In a coordinated move to foster a healthier travel market, the State Administration for Market Regulation and the Ministry of Culture and Tourism convened an administrative guidance meeting on September 15th. The session brought together executives from major platforms including Meituan, Douyin, JD.com, Ctrip, Tongcheng, and Fliggy, urging them to strictly adhere to compliance responsibilities and proactively mitigate competitive risks.
Officials underscored that fair competition forms the bedrock of a market economy and that compliant operations are vital for corporate survival. Acknowledging the rapid expansion of the online hotel booking industry and its positive role in facilitating travel and boosting consumption, they also highlighted the escalating concerns over competitive practices that cannot be ignored.
As central players in the sector, these platforms are expected to uphold legal standards, embrace fair play, and strengthen their internal compliance frameworks. The regulatory bodies explicitly called on these companies to review their operations against relevant laws, including the Anti-Monopoly Law, the Anti-Unfair Competition Law, the E-Commerce Law, and the Tourism Law. The focus was on identifying and rectifying issues such as exclusive cooperation agreements and the enforcement of "lowest-price-on-the-web" policies, which are seen as detrimental "involution" tactics.
Industry analysts point to deep-seated structural causes behind these chaotic competitive practices. The immense network effects of platform traffic, the struggle for market share, alongside a highly fragmented hotel supply side where smaller establishments have weak bargaining power, create a fertile ground for such behavior. Platforms often leverage traffic preferences and rewards to lock in exclusive deals with hotels, use technical means to enforce price parity clauses, and resort to punitive measures to force merchants into unfavorable terms. This cycle of securing inventory and squeezing prices has led to a "full occupancy but zero profit" dilemma for many lodging providers.
As the cultural and tourism consumption sector recovers, this joint administrative guidance sends a clear signal about the ongoing normalization of oversight for the platform economy. It serves a dual purpose: first, to establish a clear competitive red line for the industry, targeting exclusive partnerships and compulsory "lowest price" policies to restore autonomy for hoteliers; and second, to shift the industry's focus away from a singular price war toward a competition rooted in service quality, thereby balancing the interests of platforms, hotels, and consumers. This strategic pivot is designed to foster a fair and orderly travel market and unlock high-quality consumption.
In immediate response, Meituan issued a statement on the same day affirming its commitment to fully comply with the compliance requirements for the online hotel booking sector. Similarly, Ctrip announced its full support for the regulatory directives and pledged continued cooperation with authorities to ensure the sector's healthy and orderly development.
Post-regulation, the competitive landscape is expected to evolve. Platforms will need to abandon old strategies reliant on exclusivity and price suppression, pivoting instead towards superior service, enhanced operational efficiency, and differentiated product offerings. For offline hotel suppliers, regaining the freedom to operate across multiple platforms and set their own prices will allow them to escape the constraints of traffic penalties and improve profitability through service quality. Meanwhile, travelers are set to benefit from a more transparent comparison environment and a wider array of choices. While the long-term outlook points to better accommodation standards and value-for-money options, the short-term may see a contraction in platform subsidies and structural price adjustments for certain properties.
The call to combat "involution" has been a recurring theme at the central government level over the past two years. What began as targeted crackdowns in specific sectors has now evolved into a broader task aligned with building a unified national market and reshaping industrial growth models. Experts argue that merely relying on administrative measures is insufficient. The solution requires establishing a more equitable competitive environment. This includes accelerating the revision of laws and regulations to close legal loopholes, setting clear quality standards across industries, and reorienting government procurement policies to champion a market ethos where higher quality commands higher prices.
Ultimately, they contend, the definitive answer to ending "involution" lies in technological and application innovation. Sustained policy support for fundamental research, the development of key generic technologies, and robust intellectual property protection are crucial. Such measures would ensure that innovators are duly rewarded for their efforts, fostering a shift away from zero-sum competition and towards creating new value.