Trip.com's Strategic Shift to Experiences and AI: A High-Conviction Buy Before Q3 Earnings

In the rapidly evolving travel sector, Trip.com Group (TRIP) has emerged as a standout player, leveraging operational efficiencies, AI-driven innovation, and aggressive market expansion to position itself for long-term dominance. With Q3 2025 earnings on the horizon, the company's strategic realignment-centered on unifying its experiences platform and accelerating AI integration-presents a compelling case for investors seeking high-conviction opportunities.

Operational Efficiencies: A Foundation for Profitability

Trip.com's recent $85 million annualized cost savings program, driven by headcount reductions and streamlined operations, underscores its commitment to profitability amid a competitive landscape, according to the Q3 FY2025 earnings call transcript. This fiscal discipline has already yielded results: Q3 2025 revenue rose 4% year-over-year to $553 million, with adjusted EBITDA hitting $123 million (22% margin), exceeding analyst expectations, as noted in the Q3 FY2025 earnings call transcript. By narrowing its focus to high-growth areas like experiences and AI, the company is prioritizing long-term value creation over short-term diversification.

AI Integration: Redefining Travel Experiences

Trip.com's AI initiatives are not just incremental upgrades-they represent a paradigm shift in how travelers plan and engage with destinations. At the heart of this transformation is Trip.Planner, an AI-powered tool that synthesizes real-time data and 20 million points of interest to create hyper-personalized itineraries, according to the Global Partner Summit article. Complementing this are Trip.Best (for tailored recommendations) and Trip.Pulse (for trending event insights), which together have driven a 60% surge in bookings during H1 2025, as reported in the Global Partner Summit article.

The user impact is equally striking: the platform has seen a 100% growth in senior travelers, reflecting AI's role in democratizing access to complex travel planning, as noted in the Global Partner Summit article. As Jane Sun, Trip.com's CEO, noted, these tools are not only enhancing customer satisfaction but also solidifying the company's leadership in an AI-driven tourism ecosystem, according to the Q3 FY2025 earnings call transcript.

Market Expansion: Global Partnerships and New Frontiers

Trip.com's strategic partnerships are unlocking new revenue streams and geographic reach. Its collaboration with Türkiye's Tourism Promotion and Development Agency (TGA), for instance, has fueled a 50% year-on-year increase in traveler engagement, with Istanbul, Antalya, and Izmir now among the platform's top destinations, as reported in the Global Partner Summit article. The recent expansion of its Istanbul office in November 2024 further cements Türkiye's role as a global tourism hub, as reported in the Global Partner Summit article.

Simultaneously, the company is targeting the lucrative business travel market with Trip.Biz, a solution suite set to launch in over 30 markets by year-end 2025, according to the Global Partner Summit article. This diversification, coupled with leadership changes like the appointment of Xiaoru Dai as CTO, signals a tech-driven approach to scaling international operations, as reported in the China Travel News article. Dai's expertise in global system architecture is expected to accelerate integration between domestic and international platforms, boosting operational efficiency, as noted in the China Travel News article.

A High-Conviction Buy Case

Trip.com's strategic pivot aligns with macro trends: post-pandemic demand for immersive travel experiences, the rise of AI in personalization, and the need for cost-efficient operations. With outbound hotel bookings already surpassing pre-pandemic levels in Q3 2025, as noted in the Travel Sector article, the company is capitalizing on a recovering sector while outpacing competitors through innovation.

For investors, the combination of robust financial performance, AI-led differentiation, and strategic global expansion makes Trip.com a high-conviction buy ahead of its Q3 earnings. The stock's ability to sustain its 22% EBITDA margin while scaling AI and experiences suggests a strong balance sheet poised for compounding growth.