Release Date: November 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Trip.com Group Ltd (TCOM, Financial) reported a 16% year-over-year increase in net revenue for Q3 2024, driven by strong travel market performance during the summer and National Day holiday.
- Outbound hotel and air ticket bookings recovered to 120% compared to 2019 levels, outperforming the industry by 40%.
- The company has seen significant growth in international markets, with air ticket and hotel bookings on its international OTA platform rising by over 60% year over year.
- Trip.com Group Ltd (TCOM) has been recognized with the Forbes China Best AI-driven and Digitized Employer of the Year 2024 Award, highlighting its commitment to integrating AI into its operations.
- The company has successfully expanded its presence in the APAC region, with its international OTA app becoming the most downloaded in several markets, including Hong Kong, Macau, and South Korea.
Negative Points
- Hotel prices are still below last year's levels, although the gap has narrowed to mid- to low single digits.
- Outbound flight capacity has only reached around 80% of the 2019 level, indicating a slower recovery in this segment.
- The growth rate of hotel suppliers on Trip.com Group Ltd (TCOM)'s platform is normalizing, reflecting potential challenges in maintaining rapid expansion.
- The financial impact of AI investments is still minimal, and quantifying the benefits remains challenging.
- Marketing expenses are expected to increase in Q4 due to seasonality and fluctuations in revenue mix between China and international businesses.
Q & A Highlights
Q: Could you provide some insight into your recent performance following the National Day holiday and expectations for 2025?
A: After the National Day holiday, the China travel market showed normal seasonality with strengthened year-over-year momentum. Occupancy rates have surpassed last year's levels. Outbound flight and hotel bookings maintained strong growth, exceeding 120% of 2019 levels. For 2025, we anticipate normalized growth patterns for China-related business, with a focus on inbound and outbound cross-border travel. Trip.com will continue strong growth in Asia and global markets. - Xiaofan Wang, CFO
Q: How have hotel prices changed, and has the growth of China hotel inventory slowed down?
A: Hotel prices are still below last year's levels, but the gap has narrowed to mid- to low single digits. The hotel supplier growth on our platform continues, reflecting long-term market confidence, though the growth rate is normalizing. By the end of Q3, the number of hotels in China listed on our platform was 67% higher than last year. - Xiaofan Wang, CFO
Q: Could you update on the outbound flight capacity changes for the summer and Q4?
A: Outbound flight capacity reached around 80% of 2019 levels in Q3 and exceeded 80% in Q4. While some airlines reduced flights during the off-peak season, we saw increases from certain airlines and countries, such as Canada. We expect capacity to further improve next year. - Xiaofan Wang, CFO
Q: Have there been any changes in traveler spending, and have recent stimulus measures boosted travel spending?
A: User average spending remains consistent with last year's level and is about 20% higher than pre-COVID 2019 levels. It's too early to determine the direct impact of recent stimulus measures, but a healthy economic environment should benefit the travel industry. - Xiaofan Wang, CFO
Q: Could you elaborate on Trip.com's strategy in Asia to gain market share?
A: Asia is crucial, representing 50% of GDP and travel industry growth. We focus on providing the best products and services, offering a one-stop shopping platform, 24/7 customer support, excellent app user experience, and leveraging our volume to offer good products globally. - Jane Sun, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
