Trip.com's Q2 2025: Contradictions Emerge on Hotel Pricing, Outbound Travel, AI Integration, Booking Trends, and Consumer Sentiment

The above is the analysis of the conflicting points in this earnings call

Date of Call: None provided

Financials Results

• Revenue: RMB 14.8B, up 16% YOY and up 7% QOQ
• EPS: RMB 6.97 (US$0.97) per diluted ADS; non-GAAP RMB 7.20 (US$1.01)

Guidance:

• Inbound travel expected to be a key growth engine as visa policies ease and global awareness rises.
• Plan to partner with 200,000 hotels over 3 years via Intellitrip; targeting 100% growth in inbound bookings, new users, and efficiency.
• Maintain ROI-disciplined, app-first international marketing; run signature campaigns through peak seasons with localized strategies.
• Entering H2 with focus on cost discipline and operational efficiency.
• Multi-year US$5B share repurchase authorized to at least offset ESOP dilution and potentially reduce share count.
• Domestic, outbound, and inbound volumes remain strong; ADR pressure stabilizing (domestic hotel declines narrowing to mid–low single digits in summer).

Business Commentary:

* Strong Travel Market Performance: - Trip.com Group reported a net revenue of RMB 14,800,000,000.0 for Q2, up 16% from the same period last year and 7% from the previous quarter. - This growth was driven by healthy demand across key markets and segments, supported by strong operational efficiency and continued top-line growth.

• Inbound Travel Momentum:
• Inbound travel bookings increased by over 100% year over year, driven primarily by demand from Korea and Southeast Asia.

• This growth reflects the broader potential of China's inbound travel sector, which remains underdeveloped despite its significant contribution to the national economy.

• AI and Content Strategy:

• AI plays a central role in Trip.com's business strategy, as the company upgrades its AI-driven Trip Planner to provide more personalized and intelligent planning experiences.

• The integration of AI and content enhances the platform's offerings, delivering accurate, context-aware recommendations that drive customer satisfaction and loyalty.

• Sustainability Initiatives:

• Trip.com Group encouraged over 100,000,000 travelers to choose eco-conscious travel options, marking a 39% year-over-year increase.
• This initiative is part of the company's broader commitment to promoting sustainable travel practices and fostering a more innovative, sustainable, and inclusive future.

Sentiment Analysis:

• Management reported RMB 14.8B revenue, up 16% YOY and 7% QOQ; international bookings up over 60% YOY; inbound bookings up over 100% YOY. Adjusted EBITDA rose to RMB 4.9B from RMB 4.4B a year ago and RMB 4.2B last quarter. They highlighted resilient domestic volumes, outbound hotel/air above 2019 levels, and a new multi-year US$5B buyback, underscoring confidence in long-term value.

Q&A:

• Question from Alex Yao (JPMorgan): How will AI and content strategy evolve over the next couple of years, and what are the key upgrades to Trip Planner?
  Response: AI personalizes planning and scales content quality; Trip Planner now turns any idea into an editable, LLM-powered itinerary using rich platform data to deliver reliable, tailored recommendations.

• Question from Joyce Ju (Bank of America): What are the booking trends this year, especially for cross-border travel?
  Response: Demand is resilient: domestic volumes strong but ADR slightly down; outbound flights 80–90% of pre-COVID nationally with platform >120%; foreign-to-foreign +60% YOY; inbound +30% nationally, >100% on platform.

• Question from Thomas Chong (Jefferies): How are hotel and air ticket prices trending, and outlook for the rest of the year?
  Response: Domestic hotel and air prices face pressure despite solid volumes; supply up mid–high single digits; summer hotel price declines narrowed to mid–low single digits; outbound air fares softening YOY as capacity recovers (still above 2019), hotels stable.

• Question from Brian Gong (Citi): How is consumer sentiment given macro uncertainties?
  Response: Volumes are robust across segments with strong interest in experiential travel; slight ADR declines, but sustained volume growth in domestic, outbound, and inbound.

• Question from Yang Liu (Morgan Stanley): Uni Trip’s direct airline sales—what impact on your business?
  Response: Market is large; Trip.com will compete on service and globalization (24/7 SOS, rapid response), not pure price, to win customer trust.

• Question from Wei Xiong (UBS): How do you assess the competitive landscape with JD and others entering?
  Response: Focus remains on high-quality service and comprehensive products over price wars to sustain leadership and customer loyalty.

• Question from Parash Jain (HSBC): Size and outlook for Old Friends Club and Travel+Entertainment, and expected contribution?
  Response: Senior travel could exceed US$1T in 3–5 years; off-peak friendly and high value; event-driven travel demand exceeds supply—Trip.com will keep investing to scale both.

• Question from Zhong Chao (Barclays): Please elaborate on the inbound travel opportunity in China.
  Response: China’s inbound was ~0.3% of GDP pre-COVID vs. 1–5% peers; with strong value proposition and promotion, inbound can scale significantly.

• Question from Simon Chun (Goldman Sachs): More detail on international (foreign-to-foreign) operations and long-term contribution?
  Response: International bookings +60% YOY with APAC as core; early momentum in Middle East; triple-digit inbound growth; loyalty upgrades improve retention and create a flywheel.

• Question from Wei Song (Mizuho): Update on 2Q trip.com marketing and plans for the rest of 2025?
  Response: ROI-disciplined, app-focused acquisition (app ~70% of orders); scaling improves efficiency; dynamic budget allocation; continue signature campaigns with disciplined spend.

• Question from John Choi (Dahua): Impact of aggressive marketing by global players on your spend in 2H and 2026?
  Response: APAC’s size/fragmentation supports growth despite competition; Trip.com leans on one-stop inventory, mobile-first, strong service, and localized, demand-driven marketing.

• Question from Keating Wang (CICC): Update on buyback progress and details of the new US$5B program?
  Response: Repurchased ~7M ADRs, fully using 2025 quota (~1.5% yield); new multi-year US$5B buyback funded by recent deal and cash aims to offset ESOP dilution and potentially reduce share count.