In-Depth Analysis Report on Ctrip's High Gross Margin and Consumer Rights Issues

Based on collected data and news materials, I have prepared a detailed analysis report for you:

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Ctrip Group (Stock Code: 9961.HK) has demonstrated remarkable financial performance that draws industry attention. According to the latest data [0], Ctrip’s gross margin reached as high as

in Q3 2025, a figure far exceeding that of most internet giants:

Company	Gross Margin	Net Profit Margin
Ctrip Group	81.55%	52.16%
NetEase	64.10%	~25%
Tencent	56.41%	~30%
Tongcheng Travel	64%	~15%

[1][2].

In the first three quarters of 2025, Ctrip achieved operating revenue of RMB 47.1 billion, a year-on-year increase of 15.9%; net profit soared to

, a year-on-year growth of 93.6% [1][2]. For Q3 2025 alone:

• Operating Revenue: RMB 18.3 billion
• Net Profit:
  RMB 19.9 billion
  (average daily profit of approximately RMB 216 million)
• Net Profit Margin: Once "surpassed operating revenue" (mainly due to RMB 17 billion investment gains from the disposal of its stake in an Indian platform) [1]

Excluding one-off gains, the adjusted net profit is approximately RMB 3.6 billion, indicating that the quality of earnings is clearly not as impressive as the surface figures suggest.

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Ctrip’s ultra-high gross margin is not accidental, but stems from its unique business model:

• Hotel Bookings
  : Commission rates typically range from
  15%-25%
  , with some high-end hotels reaching over 30%
• Flight Bookings
  : Basic commissions are around 3%-5%, but revenue is significantly boosted via value-added services such as insurance and seat selection
• Travel Vacation Products
  : Gross margin can reach
  60%-70%

• Mandatory/default bundled flight insurance
• Hotel coupons, membership service packages
• Ticket booking acceleration fees
• Excessive cancellation and change fees

Ctrip holds a

in the hotel and travel market [2], establishing absolute control over traffic and pricing:

• Low-price flight tickets for customer acquisition and user retention
• Value realization through high-commission accommodation services
• In-depth intervention in merchant operations via technical means

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According to data from the Black Cat Complaint Platform [3]:

Complaint Category	Cumulative Complaints	Complaints in Past 30 Days
Ctrip Travel Services	119,321 cases	2,386 cases
Ctrip Flight Customer Service	Approximately 40,000+ cases	Not counted
Ctrip Finance	22,870 cases	1,273 cases
Total	160,000+ cases	Approximately 3,659+ cases

On December 25, 2025, a consumer purchased two ‘premium economy class’ tickets from Hong Kong to Hangzhou via the Ctrip APP, paying over RMB 2,000 extra. Upon actual boarding, they found

no priority benefits whatsoever

, which were identical to regular economy class. Ctrip customer service was unresponsive and refused to take responsibility. The consumer demanded a refund plus triple compensation [3].

When a consumer checked flights from Wuhan to Chengdu for February 2026, the page showed ‘limited tickets remaining’, misleading them to purchase tickets at a high price in advance. A month later, the price dropped significantly, and the ‘limited tickets’ label disappeared. Ctrip acknowledged the issue but refused to refund the handling fee [3].

Distribution of main consumer complaint types:

• Refund Disputes
  : 28%
• False Advertising
  : 22%
• Bundled Sales
  : 18%
• Big Data Price Discrimination
  : 15%
• Excessive Cancellation/Change Fees
  : 10%
• Other
  : 7% [1][3]

Typical issues include:

• Different prices displayed for different users or devices
• Long-term users are charged higher prices than new users
• Default selection of value-added services such as insurance and coupon packages on the booking page

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Ctrip’s high gross margin comes not only at the expense of consumers, but also as a nightmare for merchants.

This is the most fiercely complained-about feature by merchants [2][3]:

• The system automatically scans competitors’ prices
• Forcibly lowers hotels’ base prices
  when Ctrip’s prices are found to be higher
• Merchants face extreme difficulty disabling this feature, requiring repeated applications (over ten times)
• Even if successfully disabled, account managers re-enable it the next day
• Merchants who resist are deemed in breach of contract and penalized

Ctrip’s ‘Premium Merchant’ partners are required to [2][3]:

• Refrain from listing on competing platforms such as Meituan
• Maintain high commission rates (15%-25%)
• Surrender independent pricing rights

Case	Room Rate	Amount Received by Merchant
Zhejiang Homestay (25 rooms)	RMB 251	RMB 169.14 (32.6% deducted)
Beijing Hotel (H1 2025)	-	Total profit plummeted by 92.9%

Merchants commonly report: "We are really like workers for the platform now; we have completely lost our pricing power." [3]

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On January 14, 2026, the State Administration for Market Regulation officially launched an investigation into Ctrip

in accordance with the Anti-Monopoly Law [2][3]. This is the first formal antitrust investigation into a major platform enterprise following similar actions against Alibaba, Meituan, and CNKI.

1. Forced Price Adjustments
   : Depriving merchants of pricing rights via the ‘Price Adjustment Assistant’
2. Exclusive Dealing
   : Requiring merchants to engage in exclusive cooperation, restricting competition
3. Abuse of Market Dominance
   : Strong pricing power with a 56% market share

Ctrip has been investigated over similar issues before [2]:

• March 2020
  : Hong Kong Competition Commission ordered rectification of ‘most-favored-nation’ clauses
• June 2020
  : Korea Fair Trade Commission launched an investigation into similar anti-competitive practices
• Mainland Market
  : Ctrip has never implemented substantive rectification

Pursuant to Articles 22 and 57 of the Anti-Monopoly Law:

• Order rectification
• Confiscate illegal gains
• Impose a fine of 1%-10% of the previous year’s sales revenue
• Merchants and consumers whose legitimate rights and interests are harmed may claim compensation [2]

Market	Intraday Decline
Ctrip Hong Kong	-6.49% (closed at HK$ 569.5)
Ctrip US ADR	-9.49% (pre-market)

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Ctrip’s business model can be summarized as:

Low-price flight tickets for customer acquisition → User pool accumulation → Value realization via high-commission hotels → Stacked value-added services
     ↓              ↓              ↓              ↓
   Consumers       Consumers    Hotel Merchants   Consumers

This model inevitably leads to:

• For consumers: Information opacity, price discrimination, bundled sales
• For merchants: High commission pressure, loss of pricing rights, compressed innovation space

Stakeholder	Current Status	Risks
Consumers	Paying premium prices, receiving diminished services	Voting with their feet, user churn
Merchants	Thin profit margins, lost discourse power	Decline in supply quality, insufficient innovation motivation
Platform	Short-term excessive profits, overvalued	Regulatory penalties, long-term trust crisis

Yang Honghao, Director of the Institute of Industry Research at the China Tourism Academy, pointed out: "Ctrip’s gross margin exceeded 80% and net profit margin exceeded 30% in 2024, with even higher gross and net profit margins for its hotel booking business; this is abnormal compared to the entire hotel industry which is operating on meager profits or even widespread losses. One company’s net profit exceeds the total profit of the entire industry, which fully demonstrates its extremely strong market dominance." [2]

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1. Ctrip’s high gross margin is indeed built on the detriment of consumer rights
   :
   • Over 160,000 complaints prove that consumer experience has continued to deteriorate
   • Issues such as false advertising, bundled sales, and big data price discrimination are prevalent

2. Merchants have become another exploited group
   :
   • Deprived of pricing rights
   • Commission rates as high as 15%-25%
   • Forced price changes via the ‘Price Adjustment Assistant’, exclusive dealing clauses restricting competition

3. Regulatory intervention is timely
   :
   • The State Administration for Market Regulation’s investigation sends a clear signal
   • Normalized supervision of the platform economy will not be relaxed
   • Law enforcement focus is deepening into the consumer livelihood sector

Aspect	Short-Term Impact	Long-Term Impact
Ctrip	Stock price pressure, reputational damage	Business model must be restructured
Consumers	More accessible rights protection channels	Expected improvement in service quality
Merchants	Expected recovery of pricing rights	Profit margins protected
Industry	Increased compliance costs	Reshaped competitive landscape

• Executive Share Sell-Offs
  : Executives including Liang Jianzhang, Fan Min, and Xiong Xing sold large volumes of shares to cash out in 2025 [1]
• Valuation Disputes
  : The practice of share sell-offs while conducting share buybacks has triggered market doubts
• Compliance Risks
  : Antitrust penalties may lead to significant financial and reputational losses

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[0] Jinling API Financial Data - Ctrip Group (9961.HK) Company Profile and Financial Analysis

[1] Yicai Data - "Ctrip Subject to Antitrust Investigation: The ‘Profit King’ Earning RMB 216 Million Daily Faces Strict Scrutiny" (https://www.cbndata.com/information/294899)

[2] 21st Century Business Herald - "Targeting ‘Anti-Involution’, Ctrip Investigated by State Administration for Market Regulation" (https://www.21jingji.com/article/20260114/herald/c586d9e945470e7b229deacdfd30b794.html)

[3] Black Cat Complaint Platform - Ctrip-related consumer complaint data (https://tousu.sina.cn/)

[4] Sina Finance - "Ctrip Faces Collective Antitrust Rights Protection: Homestays Unite to Fight OTA ‘Unfair Competition’" (https://finance.sina.com.cn/roll/2025-12-27/doc-inhewuuv4720922.shtml)

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: Jinling AI Financial Research Institute
: January 16, 2026