Trip.com targets 100% growth in inbound hotel bookings over next 3 years as inbound travel surges

Earnings Call Insights: Trip.com Group Limited (TCOM) Q2 2025

MANAGEMENT VIEW

* Jianzhang Liang, Co-Founder & Executive Chairman, highlighted the "outstanding momentum" in China's inbound travel, reporting that "Trip.com Group's inbound travel bookings increased by over 100% year-over-year, driven primarily by demand from Korea and Southeast Asia." Liang noted the segment's significant growth potential, with inbound travel accounting for less than 0.5% of China's GDP and emphasized the company's commitment to empowering SMEs and leveraging AI for travel-focused experiences.
* Liang detailed the upgrade of Trip.Planner, stating it now delivers "a highly personalized and intelligent planning experience" using AI, with real-time integration of transportation, accommodation, dining, and attractions, as well as interactive maps and expert consultant support.
* CEO Jie Sun reported that "net revenue in Q2 increased by 16% year-over-year, reflecting healthy demand across our key markets and business segments," and said adjusted EBITDA was up 10% year-over-year. Sun provided operational highlights, including the launch of China's first inbound travel service center at Beijing Capital International Airport, designed as a multilingual, one-stop hub for international visitors.
* Sun announced the [Intelli-Trip] initiative, aiming to partner with 200,000 hotels over the next 3 years, targeting "100% growth in inbound bookings, new users and efficiency as we drive stronger industry growth." She added, "In Q2, both the number of users in our Old Friends Club and their total GMV grew by over 100% since year-end 2024."
* CFO Xiaofan Wang stated, "For the second quarter of 2025, Trip.com Group reported a net revenue of RMB 14.8 billion, representing a 16% increase from the same period last year and a 7% increase from the previous quarter, primarily due to strong travel demand across segments." Wang also noted, "As of June 30, 2025, the balance of cash and cash equivalents, restricted cash, short-term investment, held-to-maturity time deposits and financial products was RMB 94.1 billion or USD 13.1 billion."
* Wang announced that the Board approved a new share repurchase program, authorizing "the company to repurchase up to an aggregate of USD 5 billion of its outstanding shares."

OUTLOOK

* Management expects inbound travel to become a key growth engine, with Sun stating, "As visa policies continue to ease and China's global appeal rises, we expect inbound travel to become a key growth engine for our business."
* Sun outlined the plan to "partner with 200,000 hotels over the next 3 years, targeting 100% growth in inbound bookings, new users and efficiency."
* No explicit forward-looking EPS or revenue figures were stated for future quarters in the transcript.

FINANCIAL RESULTS

* Wang reported net revenue of RMB 14.8 billion for Q2 2025, a 16% year-over-year and 7% quarter-over-quarter increase. Accommodation reservation revenue was RMB 6.2 billion, up 21% year-over-year and 12% quarter-over-quarter. Transportation ticketing revenue was RMB 5.4 billion, with an 11% year-over-year increase. Packaged tour revenue was RMB 1.1 billion, up 5% year-over-year and 14% quarter-over-quarter. Corporate travel revenue reached RMB 692 million, a 9% increase year-over-year and 21% quarter-over-quarter.
* Adjusted EBITDA was RMB 4.9 billion for Q2, compared to RMB 4.4 billion in Q2 last year and RMB 4.2 billion in Q1 2025. Diluted earnings per ordinary share and per ADS were RMB 6.97 or USD 0.97. Non-GAAP diluted earnings per ordinary share and per ADS were RMB 7.20 or USD 1.01.
* Wang stated, "The company has completed share repurchases totaling approximately USD 400 million, fully utilizing the authorized quota for the year."

Q&A

* Alex C. Yao, JPMorgan: Questioned AI and content strategy; Jianzhang Liang explained that "AI enhances content by delivering personalized intelligent recommendations for travel planning" and that the upgraded Trip.Planner "delivers highly personalized, data-driven suggestions that are easily editable."
* Lixin Ju, BofA Securities: Asked about summer booking momentum and cross-border travel trends; Jie Sun responded, "For domestic travel, volume growth is very strong... outbound travel... we have already recovered to more than 120% compared to pre-COVID level."
* Thomas Chong, Jefferies: Inquired about hotel and air ticket price trends; Sun said, "both the domestic hotel and air ticket prices continued to face pricing pressure despite healthy volume growth... the domestic hotel price has been stabilizing."
* Dapeng Gong, Citi: Asked about consumer sentiment amid macro uncertainties; Sun noted "strong volume growth across all of the markets. However, it's partially offset by a slight decrease in ADR."
* Yang Liu, Morgan Stanley: Questioned impact of direct airline sales feature by Umetrip; Sun replied, "the market is very big... as long as we focus on providing the best products and excellent services... we'll be able to provide the best service and excellent products to our consumers."
* Wei Xiong, UBS: Asked about competition with JD and other OTAs; Sun reiterated, "We are not supportive of pure price competition... our strategy has always been focusing on excellent services, focusing on comprehensive product offerings."
* Parash Jain, HSBC: Inquired about the Old Friends Club and travel plus entertainment initiatives; Sun forecasted, "in the next 3 to 5 years, that market can grow into $1 trillion-plus markets." She noted "demand is exceeding the supply as of now."
* Jiong Shao, Barclays: Asked about inbound travel potential; Sun responded, "Pre-COVID, the inbound business only accounted for 0.3% for China inbound business. So there is a great potential if we do a very good job to promote that business."
* K. Y. Cheung, Goldman Sachs: Sought details on international performance; Sun stated, "the bookings on the Trip.com increased by over 60% year-over-year... The APAC region remain to be our operational focus."
* Wei Fang, Mizuho: Requested update on Trip.com international marketing; Sun said, "our rapid growth reflected the effectiveness of our marketing strategy... our native mobile app accounted for approximately 70% of our global orders."
* Hyungwook Choi, Daiwa: Asked about international marketing spend amid competition; Sun explained, "The APAC market offers vast potential... we aim to expand our presence in the APAC region and accelerate our growth."
* Qiuting Wang, CICC: Requested update on buyback programs; Sun stated, "we have repurchased around 7 million ADRs... fully utilized the authorized quota for this year... this quarter, we announced a new share repurchase program of USD 5 billion."

SENTIMENT ANALYSIS

* Analysts pressed for details on market trends, competition, pricing, and strategic growth initiatives, with several congratulating management but probing on risks and market shifts. The sentiment was neutral to slightly positive, with recurring focus on competitive threats and volume growth sustainability.
* Management maintained a confident and optimistic tone in both prepared remarks and Q&A, frequently referencing "strong momentum," "highly optimistic," and "commitment" to growth, but acknowledged pricing pressures and macro challenges. The tone was consistent with the previous quarter, continuing to emphasize operational resilience and opportunity.
* Compared to the previous quarter, both analysts and management sustained a similar confidence level, though management added more emphasis on inbound travel and strategic initiatives for future growth.

QUARTER-OVER-QUARTER COMPARISON

* Inbound travel growth accelerated, with inbound bookings up over 100% year-over-year compared to Q1's approximately 100%. Management increased its focus on inbound travel as a strategic growth engine and launched new initiatives like the inbound travel service center at Beijing Capital International Airport.
* Revenue growth remained steady at 16% year-over-year in both Q1 and Q2, while adjusted EBITDA growth accelerated from 7% in Q1 to 10% in Q2.
* Management guidance language became more assertive on inbound travel and hotel partnerships, with a new 3-year growth target for inbound hotel bookings and user expansion.
* Analysts continued to focus on competition, AI strategy, and volume trends, but raised more questions on pricing pressure and direct airline initiatives this quarter.
* Management expanded on AI, content, and technology initiatives, and introduced a significantly larger share repurchase program compared to Q1.

RISKS AND CONCERNS

* Management cited pricing pressure on domestic hotels and air tickets, noting a "slight decrease in ADR" and "pricing pressure despite healthy volume growth."
* Analysts questioned the impact of increased competition from new entrants and direct airline sales platforms.
* Sun acknowledged that "competition is increasing" but reiterated a focus on service quality and comprehensive offerings rather than engaging in price wars.
* Macro uncertainties and consumer sentiment were highlighted, with Sun stating "macro uncertainties" are partially offsetting ADR gains, though overall volume remains strong.

FINAL TAKEAWAY

Trip.com Group reported robust growth in Q2 2025, driven by surging inbound travel, strong international expansion, and accelerated adoption of AI solutions across its platform. Management unveiled ambitious targets for the next three years, aiming to partner with 200,000 hotels and double inbound bookings and user numbers through strategic initiatives like [Intelli-Trip] and expanded service offerings. While competitive and pricing pressures persist, the company’s expansion of its share repurchase program and continued investment in service and technology underscore confidence in long-term growth and shareholder value creation.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/tcom/earnings/transcripts]

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