China Securities Co.,Ltd.: National Day holiday visitor flow and revenue growth meet expectations; focus on the sustainability of leisure resilience.

China Securities Co.,Ltd. released a research report stating that National Day holiday cultural tourism consumption continued to show relatively high prosperity, with long-haul travel, hotels, and cross-border travel performing strongly. During the 7-day National Day holiday, nationwide domestic trips totaled 826 million person-times, and total domestic travel spending reached RMB 738.375 billion, up 6.3% and 4.3% year on year respectively on a comparable basis on a daily average basis. During the National Day holiday, daily average inbound and outbound trips by Chinese and foreign personnel were 2.209 million, +6.7% year on year; Hainan's National Day offshore duty-free shopping amount was RMB 855 million; according to big data monitoring by the Ministry of Commerce, from Oct 1 to Oct 6, revenue of 78 pedestrian streets (business districts) under key national monitoring rose 4.7% year on year. During the holiday, Macau inbound visitors totaled 1.143 million, with a daily average of 163,000, +15.5% versus the daily average during the 2025 National Day holiday. China Securities Co.,Ltd.'s main views are as follows: (1) Duty-free sector: On the margin, Hainan offshore duty-free sales in September are expected to remain stable year on year, while sales at airport and port channels remain under pressure; pay attention to the gradual implementation of the Taikoo project at Sanya duty-free city toward year-end. This summer, customs-supervised offshore duty-free shopping amounted to RMB 3.82 billion, with 3.809 million items purchased and 690,000 shoppers, up 4.1%, 0.3%, and 3.4% year on year respectively. China Duty Free's Sanya Taikoo Li project has made good progress in tenant recruitment, and the company is actively cooperating with Swire to advance it; brand owners are very supportive of the project and work has been carried out according to the established tenant recruitment plan. Offshore duty-free amount in August is expected to still achieve steady growth. At present, the Regent and Indigo hotel projects in Phase I Plot No. 2 of the duty-free city have been successfully topped out, and the first opening area of the Phase III China Duty Free Taikoo Li project has been completed and filed on schedule. As Swire Group's first coastal resort-style commercial block in the mainland, after completion the Phase III project will organically connect with Phases I and II of the duty-free city, integrating luxury retail, culture and arts, and coastal lifestyle into the same district; the implementation of the high-luxury hotel project will promote deep integration and two-way empowerment of the two major scenarios of shopping and vacationing; The Moodie Davitt Report this month published the latest annual ranking of the world's leading travel retailers. By annual turnover, Avolta maintained its market leadership as the world's leading travel retailer for the third consecutive year, with China Duty Free ranking second; in July 2026, Hainan offshore duty-free sales are expected to still maintain a relatively steady growth trend. In the first 7 months, Hainan offshore duty-free shopping amounted to RMB 21.6 billion, with 3.111 million shoppers and 17.653 million items purchased, up 17.9%, 11.9%, and 6.9% year on year respectively; in the first 7 months, Sanya's 4 offshore duty-free stores achieved shopping amount of RMB 13.842 billion, received 2.0546 million shoppers, and sold 10.5251 million items, up 19.34%, 9.15%, and 7.42% year on year respectively, as Sanya's offshore duty-free industry continued to maintain steady growth momentum. China Duty Free still ranks firmly at the top in Hainan by market share, and the acquisition of DFS Greater China retail business has completed closing (corresponding to an increase of RMB 1.2 billion in goodwill). China Duty Free's acquisition of DFS-related assets is conducive to business expansion in Hong Kong, Macau, and globally, and within the year it has officially taken over DFS store operations in Hong Kong, China and Macau, China; moreover, because the Sanya Yalong Bay DFS project was terminated, China Duty Free's competitive landscape in Hainan will further improve. China Duty Free's product pricing and inventory management have remained stable, and the company's strong supply chain and improved infrastructure capabilities after Hainan's customs closure can ensure that inventory continues to remain at a reasonable level. China Duty Free continues to deepen commercial value in Hainan. Since the customs closure last year, the company has made good use of regional and policy momentum. At present, China Duty Free's channel value continues to benefit from Hainan's unique scenarios, policies, high-quality properties, and upgraded operating capabilities, as well as support from the policy direction of continuously strengthening tax supervision during the year, and its channel value is becoming increasingly prominent; China Duty Free released its 2026 interim report. In 26H1, the company achieved revenue of RMB 27.655 billion, down 1.76% year on year; net profit attributable to parent was RMB 3.106 billion, up 19.49% year on year; net profit attributable to parent after deducting non-recurring items was RMB 3.078 billion, up 18.61% year on year. Revenue declined slightly, but operating costs fell 3.42% year on year and selling expenses fell 2.67% year on year, and the income statement moved into reverse growth; in Q2 alone, revenue was RMB 10.749 billion, down 5.75% year on year; gross margin was 34.32% (+1.87pct), net profit attributable to parent was RMB 758 million, up 14.54% year on year; net profit attributable to parent after deducting non-recurring items was RMB 741 million, up 12.33% year on year; in the Hainan offshore duty-free market, shopping amount rose 18.8% year on year in 1H, and the company achieved both revenue and market share gains; on the channel side, it newly won 29 inbound and outbound duty-free projects, covering key airports, ports, and land border crossings. In 1H, Hainan capital expenditure was RMB 420 million; Sanya company revenue was RMB 13.256 billion (+28.17%), and net profit attributable to parent was RMB 1.467 billion (+142.35%); Haikou company revenue was RMB 3.666 billion (+19.97%), and net profit attributable to parent was RMB 11 million (turned profitable year on year); Hainan Duty Free company revenue was RMB 1.872 billion (+2.53%), and net profit attributable to parent was RMB 67 million (+17.28%); the wholesale company's profit grew 29.91%, and exchange gains and losses in the current period decreased by RMB 50 million; Beijing and Shanghai Sunrise have begun winding down and deregistration and will no longer be disclosed. Shanghai International Airport-related duty-free contract revenue was RMB 429 million (RMB 628 million in the same period), and China Duty Free Shanghai (T2 + Hongqiao) recognized a current-period loss of RMB 61.89 million. Strengthened nationwide tax supervision and possible subsequent shifting of consumption tax are expected to continuously strengthen the tax advantages and differentiated competitiveness of duty-free channels. At the same time, the price advantages of core categories in duty-free channels such as gold, 3C, and high-end fragrance and cosmetics are gradually emerging; since the beginning of 2026, strong performance has once again verified that after customs closure, Hainan as a high-quality channel still has substantial future development potential; the Ministry of Commerce stated that it will support Hong Kong, China in integrating into and serving the overall national development situation, complementing Hainan's advantages, developing in coordination, and jointly playing a better role in the country's high-level opening up. On the airport and port side, as new agreements are gradually implemented, sales are expected to gradually recover, and the direct-mail model is expected to gradually repair. According to the Ministry of Finance's latest duty-free support policies, and referring to South Korea's development path, subsequent efforts in domestic products and downtown duty-free stores will become growth opportunities for the company's inbound and outbound duty-free business. Under the current environment of RMB exchange rate appreciation, the performance elasticity of the duty-free business format is also relatively obvious. In the year-on-year environment of 2026, it is expected that every 1% appreciation of the RMB exchange rate will drive gross margin up by about 0.5pct, and China Tourism Group Duty Free Corporation, relying on continuous iterative enhancement of its supply chain, is also continuously increasing its bargaining power with high-quality upstream brands. In the future, its core supply chain advantages will be further highlighted, forming strong support for gross margin. At present, sales recovery at airport duty-free stores is clearly weaker than inbound and outbound passenger flows. The bank believes this is mainly because the original port duty-free stores mainly targeted the inbound and outbound needs of Chinese mainland tourists, with purchases mainly of international-brand fragrance, cosmetics, and luxury goods. However, with intense price competition among brands on channels such as Douyin and Tmall, this has caused long-term disruption to the domestic fragrance and cosmetics price system, greatly weakening duty-free price advantages. But for inbound foreign travelers, the comparative advantage of domestic e-commerce cannot play a role, and current policies encourage the introduction of domestic brands and new consumer categories, which helps Chinese port and downtown duty-free stores gradually adjust their sales structure to be mainly oriented toward foreign tourists, thereby achieving new growth. International fragrance and cosmetics brands such as Shiseido and Amorepacific also traveled across the seas along with Japan and South Korea duty-free channels to open up global market space. Because international travel is an experience that cannot be replaced online, offline duty-free stores, as a crucial traffic monetization hub in the development of the inbound tourism economy, will have their long-term commercial value deeply explored again; pay attention to possible subsequent policy optimization for downtown stores. From the situation of global travel retail and mid-to-high-end fragrance and cosmetics and luxury goods sales, as well as the performance of leading luxury companies, starting in mid-2025, aside from Japan's high base, other Asian regions achieved relatively good recovery and growth. Judging from the recovery in the past two quarters, Hainan's year-on-year recovery is better than South Korea's duty-free channels and is expected to maintain a positive trend in the overall recovery in Asia. South Korea recently benefited from a decrease in Chinese tourists traveling to Japan and other factors, and sales have rebounded somewhat. At present, Hainan and major global fragrance, cosmetics, and luxury goods have entered the bottom of the inventory cycle. Subsequently, gross margin is also expected to benefit from the general trend of RMB appreciation, and the overall revenue growth of duty-free channels and CKH HOLDINGS' profit release are expected to usher in resonance. (2) Hotel sector: Current supply and demand performance in hotels. Demand side: In the first two weeks of September, weekly RevPAR for the national market was +8.1% and +3.3% respectively, among which the first week reversed the decline at the end of August, expected to be affected by the base effect from staggered timing and certain events last year. Weeks 39 and 40 were similarly disturbed by the staggered timing of the Mid-Autumn Festival and National Day holidays. In week 39, with 3 more Mid-Autumn holiday days year on year, RevPAR was +8.1%, while in week 40, with one fewer holiday day, RevPAR was -2.2%. Considering that RevPAR in normal base weeks in September was basically flat, the overall weekly RevPAR performance during National Day was relatively stable year on year. After September and the National Day holiday, once the supporting factor of leisure demand ends, this will be an important window to observe business demand and demand under a gradually rising base; looking at the breakdown of hotel RevPAR, ADR pricing power remains an important variable determining the hotel industry cycle and valuation, while ADR in September was clearly weaker year on year than in 1H. According to STR data, in the 4 weeks ended Sep 2, more than half of markets achieved occupancy growth, but divergence became more obvious, while only 44% of secondary markets saw year-on-year room rate growth. Supply side: From national weekly data, after late August and early September, the number of hotel rooms in hotels with more than 15 rooms nationwide slowed and declined. Room volume was basically stable in weeks 32-35, stable with a slight decline in weeks 35-37, and accelerated upward again after week 38 (Sep 14-Sep 20). It is expected that supply temporarily slowed after the summer, but overall supply during the year remains relatively stable. At present, it is still difficult to judge that industry supply-side squeeze and an inflection point have arrived, and further observation is still needed. From weeks 35-40, the week-on-week growth rates of room volume in hotels with more than 15 rooms were -0.05%, -0.2%, +0.1%, +0.3%, +0.2%, and +0.2% respectively. Leading domestic chain hotel companies are gradually moving toward the development direction of global hotel giants. The chainization rate still has ample room for improvement, supply-side growth is expected to gradually slow and fall back, the leading players' matrix completion is gradually finishing with relatively good UE, members are being cultivated in a more refined way, asset-light and structural margin improvement are being advanced, and shareholder returns are being emphasized; according to Tongcheng Yijing data, previously for seven consecutive weeks the hotel market RevPAR continued to turn positive, with a marginal trend of sequential improvement. At the end of August, market RevPAR growth accelerated noticeably month on month, and in the first week of September market RevPAR growth again accelerated noticeably month on month, while in the second week it still maintained positive steady growth. Business demand still needs continuous verification later. Since March 2026, cumulative fixed asset investment in nationwide accommodation and catering has declined year on year, with a trend of widening month-on-month decline. As of June 2026, 26H1 cumulative decline was 13%. In addition, judging from hotel groups' interim reports, overall industry supply indeed shows a marginal narrowing trend. Continue to pay attention to the trend that supply optimization is expected to usher in an inflection point in the next two years. IHG Greater China's RevPAR rose 3.1% year on year in 1H 2026, but growth slowed to 0.8% in Q2; Marriott Greater China RevPAR grew more than 3% in 26Q2, while Hilton was -2.2% year on year. Marriott's growth was mainly driven by luxury hotels, while Hilton said group/meeting demand in Greater China declined; according to STR data, since July occupancy rates of hotels at all levels nationwide have shown a week-by-week upward trend, but in the first 25 days of July only less than about 10% of secondary markets achieved both occupancy and room rate growth. Although 46% of markets achieved demand growth, affected by new supply, overall performance did not revenue growth. Overall demand is broadly consistent with daily civil aviation data during the summer. Weather and other factors in previous weeks gradually faded, benefiting from lower fuel surcharges. During the year, hotel industry supply may still maintain mid-to-high single-digit growth, and close attention still needs to be paid to changes in industry supply. Attention also still needs to be paid to the stability of demand under the current upward trend in domestic flight and high-speed rail prices. Event disturbances are expected to gradually ease, summer civil aviation passenger volume improved somewhat in the past week, and lower fuel surcharges benefit overall demand. Pay attention to the relatively fast supply optimization process in the domestic chain hotel industry, and to the dividend period in which leading players are gradually moving toward overseas giants' asset-light model, supply chain upgrading, and precise iteration of membership systems. Pay attention to the subsequent impact of changes in airfare and business high-speed rail ticket prices. Among sub-sectors, the hotel sector belongs to a trend where recovery has gradually been established. Since 25Q4, overall market operating efficiency reflected in RevPAR has clearly rebounded, and after this year's Spring Festival weekly data gradually warmed up, with growth steadily increasing month on month. This year, pay more attention to the two-way contribution from both supply and demand. On the supply side, this is mainly because some properties that were in a wait-and-see state in the past two years entered the market, potential incremental properties are gradually being cleared out, and supply growth is expected to return to a reasonable level; on the demand side, it is expected that if tourism continues to show resilience and business demand can recover somewhat from the low base of the past two years, this will drive an overall recovery in volume and price. This year, competition among leading brands at the mid-end hotel level and above is expected to become more intense. The number and scale of high-quality brands will continue to increase, and the mid-to-high-end ecological niche has strong spillover effects for hotel groups in model validation, supply chain building, membership system refinement, and lower-tier market layout. The hotel sector as a whole has gradually repaired RevPAR since 25Q4, and overall RevPAR growth in 26Q1 was obvious, and the effect is expected to continue. According to STR global, in 2026Q1 China mainland RevPAR overall rose 5% year on year, among which room rates remained the main driver, and occupancy also rose slightly year on year. During the year, supply-side growth is expected to have declined compared with 2025H1 and is expected to gradually return to a reasonable growth rate, but at the same time there are still many properties that were in a wait-and-see period last year, and this year they are expected to still maintain a reasonable pace of supply entry. Although overall RevPAR in 26Q2 was under pressure, most leading players still maintained a steady growth trend, and summer RevPAR, supported by leisure demand, has already shown signs of improvement. Subsequently, demand still needs verification from business and other demand after September; from the hotel supply structure of leading OTA platforms, although hotel supply has continued to grow in recent years, among all hotel samples including mid- and long-tail supply, the economy segment is expected to remain relatively stable in share, with limited overall structural upgrading, while in the chain hotel format, mid-to-high-end hotel supply is expected to grow relatively quickly, bringing structural RevPAR upgrading. Combined with current demand, tourism demand during the year is expected to still provide relatively strong support for the industry overall, the business environment is expected to gradually improve, and if the price side continues to repair, this will conform to the direction of continued supply-side improvement and policies of investing in people. At the same time, market RevPAR growth is more inclined toward advance and reasonable release of ADR under potential recovery and growth of business demand and inbound demand. The main DRIVE of chain hotel RevPAR growth may still mainly be structural optimization and upgrading. Comparing with the trends of overseas hotel groups in recent years, under the trend that leading domestic hotel groups' advantages continue to strengthen and the competitive landscape gradually becomes clearer, their development stage will tend to converge with that of leading overseas hotel groups, and they will gradually begin to enjoy the dividends of share gains, brand and membership system premiums, and global expansion. On the one hand, the RevPAR range increase, operating efficiency improvement, and structural margin improvement brought by structural upgrading will continue to drive performance contribution in the next two years. On the other hand, further optimization will be made in the precision, rationality, and targeting of membership benefit design, so as to gradually increase member ARPU and stickiness, fully leverage the value of member operations, and this is also the main source of future demand. Leading domestic hotels are expected to develop in the direction of high-quality global hotel groups. On the operating efficiency side, 25Q4~26Q1 continued to improve, and the effect is expected to be maintained. Same-store performance of leading chain hotels was relatively stable on a sequential basis compared with the same period in 2019, and structural upgrading during the year remains an important DRIVE for RevPAR. Leading hotel groups' operating indicators were under pressure in 25Q2, but after entering 25Q4 they clearly improved. Subsequently, as business demand recovers, tourism demand maintains heat, and industry supply-side growth returns to rationality, this is expected to continue to support market RevPAR. At the same time, combined with same-store RevPAR performance compared with 2019, the current year-on-year improvement in RevPAR is also mainly due to structural upgrading factors of hotel groups; on the operating efficiency side, from a same-store perspective, Shanghai Jin Jiang International Hotels' economy same-store in 26Q1 has achieved positive growth, while mid-to-high-end same-store was basically flat. Huazhu maintained high-quality same-store performance at a higher recovery level; from the supply side, each company's pipeline was basically stable, and the pipeline numbers of Huazhu and BTG in 26Q1 both increased month on month. From the perspective of net openings, Shanghai Jin Jiang International Hotels' net openings in 26Q1 increased year on year, while Huazhu and BTG decreased, reflecting that leading hotels have entered a period of steady expansion and have further raised requirements for BD site selection and property quality. 26Q2 was under some pressure, the summer recovered somewhat, and subsequently business demand still needs verification in 26Q4. (3) Catering sector: Catering service sales revenue during the National Day holiday was +9%, with major companies performing relatively well. In September, major leading companies' operating efficiency was relatively stable, and the inflection point of supply-side optimization during the year is still expected to continue to materialize. Interim reports in the catering sector were generally differentiated, and most showed pressure trends. Pay attention to the logic of supply-side optimization. At present, attention needs to be paid to the attributes of sub-track leaders in crossing cycles, mainly including strong organization and execution, modern supply chains and integration capabilities, iterative industry cognition, sufficient room for expansion and stable development pace, and product value for money. Focus on the catering industry overall supply side being expected to reverse the net increase trend this year, and the logic of supply-side optimization is still gradually advancing. Leading catering and tea beverage companies, as the high-base period such as subsidy retreat gradually arrives, still maintain relatively steady same-store and store efficiency performance. For leading tea beverage companies such as GUMING, Q2 same-store change may be slightly better than previously expected, and in Q3, against the background of last year's active takeaway price increases, same-store performance is expected to be basically stable compared with Q2. Pay attention to full-service and fast-food leaders under the consumption rebound trend, as well as targets with strong tea beverage attributes. At the same time, full-service leaders with steady store openings and gradually stabilizing fundamentals can also be continuously monitored. The price increase logic is not expected to become a boost to profit improvement in the catering industry during the year. It is expected that during the year catering companies will balance the relationship between gross margin and customer satisfaction, and mid-level gross margin with a certain degree of concessions to consumers will become the mainstream direction. Companies are frequently exploring second curves; for the tea beverage industry, if takeaway subsidies retreat, the impact on direct-operated or franchise models is relatively complex. The core still depends on the profitability of franchisees under the brand, and how brands choose to control the takeaway proportion under the 2025 peak period. The specific impact needs case-by-case analysis. This year, the integration of the tea and coffee tracks, as well as competition in the coffee track, are expected to intensify noticeably. The tea beverage industry has entered the second half, and the product upgrade cycle may become dominant. It is expected that during the year the catering industry overall will benefit from consumption bottoming and recovery, and therefore high-quality supply among leading caterers benefiting from quality and experience upgrades is expected to benefit from the trend; from the current industry development trend, the absolute value-for-money advantage in sub-tracks brought by leading supply chains and organizational structures has become a core barrier. Recently, price competition among track leaders has eased somewhat, and leading players' bargaining power is expected to become further prominent; the trend of the catering industry entering a supply optimization period in the past two years is clear. From the supply side, based on Hongcan.com big data, as of the end of 2025, the number of catering-related enterprises nationwide was 16.13 million, +6.5% year on year, with growth somewhat accelerating, while overall customer spending per order was stable with a slight decline in 25Q4. However, according to Jihai data, in 2026H1 the total number of stores in the catering industry decreased on a net basis, and it is expected to gradually reach the inflection point of supply optimization. This trend is broadly consistent with the bank's judgment that the catering industry entered a state of supply-side optimization after 2023. In 2023, the industry still saw a large influx of supply and net increase, but in 2024 net increase clearly narrowed. After 2023, the importance of refined catering management and core competitive barriers gradually became prominent, leading players' share further increased, the overseas expansion model continued to be verified, and the industry gradually showed signs of crossing cycles. (4) Scenic spots and leisure vacation travel sector: During the National Day holiday, the year-on-year growth rates of tourist trips and revenue on a comparable basis both accelerated compared with this year's Spring Festival and May Day holidays, showing relatively stable performance. Inbound and outbound trips maintained steady growth. Leisure travel still showed relatively good resilience during the year. Overall summer civil aviation passenger volume was +4.4% year on year. During the summer, civil aviation passenger volume on inbound and outbound routes exceeded 14.98 million person-times, up about 3% year on year; in July, overall civil aviation passenger transport volume is expected to be about 74.476 million person-times, +3.7% year on year. As of Aug 21, cumulative national passenger volume in civil aviation during the 2026 summer travel season was +4.6% year on year, further better than July on a month-on-month basis. Pay attention to demand elasticity brought by lower fuel surcharges; Aug 5 was another fuel surcharge cut after July. In recent weeks, summer civil aviation data has improved somewhat, cumulative summer civil aviation passenger volume has turned positive year on year, and the number of international flights in operation also improved noticeably year on year in the past week. The Ministry of Commerce, the Ministry of Culture and Tourism, China State Railway Group and other 8 units issued a notice on measures to promote the integrated development of railways and tourism and expand service consumption. Measures and policies to boost domestic demand and promote tourism supply optimization are expected to continue to intensify. Tourism continues to be the ballast of domestic demand consumption, with steady and sustained growth resilience, and it is expected that along with supply-side optimization, it will still be able to stimulate sustained growth potential in recent years. However, considering the rapid growth in past years, the trend during the year may gradually shift into a steady and reasonable growth range, and the demand side may be partly disturbed by fuel costs affecting civil aviation and other transportation modes. The sector should still focus on targets with relatively large marginal improvements in supply optimization, or targets with relatively strong expectations for injection of high-quality assets. The tourism sector as a whole saw relatively good performance verification in 25Q4 and 26Q1, consistent with the annual and holiday tourism revenue trends of the national market, but Q2 was also under pressure. Excluding part of the sector's restructuring profits, overall total profit declined year on year. Summer bookings showed relatively good recovery in overall leisure demand, and with the subsequent Mid-Autumn and National Day holidays, relatively good support and continuation are expected. From the national market perspective, in 2025, domestic resident trips were 6.522 billion, an increase of 907 million from the same period last year, up 16.2% year on year. Domestic resident travel spending was RMB 6.30 trillion, an increase of RMB 0.55 trillion from the same period last year, up 9.5% year on year. Customer spending per trip was -5.8% year on year; in 1H 2026, domestic resident trips were 3.463 billion, an increase of 178 million from the same period last year, up 5.4% year on year. Among them, urban residents' domestic trips were 2.594 billion, up 5.8% year on year; rural residents' domestic trips were 869 million, up 4.3% year on year. By quarter, domestic resident trips in Q1 were 1.901 billion, up 6.0% year on year; domestic resident trips in Q2 were 1.562 billion, up 4.8% year on year; in 1H, total domestic resident travel spending was RMB 3.21 trillion, an increase of RMB 0.06 trillion from last year, up 2.0% year on year. Among them, urban residents' travel spending was RMB 2.66 trillion, up 2.2% year on year; rural residents' travel spending was RMB 0.56 trillion, up 0.6% year on year; in 26H1, trip and revenue growth rates declined noticeably compared with last year. Against the broader background of supply-side optimization, attention still needs to be paid to the previously emphasized logic of new scenario implementation, new content empowerment, and acquisition and injection of high-quality assets. From the annual and quarterly report data of some listed travel companies, domestic tourism as a whole shows a trend of flourishing development and continuously expanding development regions. Because some previously niche, less popular, or lower-tier scenic spots are gradually being developed and actively empowered, this has triggered rapid growth in these scenic spots and tourism destinations, thereby partially diverting and impacting surrounding traditional scenic spots. Therefore, refined operations of scenic spots and repurchase rates brought by iteration of high-quality content have become key to competition. Phenomena similar to Guangde in Anhui require coordinated empowerment and precise cooperation across the entire region. From 26H1 civil aviation data, in 1H civil aviation passenger volume was about +0.8% year on year, with growth clearly declining from 26Q1 on a month-on-month basis; in 1H, the recovery rate of civil aviation international routes showed a downward trend from April to June on a month-on-month basis, at 83.7% in June, -9.5pct from the February high; since 26Q2, affected by higher fuel prices, domestic route fuel surcharges rose relatively sharply, and driven by costs, airlines' ticket prices also rose somewhat, but fuel surcharges were cut once each in July and August, which had a relatively good stimulating effect on summer travel; from the summer civil aviation passenger transport situation, summer civil aviation passenger volume was +4.4% year on year, especially achieving rapid recovery and relatively high growth after extreme weather in early July, with August growth further faster than July, demonstrating that leisure travel still plays an important supporting role in the current travel structure, and leisure demand resilience remains relatively strong. OTA: The Ctrip penalty officially landed. The State Administration for Market Regulation imposed administrative penalties on Ctrip Group Co., Ltd. in accordance with the law for abuse of market dominance, ordering it to stop illegal acts, fully refund order reserves of RMB 122 million, confiscate illegal gains of RMB 1.658 billion, and impose a fine of RMB 3.521 billion, with total fines and confiscations amounting to as much as RMB 5.179 billion. On the afternoon of July 25, Ctrip issued an announcement on rectification measures to implement the administrative penalty decision, stating that it fully accepts and resolutely obeys it, and will strictly implement all rectification requirements. Pay attention to Ctrip's sustained competitive advantage in industry chain empowerment capability after optimization of traffic mechanisms and its ability to attract resources after the uncertainty is resolved; at the same time, Ctrip's new commission system is gradually being implemented, and in the future it may lean more toward encouraging hotel resources to build comprehensive competitiveness, examining hotel resources' operating and management capabilities from multiple dimensions in a more authentic and accurate way, and it is also expected to better promote improvement in the overall operating quality and direction of the hotel industry, so as to achieve a better traffic ranking mechanism, broadly consistent with previous market judgments and expectations. The commission rate is expected to be in the 10%-15% range. Considering that commission choice still has some impact on the traffic mechanism, it is expected that the actual decline in commissions for Ctrip platform's overall hotel resources will also be similar to previous market expectations; overall, the subsequent direction of this series of regulatory actions will have a relatively limited impact on the business models and profitability of Ctrip's several core businesses, and after the regulatory event lands, Ctrip itself is also expected to usher in a relatively good recovery pace, including improving summer travel data, hotel supply still maintaining mid-to-high-speed growth during the year, and trip.com expected to maintain a stable pace of narrowing losses and turning profitable. Regulatory pressure faced by OTA giants is expected to gradually ease, and in recent years they are still expected to play an important empowering role in inbound tourism and tourism AI, developing well in line with inbound and outbound tourism demand and domestic tourism supply optimization. Entry by internet giants is expected to have some impact on industry competition models and iteration cycles. In terms of industry trends, it is necessary to respond actively, expand market space, and pursue collaborative win-win outcomes. Internet giants' past core comparative advantages lie in concentrated C-end traffic and distribution, and in the current core competition model of OTAs, they are also expected to have certain advantages in technical links such as acquisition of high-value-for-money resources such as flights and hotels, flight connection calculations, as well as in the second half's customized travel planning, UGC content ecosystem, and AI. They are expected to usher in rapid GMV growth under a low base in 2026, thereby gaining a certain market share. Leading OTAs, relying on vertical internet cognition accumulated over a long cycle in the industry, detailed iteration, and comparative advantages, still maintain industry leadership. Subsequently, they are expected to continue to make efforts in customized travel services, content ecosystem construction, AI capability improvement, and O2O, and with first-mover advantages quickly obtain relatively large capability improvements. Over the past year, the core playbook of traditional internet giants in the cultural tourism track has not undergone fundamental changes, and in the short term it is relatively difficult to challenge OTA giants' comparative advantages in full-industry-chain resource accumulation and empowerment capability, closed-loop fulfillment capability, industry cognition, and resource concentration in vertical tracks. (5) Gaming sector: In September, Macau gaming GGR recovered to about 82% of the same period in 2019, -1.2% year on year. During the National Day holiday, Macau inbound visitor performance was relatively good; in August, Macau GGR was MOP 21.891 billion, recovering to about 90.2% of the same period in 2019, -1.2% year on year, with growth +7.2pct month on month. The recovery rate was +7.4pct month on month versus July, consistent with the judgment that the diversion effect weakened after the World Cup ended in late July. GGR performed prominently in the weeks after the World Cup, and the one-off weakness in June clearly improved. August's recovery rate during the year was second only to January's 90.7%, close to the state in which monthly recovery rates after June last year were generally in the low 90s. From January to August this year, overall GGR was RMB 169.053 billion, recovering to 85.3% of the same period in 2019, +0.7pct in recovery rate compared with January-July. It was +3.7% year on year, with growth -0.7pct month on month compared with January-July; on the traffic side, in July 2026 Macau visitor arrivals totaled 3.542 million, +2.4% year on year, recovering to about 100.3% of the same period in 2019, +9.8pct in recovery rate compared with June. Mainland visitor recovery compared with the same period in 2019 was 105.1%, +12.3pct month on month versus June. July traffic clearly improved, expected partly because World Cup diversion ended in late July and partly because the summer peak season arrived after extreme weather in the mainland. In the first 7 months, international visitors were 1.597 million, +5.1% year on year; in the first 7 months, same-day visitors were +13.9%, while overnight visitors were -0.3%; in 1H: Southeast Asia, Philippine visitors -1.2% year on year, Thai visitors +51.4%. South Asia's Indian visitors +12.4% year on year; Northeast Asia's South Korean visitors +0.7%. Among long-haul source markets, US visitors +7.4% year on year; on the hotel side, Macau hotel occupancy in July was 91.6%, +0.5pct year on year (June was -2.6pct, 85.8%). Guest arrivals were -4.3% year on year to 1.229 million (June was -8.6%); five-star (94.2%, +0.2pct), four-star (90.3%, +3.8pct), and three-star (85.5%, -1.5pct); mainland China (923,000) -3.9% year on year, Hong Kong SAR (145,000) -13.8% year on year, international guests 89,000, +9.5% year on year. In 1H, international guests (662,000) +12.3% year on year, among which South Korea, Thailand, India, and the US were +13.0%, +43.5%, +16.1%, and +27.8% respectively, while Japan and Malaysia were -5.6% and -6.0%; in August, GGR recovery improved noticeably month on month, already relatively close to the high-base state of recovery in 25H2, but it is expected that it was still partly boosted by increased summer traffic and activities, and the recovery rate still needs verification under the continued high base in 2H; from interim reports, the main