Release Date: May 20, 2025
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 Q1 2025, indicating strong business momentum.
- Inbound travel bookings surged by approximately 100% year-over-year, driven by favorable visa policies and increased global visibility.
- AI-driven tools like TripGenie have enhanced user engagement, with a 50% increase in average user session duration.
- The company has successfully expanded its international presence, with overall travel bookings on its international OTA platform growing by over 60% year-over-year.
- Trip.com Group Ltd (TCOM) has a strong cash position, with cash and cash equivalents totaling RMB92.9 billion or USD12.8 billion as of March 31, 2025.
Negative Points
- Corporate travel revenue decreased by 18% quarter-over-quarter, reflecting normal seasonality but indicating potential volatility in this segment.
- Adjusted product development expenses increased by 14% year-over-year, driven by higher personnel-related costs.
- The company faces challenges from geopolitical tensions and forex volatility, which could impact outbound travel trends.
- Hotel ADR decreased by high single digits in Q1 2025 compared to the previous year, indicating pricing pressure in the hotel segment.
- Despite strong performance, the marketing expenses ratio may fluctuate due to seasonality and varying market conditions, impacting overall cost efficiency.
Q & A Highlights
Q: Could you share your perspective on how vertical AI agents compare to general AI agents within the travel industry? Additionally, how do you envision the future development of these technologies?
A: Vertical AI agents excel at providing real-time proprietary travel data and integrating products and services, while general agents offer broader information but rely on vertical OTAs for bookings. AI is crucial in Trip.com's strategy, with tools like TripGenie enhancing user engagement. We aim to be the most efficient and reliable one-stop travel service platform. - Jianzhang Liang, Executive Chairman of the Board
Q: Could management provide some color about your performance during the Labor Day holiday and the quarter-to-date?
A: We saw strong performance during the Labor Day holiday, with domestic hotel bookings increasing by over 20% and cross-border bookings growing by around 30%. Inbound bookings surged by approximately 150% year-over-year, indicating resilient leisure travel demand. - Xiaofan Wang, Chief Financial Officer
Q: Can you share insights on the outbound travel trend and your expectations for the full year, considering the current uncertain environment?
A: Cross-border flights from Mainland China recovered to 83-84% of 2019 levels, with expectations to exceed 90% by the end of 2025. Our outbound bookings outperform the industry, especially in long-haul destinations like Europe. Forex exchanges create a natural hedge for our inbound and outbound operations. - Xiaofan Wang, Chief Financial Officer
Q: How are hotel prices trending recently, and what is the outlook for the full year?
A: Hotel ADR decreased by high single digits in Q1 but stabilized in Q2, with prices dropping by low single digits during the Labor Day holiday. We expect increasing travel demand and normalizing supplier growth to stabilize hotel prices. - Xiaofan Wang, Chief Financial Officer
Q: Can you share insights on consumer sentiment in the context of the dynamic macro environment and geopolitical tensions?
A: Travel demand remains resilient across markets, with strong leisure travel demand and stable business travel trends. Corporate users expect their travel budgets to grow or remain unchanged by 2025, indicating stable demand. - Jie Sun, Chief Executive Officer
Q: Could you help us understand the current domestic competitive landscape and the impact of competitors' aggressive membership programs?
A: The domestic competition is rationalized, and our strong membership program provides competitive pricing and coverage. Our partners can offer customized services, with 80% of revenue from existing customers, extending our leadership. - Jie Sun, Chief Executive Officer
Q: Could you provide insights into the first quarter performance, both operationally and financially?
A: Trip.com achieved strong growth with bookings increasing by over 60% year-over-year. APAC remains a priority, and we are expanding in new markets like the Middle East. Cost efficiency is improving, and marketing ROI aligns with requirements. - Xiaofan Wang, Chief Financial Officer
Q: Could you elaborate on the latest developments in the inbound business and its current revenue contribution?
A: Inbound travel is supported by favorable policies like visa-free access for over 40 countries. We offer comprehensive inventory and competitive pricing, leading to strong momentum and three-digit growth in Q1. - Jie Sun, Chief Executive Officer
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
