On August 22, 2023, Tongcheng Travel Holdings Limited (as service provider) entered into the Framework Agreements with each of Shanghai Mehood and Hunan Bolin (as accommodation supplier, and each being a connected subsidiary of the Company) for the provision of the Online Booking Services by the Group to the Hotel Partner Entities for an initial term of three years from August 22, 2023 to July 31, 2026. In exchange for the provision of the online Booking Services to the Hotel Partner Entities, the Group shall receive commission fees for each room night booked through the Online Platforms. Upon expiry of the initial term of each of the Framework Agreements, the term shall be automatically renewed or extended for another three years upon mutual agreement, provided that such renewal or extension of term complies with the Listing Rules, applicable laws and regulations. Subject to the Framework Agreements, the Company has agreed to provide (or procure its subsidiaries and/or consolidated affiliated entities to provide) access to the Online Platforms for the Hotel Partner Entities (and/or their respective member hotels) to offer accommodation services as accommodation suppliers (i.e. the Online Booking Services).

For each valid order confirmed by the users on the Online Platforms, the Group will receive commission from the relevant Hotel Partner Entity. During the term of each of the Framework Agreements, members of the Group and the Hotel Partner Entities may respectively enter into separate agreements from time to time in respect of the provision of the relevant services from the relevant party subject to the terms and conditions set out under each of the Framework Agreements. A user of an Online Platform may opt to either pay the relevant Hotel Partner Entity (or its member hotel) for the room night(s) purchased directly (a) at the relevant Online Platform; or (b) at the hotel under the relevant Hotel Partner Entity (or its member hotel).

The Group receives a percentage or sum of the amount billed to the users (or the transaction value) for the room nights sold through the Online Platform, as commission, from the relevant Hotel Partner Entity. Specific terms of payment for the commission (including the payment schedule) will be agreed and set out in detail in the individual agreements, on normal commercial terms and no less favourable than those charged by the Group to the independent customers for comparable services. The pricing basis of the provision of the Online Booking Services, allowing access to the Online Platforms for the Hotel Partner Entities (and/or their member hotels) to sell their accommodation services under each of the Framework Agreements.

The amount payable by the Hotel Partner Entities for the provision of the Online Booking Services shall be primarily determined either (a) by reference to the commission rate set and charged by similar online platform service providers of comparable size in the market, or (b) the commission rate charged by the Group for providing the Online Booking Services for other accommodation suppliers which are Independent Third Parties. Where such market and/or commission rate is unavailable, the amount payable to the Group shall be determined with reference to cost-plus basis, being the actual costs plus service fees for the value-added service, together with any cost of sales and administrative expenses incurred by the Group (including, without limitation, research and development costs and technician hiring costs), taking into account of (a) the expected cost of sales, expenses to be incurred and the market demands and expectations; and (b) the overall quality of the hotel room products and/or services offered by the Hotel Partner Entities (and/or their member hotels) and the scale of its target users. As a market leader in China's online travel industry, the Company is a one-stop shop for users' travel needs, offering a comprehensive and innovative selection of products and services covering nearly all aspects of travel.

Currently, the Online Platforms of the Group provide a large, diversified accommodation offerings to cater to users' varying budgets and preferences, as of June 30, 2023 offering access to over 2.5 million hotels and alternative accommodation options in addition to international and domestic flight routes, bus routes and ferry routes. The Hotel Partner Entities (and their respective member hotels) offers, inter alia, accommodation products as well as sophisticated and comprehensive auxiliary services across multiple disciplines, including multi-brand hotel management services. Through establishing long-term and sustainable business relationships with these selected ecosystem partners, the Group can (i) offer competitive pricing structure to the users across its Online Platforms which are open metasearch platforms; (ii) continue to enrich, supplement and diversify its existing product offering; (iii) increase hotel selection coverage for its large scale of users; and (iv) establish meaningful and value-adding linkage between the upstream and downstream businesses of the supply chain for the hotel and alternative accommodation related products of the Group, and lastly, (v) empower the tourism supply chain through its own platforms and technological advantages.

On the other hand, through collaborating with the Group, the Hotel Partner Entities can (i) take full advantage on the open metasearch platforms, extensive network and partnerships of the Group with various alliances; (ii) reach massive sales market and/or user base via the Online Platforms and further enlarge their respective customer bases; and (iii) through building direct partnerships and connections, whereby the Online Platforms are linked directly to own booking systems, better manage inventory and pricing information and confirm bookings on a real-time basis. The Framework Agreements have been negotiated and agreed on an arms' length basis by the parties thereto. The Directors (including the independent non-executive Directors but excluding Mr. Ma) are of the view that (i) the Framework Agreements are entered into in the ordinary and usual course of business of the Group; and (ii) the terms of the Continuing Connected Transactions and the Annual Caps constituted thereunder are on normal commercial terms and are fair and reasonable and in the interests of the Company and the Shareholders as a whole.