Tongcheng Travel Reports Strong Growth Amid Challenges

Tongcheng Travel Holdings Limited ((HK:0780)) has held its Q3 earnings call. Read on for the main highlights of the call.

Tongcheng Travel Holdings Limited’s recent earnings call painted a picture of robust growth and strategic advancements, despite some challenges. The company reported significant increases in paying users, accommodation business performance, and international air ticketing, alongside successful acquisitions and ESG achievements. However, a decline in tourism business revenue and rising marketing expenses were noted as areas of concern.

Historic High in Paying Users

The earnings call revealed that Tongcheng Travel achieved a historic high in ending paying users, surpassing 250 million. This milestone underscores the company’s organizational agility and expanding brand influence, marking a significant achievement in its growth trajectory.

Accommodation Business Growth

Tongcheng’s accommodation business reached record highs in both daily room nights sold and quarterly revenue. The company experienced more than a 20% growth in high-quality accommodation room nights sold, highlighting its successful focus on premium offerings.

Successful Acquisition of Wanda Hotel Management

The acquisition of Wanda Hotel Management was completed, which is expected to accelerate Tongcheng’s growth trajectory and strengthen its hotel management business. This strategic move is anticipated to enhance the company’s competitive edge in the hospitality sector.

Increase in Annual Paying Users and ARPU

The company reported an 8.8% year-over-year growth in 12-month annual paying users, reaching 253 million. Additionally, the annual average revenue per user (ARPU) increased by 6% year-over-year to more than RMB 17.4, reflecting improved monetization strategies.

Strong Financial Performance

Tongcheng Travel’s financial performance was robust, with net revenue reaching RMB 5.5 billion, a 10.4% year-over-year increase. The adjusted net profit was RMB 1,060 million, a 16.5% growth, with an expanded adjusted net margin of 19.2%.

Expansion in International Air Ticketing

The international air ticketing business accounted for around 6% of total transportation ticketing revenue, marking an increase of about 2 percentage points year-over-year. This expansion highlights the company’s successful penetration into international markets.

ESG Achievements

Tongcheng achieved the highest level of AAA in the MSCI ESG rating and was recognized as an industry mover by S&P Global with a high CSA score. These achievements underscore the company’s commitment to sustainable and responsible business practices.

Decline in Tourism Business Revenue

Despite the positive trends, the tourism business revenue saw an 8% decline from the same period in 2024. This was attributed to safety concerns regarding travel to Southeast Asia and a strategic scaling back of pre-purchased business.

Increased Selling and Marketing Expenses

Selling and marketing expenses increased by 16.9% in the third quarter of 2025 compared to the same period in 2024, accounting for 31.0% of revenue. This rise in expenses poses a challenge to the company’s profitability.

Forward-Looking Guidance

Looking ahead, Tongcheng Travel is poised for sustainable growth, leveraging AI technologies to enhance operational efficiency and user experience. The company remains focused on expanding its market presence and improving its financial metrics, with a continued emphasis on high-quality accommodation and international air ticketing.

In conclusion, Tongcheng Travel Holdings Limited’s earnings call reflects a strong performance with significant growth across several key areas, despite facing some challenges. The company’s strategic initiatives and successful acquisitions position it well for future growth, while its commitment to ESG principles and technological advancements further enhance its market standing.