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Chinese O2O giant Meituan reported record-high hotel room booking during the International Labor Day holiday, however, their performance was suspected to have been whitewashed, according to industry insiders.
On April 29, Meituan Travel, the tourism brand of Meituan Dianping, sold a record of more than 1.2 million hotel room nights on a single day, according to a report by Meituan. The report also said that Meituan Travel sold more than 17 million hotel room nights in April, the highest record ever achieved by online hotel booking platforms in China.
However, hotel industry insiders pointed out that there are about 300,000 hotels, big or small, in China, with about 5 million hotel room nights available for reservation on a single day.
Considering the competitive landscape of China’s online hotel booking sector, currently, the overall available hotel room nights of all partner hotels of Meituan Travel is probably less than 1.2 million. The hotel room nights sold on the single day of April 29 as published by Meituan significantly exceeds its actual hotel room nights capacity, which does not make any sense logically.
Take Yuzhong District of Chongqing City as an example. A hotel named “Jiefangbei Hotel of Chongqing Kaixin Botique Hotel” sold a total of 2,432 room nights in April, according to Meituan’s report.
Now assuming that the hotel, which have 57 rooms in total, had been fully occupied through the entire April, we can calculate that its room nights capacity is 57*30=1,710. When comparing the 2,432 room nights sold with its 1,710 room nights capacity, there comes a logically impossible situation.
Same method can be used to analyze sales data of other hotels in Yuzhong District of Chongqing City and found it is not uncommon that sales data obviously exceeds the hotel’s room nights capacity.
Similar cases can be found in Jiaxing City and Yangshuo County of Guilin City, both belonging to Zhejiang Province.
Industry insiders estimated that the sales data was calculated in improper statistical methods.
In hospitality industry, the hotel “room nights” mean the total days（overnights）sold for a given period by a hotel, and hour-rate rooms are excluded in the calculation.
If Meituan included hour-rate rooms in its calculation of hotel sales, it will get a much higher number of “room nights”, which would explain why its room nights exceed the hotel’s capacity. It needs to be pointed out that this statistical method is inconsistent with the established standards of the industry, or it is a disguised form of “cheating”.
In addition, Meituan might has included invalid orders in its calculation of sales statistics.
In hospitality business, customers sometimes cancel their reservations before checking in. As a common situation in the industry, these bookings are deemed as invalid and excluded when calculating sales volume. If Meituan included these invalid bookings in its calucation, the sales figure would be much higher than the actual room nights sold by hotels.
It might also be the case that someone has used the method of click farming.
On May 2, 2017, in a notice circulated via internal mail, Meituan Dianping revealed that 10 corruption and cyber criminal cases took place within the year. Two of the ten cases involved corruption in hotel business.
Click farming has been spreading broadly across Meituan’s entire platform long before the company recognized it, as well as subsidy cheating, as stubborn illnesses of the company’s management. One can easily find on the internet various tutorials and servies of click farming targeting Meituan, known as a spectacular “Meituan click farming industry chain”.
Last December, The Beijing News reported a fraud where a group of more than 70 people colluded with dozends of Meituan’s partner hotels and employees to take advantage of Meituan’s refund procedure and gained RMB 5 million in 10 days.
As an unlisted company, Meituan enjoys full freedom with its statistics. But for whatever reason, it is unacceptable to cheat and click farm to make statistics “look pretty”.
In the meantime, Meituan has been burning cash in exchange for market shares and showcasing beautifully designed statistics to gain favor of capitals, understood by business insiders as preparing for financing.
Recently, in reponse to the rumor that “Tencent quits investing in Meituan”, the company announced that it has USD 3 billion in its account. The announcement was echoed by a round of challenges and its employees complained on social platforms saying that the company achieved break-even by reducting salaries.
(ASIA PACIFIC DAILY)
