on our capability in data analysis and innovation to develop a suitable product for these users and dig out more value for this business.
Actually, of course, we believe the offline user acquisition initiatives will help us to improve our MAU and help the company to faster achieve our target for 200 million APU this year.
Thank you.
Thank you. That's really helpful. Can I just follow up on our same trip cross-sells ratio this quarter versus previous few quarters?
Yes. The same trip cross-selling is around 11% in March and April, but relatively lower in January and February because of the Stay Put policy impact. It's around, I think, 8%-9% in January and February. Of course, if you compare to the same period in 2019, there's a 5 point-6 point increase.
Thank you. Finally, is there any updates on Tencent contract, at least in terms of the timeline? Are we going to get something done before the expiry, I think, July of this year, or is it possible, or is that likely for us to have a little bit of extension because of the negotiations and whatnot? That's it from me, and thank you again.
Thank you, Kim. The agreement about the portal deal with Tencent is still under negotiation. We will disclose to market as soon as we can. I think the main point is our relation with Tencent is close and deeper as we continue to grow our cooperation at the business scenarios within the Tencent ecosystem, as we mentioned before. You can see that in the past year, we have expanded cooperation with Weixin on searching portal to build the ecosystem within Weixin. We also deepened our cooperation with Tencent for the traffic within its ecosystem, such as Tencent Map, Tencent online game platform, QQ Music, Tencent Video, QQ Wallet, and QQ Weather. As we role model the operating Tencent ecosystem, we believe that Tencent would like to work together with partners to build the Tencent ecosystem.
We believe our mutually beneficial relationship with Tencent will continue and will be stable in the future. Thank you.
Thank you so much. Thank you.
Once again, kindly limit your questions only to each time. Our next questions come from Alex Poon from Morgan Stanley. Please ask your question.
Hi, management. Congratulations on very strong results, every metric, especially the second quarter guidance. Can I ask about the 2021 guidance, given the very strong second quarter, and about the margin trend for rest of the year because of very strong revenue growth? Are we sticking with the original net margin guidance, or we will go for a higher margin expansion this year? Thank you.
Alex. Actually, as Joyce Li mentioned, because of the very short booking window, we cannot provide the guidance for too long time. If you ask the GP margin and also our net margin trends, actually, I can give you some comments. The GP margin, for several quarters, has a very clear improvement trend. In the future, the GP margin will be stable or even higher, quarter-to-quarter, even higher for the GP margin contributed by, one, the scaling effects as our revenue back to normal and have a higher growth compared with 2019. Also the service automation levels, and also increasing revenue contribution from accommodation business. That is very important because the accommodation business gross margin is far higher than transportation.
In terms of the bottom line, I would like to provide some comments on each of our spending feature lines, and then you can get the results of our net margin trends. In 2021, or post-pandemic, as we mentioned several times, we will implement a strategy of high investment in sales marketing dollars and branding dollars to gain hyper-growth on paid users and volume, which has been proved to be achievable and proper for the company in the current stage. Meanwhile, the service development and the G&A spending, which is relatively fixed cost as revenue dropped 4-5 percentage points as the total headcount will be largely stable in 2021. Thank you.
Thank you, Julian. If I can just follow up on one more question on hotel take rate. I noticed that in Q1, we might have seen a small drop in hotel take rate to 9% because of more couponing in March. Given the recovery in the travel industry, how should we expect the hotel take rate for the rest of the year? In terms of couponing, do you think the industry would have some sort of ceiling in terms of the couponing such that our hotel take rate downside-protected? Thank you.
Yeah, actually, we have a very decent plan to invest the hotel couponing in March and April, and also in quarter two. There are only two purpose that we invest on the couponing for accommodation. The one is the new user acquisition, especially in the offline. We can provide some kind of coupons to users. The second one is the cross-sell. We nowadays initiate a lot of cross-selling promotions to encourage our existing customers to book different products in our platform. We will then provide some kind of a coupon to these existing users. In the long run or in this year, I guess our blended take rate for the accommodation will be quite stable compared with 2019, because the VAS contribution is increasing in this year and will offset the impact of our coupon level increase. Thank you.
Your next question comes from Thomas Chong from Jefferies. Please ask your question.
Hi. Good evening. Thanks for management for taking my questions and congratulations on a very strong quarter. May I ask about our annual paying user outlook? Given that after reaching 200 million, can you talk about the long-term annual paying users that we should be thinking about? On the other hand, given that we have a large MAU base and we are also seeing advertising is picking up, how should we think about our strategic priority in advertising in the future? My last question is about the accommodation side. Can you also comment about the ASP trends? Should we expect ASP to come back to positive year-on-year growth in the second half? Thank you.
Thank you, Thomas. The first question concerned about annual paying user. I think we have mentioned that our addressable market is very huge. The online penetration rate for the logistics and hotels is only 25%, and the online penetration rate for restaurant is even low single digits, although we have achieved a very high growth last year. For the users we acquired from the vending machine, we can see that more than 60% are completely new to our platform. As the pandemic ends, I think it's a golden time for us to dig into the offline market and accelerate digitalization and online penetration. We have mentioned before, we will try to increase our annual paying users through several strategies. I think the first is that we will continue to promote our offline acquisition initiatives, as Julian has mentioned before.
We will cooperate with the hotels, the ride-hailing operators, and attraction places to further acquire more users from the offline. Secondly, we want to enhance our operation on our platform, which has recently improved our own app, but also we work with third-party vendors so that we can have more precise marketing and tailor-made recommendations to users. Moreover, we will fully enhance our product varieties. For example, the innovative product, as I mentioned, the Blind Box of Air Tickets, have been very successful to fulfill the users' [every detail] needs. Our paying users in the 12-month period ending in March, has already reached 159.3 million. We are very confident that the target of 200 million users can be achieved earlier than the end of 2021.
In terms of the cap of our MAU expectation, actually, I would like to add some comments. I think it's far more higher than our previous expectation for the cap of our MAU after we launched the Blind Box of Air Tickets and after we embarked on the stream leading advertisement initiative. The Blind Box of Air Tickets in April and May, drive a striking MAU growth, especially in, I think, in lower tier cities that have never used the OTA product in the past. In April, just after our Blind Box launch, our MAU in April hit a historical high, like 300 million in this month. We are very confident that our MAU cap will be higher, I think than 400 or even 500 in the future.
In terms of the ASP, just like what I mentioned in quarter two, as the hotel industry got to normal, our ADR or ASP for the hotel also got to normal, just like a 5% decrease compared with 2019. That is because our low-tier cities penetration strategy. Nowadays our room nights from low-tier cities have contributed more than 60% of our total room nights. That is why our ASP is slightly dropped compared with 2019, but probably is quite stable quarter-to-quarter in this year. Thank you.
Your next question comes from Ellie Jiang from Macquarie. Please ask your question.
Thank you, management, for taking my question. I just have a quick one on the MAU and sales marketing side. On the back of the strong MAU growth and as well as the successful launch of this promotional product, like the blind box we just mentioned, how do we think about retaining these new younger generations within our ecosystem? If there's any color you can provide on these younger users versus our existing customers in terms of their purchasing behaviors, that could be very helpful. How do we better address the differentiated demand across our user segmentation? How does that play into our sales marketing strategy into falling into these different quarters and different users?
Thank you.
Yeah. How about I put the comments like this? After the COVID-19, we think there's some kind of a behavior change for the travelers, both for the existing travelers and the younger generation. The first one is the frequency. Frequency increased because the short-haul traveling in the weekend and the staycation became very popular and became the custom for the travelers in 2020 during the COVID. After that, mixed by the business travel, long-haul travel, and also the short-haul travel, and also staycations. Nowadays, we have observed that the frequency for the travelers have been obviously increased compared with 2019. That creates a lot of opportunities for us to cross-sell the customers from one product to another as well. The second one for the younger generation is the social activities. Actually, for example, the Blind Box of Air Tickets.
It just used one hour to appeal 20 million active users within one hour, just after the promotion or the advertisement of our Blind Box initiative. The younger generation, the young people, they got advertisement by themselves. They will promote these very appealing products to their friends and to their family in a very short period. That is why we can accumulate that much active users within a very short time. That is the power of the social media and also the power of the social activities of the younger generation as well. Thank you.
Thank you. Your last question comes from Ronan from Bernstein. Please ask your question.
Thank you. Thank you, management, for taking my question. Just two from me. The first question is I want to ask about domestic growth and how much do we think the domestic boost has been driven by completely new lower tier cities that never or would not be considering outbound? Do we think some of the strong demand we see so far may be partially attributed to people in high-tier cities who cannot travel outbound at this point? Just want to see how do we see that pure domestic that may not be impacted even if outbound opens, or how much do we think could be related to outbound? Are we targeting some of our international products maybe later this year to capture that growth? I might have a second question.
Thank you, Ronan. I think it's hard to analyze from statistics side about how many demand was coming from domestic or the international demand compared to domestic. I think currently you can see the growth of the total industry, and you can see our numbers. I think for the past year and also for the first quarter and even the second quarter of this year, we have outpaced industry growth. I think for currently, the international situation is still volatile. In this year, we believe even in 2022, the Chinese people, if they want to travel, domestic travel will be their first choice.
Thanks. My second question, you talk about a very strong MAU, which is 300 million in April, being a record high. Can you just give us sort of split in our Mini Program contribution? Our own app also has been growing very rapidly. Let's say two, three years down the road, do we expect our own app to be a bigger and bigger portion of our own traffic as well, and the mix between different channels?
Yeah. Actually, in the past quarter, we invested more on our app. For example, for the blind box we launched and we set a special program, special campaign in our app for this kind of product. We invested more on the marketing RMB in the app markets, both for iOS and Android, in the past quarters. In terms of MAU and also the MPU, the portion from our apps has increased from 2019 and 2020. Nowadays, for example, for the MAU side, our apps, Quick App, and other channels, have already occupied 20%-25%. It's higher than that in 2019. In terms of the MPU, it also occupy 25% for the apps and also for other channels. Thank you. In the future, that is one of our focus.
We will keep investing to appeal more users to use our apps and other new initiative channels. For example, the Baidu Map, the Amap in general, that is also a very important channel to acquire new users. Thank you very much.
I would now like to hand the conference back to your speaker. Please continue.
Thank you very much. We are 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.