Trip.com Group’s Q1 2025 Earnings Call Highlights Growth

Trip.com Group Ltd. Sponsored ADR ((TCOM)) has held its Q1 earnings call. Read on for the main highlights of the call.

Trip.com Group Ltd. Reports Strong Q1 2025 Performance with Strategic Growth Initiatives

The recent earnings call for Trip.com Group Ltd. highlighted a strong performance in the first quarter of 2025, marked by significant growth in inbound travel and international operations. The company effectively leveraged AI technology to enhance user engagement, despite facing challenges in corporate travel revenue and fluctuating marketing expenses. Overall, the strategic initiatives and operational efficiencies contributed to robust financial results, underscoring a commitment to returning value to shareholders.

Strong Growth in Inbound Travel

Trip.com Group reported a remarkable surge in inbound travel bookings, which increased by approximately 100% year-over-year. This growth was primarily driven by key source markets such as South Korea, Thailand, Malaysia, and Indonesia. The strategic push from China to attract international visitors played a crucial role in this expansion.

AI-Driven User Engagement

The company’s AI agent, TripGenie, significantly enhanced user engagement, with a 50% increase in average user session duration. AI chatbots and self-service tools managed over 80% of inquiries, leading to improved response times and higher customer satisfaction.

Revenue and EBITDA Growth

Trip.com Group’s financial performance was strong, with net revenue rising by 16% year-over-year to RMB13.8 billion. Adjusted EBITDA also saw a 7% increase year-over-year, reflecting continued improvements in operational efficiency.

Strong International OTA Platform Performance

The international OTA platform experienced over 60% growth in travel bookings year-over-year, with the Asia-Pacific region serving as a major growth engine. This highlights the company’s successful expansion in international markets.

Robust Mobile Platform Contributions

The mobile platform has become a significant contributor to the company’s success, accounting for 70% of international bookings. This trend underscores the growing preference for app-based travel planning among users.

Resilient Domestic Travel Demand

Domestic travel demand in China remained strong, with domestic hotel bookings experiencing double-digit growth year-over-year. This reflects a continued appetite for local exploration among Chinese travelers.

Expansion in Inbound Market Offerings

Trip.com Group expanded its inbound market offerings by launching free city tours for transit travelers in Shanghai and Beijing. Additionally, the company is upgrading offline stores into multilingual service centers to better cater to international visitors.

Successful Capital Return Program

Demonstrating its commitment to shareholder value, Trip.com Group repurchased approximately $84 million of its shares. This move is part of a broader strategy to deliver value to shareholders.

Challenges in Corporate Travel Revenue

Corporate travel revenue for the first quarter was RMB573 million, marking a 12% increase year-over-year but an 18% decrease quarter-over-quarter. This decline is attributed to normal seasonality in the corporate travel segment.

Muted Hotel ADR Performance

The average daily rate (ADR) for hotels saw a decrease by high single digits in the first quarter compared to last year. This was due to challenges in price stabilization within the hotel sector.

Sales and Marketing Expense Fluctuations

Adjusted sales and marketing expenses rose by 30% from the same period last year. This increase was mainly driven by intensified marketing efforts aligned with the company’s business expansion strategies.

Forward-Looking Guidance

Looking ahead, Trip.com Group remains optimistic about capturing further growth opportunities, supported by strong consumer confidence and favorable travel policies, such as China’s 240-hour visa-free transit policy. The company continues to focus on operational efficiency and AI-driven enhancements, with AI tools handling a significant portion of customer inquiries. Additionally, the company is committed to shareholder value, having repurchased $84 million worth of shares and distributed $200 million in cash dividends.

In conclusion, Trip.com Group’s earnings call for the first quarter of 2025 reflects a positive sentiment, driven by strong growth in inbound travel and international operations. The company’s strategic initiatives, particularly in AI technology and mobile platform usage, have contributed to robust financial results. Despite some challenges, Trip.com Group remains committed to delivering value to shareholders and capturing future growth opportunities.