Wondering whether you — how you have been adjusting it? And should we be expecting the sales and marketing expenses to further escalate as what we have seen in the last quarter? Thank you.
Cindy Wang: Thank you. We have seen basically a very strong recovery or increase in our business across different segments. So the corporate travel revenues for the second quarter represent 178% increase year-over-year and a 31% increase quarter-over-quarter. In general, even the corporate travel business has achieved — have achieved 89% if you compare, higher than the 2019 level, which mainly driven by the — both the air and especially the hotel bookings. And so the hotel bookings in the corporate travel business have achieved a five-fold if you compare — 5 times compared with the 2019 level, which has been a growth leader for our corporate business. Yeah, as I explained, corporate travel business or business travelers will have a higher correlation with the general macros, but we’ve also seen the trend that — actually, the manage — the business travel services have created a lot of values to help our customers to manage their total travel spending.
Therefore, we, to some extent, see acceleration of the new user acquisitions in the corporate travel business, which, to some extent, will offset the potential negative impact. And the second question is about the content — competing with the content providers. The content providers, they have different co-competence compared to the OTAs in general. And they primarily focusing on providing inspirations whereas OTAs will assess — will prioritize transactions and service fulfillment. Through the robust supplier chain management and high-quality customer service, we will — we are able to offer the competitive products, smooth booking experience, personalized and reliable travel services, which all these factors is critical success factors to provide travel-related services.
And I think for the content platform, they will find it’s very difficult to replicate. And at the same time, we will continue to invest in our own content strategy, helping users to find inspirations and make well-informed decisions. Thank you.
Operator: Next question comes from James Lee from Mizuho. Please go ahead.
James Lee: Great. Thanks for taking my questions. I have a big picture question for Jane, if I can. Maybe help us understand how do you think about the normalized growth rate post the COVID recovery. Is it different than before since I’m hearing that outbound ADRs in terms of inflation are higher and stickier. And also help us think about what drivers we should think about going forward? In the past, you talked about advertising. Just want to revisit some of the initiatives you’re working on long term. Thanks.
Jane Sun: Sure. Thanks, James. In the long term, we look at a couple of baseline. First of all, the GDP growth rate. If we assume the GDP growth rate is somewhere around 5%, normally, the industry for travel will outpace the GDP growth rate by a couple of percentage because people who can afford to travel normally earns a little bit more than average of the people. So we assume travel probably will be somewhere around 8% — 7%, 8%. And the third line we’re looking at is offline to online, and we can outpace the general industry growth by a couple of percentage. So somewhere around 15% to 25% in the next couple of years is what we have targeted for. The second thing is on ADR. You’re right that when we send more people from China to the rest of the world, normally, the air ticket is more expensive and hotel will stay — customers when they travel abroad will stay longer.
So both on the ADR and the GMV will increase when we increase the percentage of online travel. So we are very positive on that. The third one is on the drivers. On the drivers, we — like we said, the content plus advertisement is one of the drivers. Second thing is on the technology is how we can use new technology to explore new potential by offering better user interface and provide the targeted product, therefore, we can increase the conversion better. That’s also another generation — addition to our potential. The third one is geographic expansion. As our customers are traveling from China to Asia, from Asia to Australia, New Zealand to the rest of the world. We are also going to have more and more suppliers get on our system and therefore, increase our footprint in the global places.
So we are very excited for the future of the travel industry, and we will work very hard with our partners, with our service team to provide excellent service to our customers and bring new customers to our suppliers. Thank you.
Operator: Thank you for the questions. Our next question comes from Wei Xiong from UBS. Please go ahead.
Wei Xiong: Thank you, management, for taking my questions and congrats on another solid quarter. I want to ask about the outbound travel because the recovery on our platform again exceed the recovery pace of the industry and recently, we have further relaxation on group tours extending to 70 more countries and regions. So just wondering how should we think about the impact on outbound travel and our overall business? And also once we see better recovery on the outbound travel side, will there be any cannibalization to the domestic travel side? Thank you.
Cindy Wang: Thank you. Yeah. The industry level outbound the flight capacity is expected to reach 60% to 65% in the second half of 2023. In the — yeah, during the summer holidays, while the industry level air capacity is about 50% recovery, we already achieved both our air and hotel outbound business have recovered to about 80% if you compare with the pre-pandemic level. And the expanded list of overseas group tour destinations will contribute to the recovery of our outbound group to our business. And with the total number of approved destination increased to 138, the outbound travel to most destinations right now is unrestricted. And this development is expect to instill the confidence in the travel market and potentially expedite the restoration of international air capacity and local service capacity in the destinations, which will benefit across the board, not only the group tours, but also more importantly to our hotel, air and all other product offering business targeting to the outbound business.
I think in general, our outbound business has comparatively higher selling price, while the service cost is pretty much similar compared with our domestic business. So I don’t think there will be a cannibalization of the existing, for example, the domestic business. It’s just for customers. They have a wider range of options for the destinations they can choose and outbound travel business definitely will become a future growth driver for our business moving forward. Thank you.
Operator: Thank you for the questions. Our next question comes from [Bruce Chu] (ph) from HSBC. Please go ahead. Hello, Bruce. Your line is now open. Please go ahead.
Parash JAIN: Hi. Can you hear me?
Operator: Yes. Please go ahead.
Parash JAIN: Hi, Jane. This is Parash here actually. Bruce helped me register for the line. I had one question, probably two-part. So this quarter’s results set a high bar compared to the pre-COVID level, both in terms of the domestic business as well as in terms of profitability. Do you think that the transition from offline to online or some of the pent-up demand, some of the market share gain will settle around this level and incremental growth will be more as the underlying business grows? Or you think that with adoption of AI or a generative AI, the pace of offline to online that has started from COVID probably has further more room to grow and within that, probably Trip.com will take a larger share?
