Trip.com's Q2 2025 Earnings Call Contradictions: Travel Recovery and AI Strategy Divergences

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

Date of Call: August 27, 2025

Financials Results

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

Business Commentary:

• Strong Inbound Travel Growth:
• Trip.com Group reported a 100% year-over-year increase in inbound travel bookings in Q2 2025.

• This growth was driven by strong demand from Korea and Southeast Asia, and the potential of China's underdeveloped inbound travel sector.

• Financial Performance and Revenue Growth:

• The company's net revenue in Q2 increased by 16% year-over-year, with a 7% increase from the previous quarter.

• This was supported by healthy demand across key markets and business segments, and contributed by strong inbound and international business growth.

• AI and Content Integration:

• The integration of AI and content enhanced Trip.com's platform, delivering personalized recommendations and improving data processing efficiency.

• This was achieved by leveraging large language models and a rich content ecosystem, which are key to Trip.com's strategic focus on AI-generated content.

• Silver Generation Travel and Elderly Focus:

• The number of users in the Old Friends Club and their total GMV grew by over 100% since year-end 2024.

• This growth was driven by the rising engagement and purchasing power of the expanding and active senior travel demographic, who prefer thematic travel products.

• International Expansion and Loyalty Program:

• International bookings on the Trip.com platform increased by over 60% year-over-year, with significant contributions from the APAC region.
• Growth was supported by enhancements to the loyalty program, which strengthen user retention and create a flywheel effect for customer loyalty.

Sentiment Analysis:

• Net revenue rose 16% YOY (7% QOQ) to RMB 14.8B; adjusted EBITDA increased to RMB 4.9B from RMB 4.4B a year ago. International bookings grew over 60% YOY; inbound bookings rose over 100% YOY. Outbound hotel and air bookings exceeded 120% of 2019 levels. Management expressed optimism and announced a new USD 5B share repurchase program.

Q&A:

• Question from Alex C. Yao (JPMorgan): How will AI and content strategy evolve in coming years, and what’s new in Trip.Planner?
  Response: AI-personalized content and robust backend data improve planning and loyalty; Trip.Planner now uses LLMs and platform data to create editable, highly personalized itineraries.

• Question from Lixin Ju (BofA Securities): What were summer booking trends and cross-border dynamics?
  Response: Demand was resilient; domestic volumes strong despite ADR softness, outbound >120% of 2019 on the platform, foreign-to-foreign >60% YOY, and inbound to China >100% YOY on the platform.

• Question from Thomas Chong (Jefferies): How are hotel and air prices trending and outlook for the rest of the year?
  Response: Domestic hotel and air face pricing pressure; hotel price declines narrowed to mid–low single digits; outbound air fares softening YOY but still above 2019; outbound hotel prices stable.

• Question from Dapeng Gong (Citi): What are you seeing in consumer sentiment amid macro uncertainty?
  Response: Volumes are strong across domestic, outbound, and inbound with experiential demand, though ADR is slightly down.

• Question from Yang Liu (Morgan Stanley): Impact of Umetrip’s direct airline sales feature on your business?
  Response: Market is large; Trip.com will compete by doubling down on service quality and globalization with 24/7 support.

• Question from Wei Xiong (UBS): How do you assess competition (e.g., JD entry) and business impact?
  Response: They will avoid price wars and focus on superior service and comprehensive product breadth to sustain leadership.

• Question from Parash Jain (HSBC): Size and contribution outlook for Old Friends Club and travel-plus-entertainment?
  Response: Silver-travel could exceed $1T in 3–5 years; senior demand is strong and flexible; event-led travel demand exceeds supply, so investment will continue.

• Question from Jiong Shao (Barclays): More insights on the inbound travel opportunity to China?
  Response: China’s inbound was ~0.3% of GDP pre-COVID vs 1–5% elsewhere; with strong value proposition, promotion can unlock significant growth.

• Question from K. Y. Cheung (Goldman Sachs): Details on Trip.com international performance and long-term contribution?
  Response: Trip.com bookings rose >60% YOY with APAC leading and Middle East early traction; inbound grows triple digits; loyalty upgrades improve retention.

• Question from Wei Fang (Mizuho): Update on Trip.com marketing in Q2 and plans for 2025?
  Response: ROI-disciplined, app-first acquisition (app ~70% of global orders); dynamic budgeting; continue signature campaigns with disciplined spend.

• Question from Hyungwook Choi (Daiwa): How do aggressive competitor campaigns affect your H2 and 2026 marketing?
  Response: APAC’s size/fragmentation supports growth despite competition; Trip.com will scale via one-stop offerings and localized, demand-driven marketing.

• Question from Qiuting Wang (CICC): Update on buybacks and the new USD 5B program?
  Response: Repurchased ~7M ADRs, fully using this year’s quota; new multi-year $5B buyback aims to offset ESOP dilution and potentially reduce share count.