Financial Data and Key Metrics Changes - The company achieved record high revenue of $1.9 billion in 2025, reflecting a 3% growth year-over-year, with a group adjusted EBITDA of $319 million, or 17% of revenue [4][19] - In Q4, consolidated revenue was $411 million, flat compared to the previous year, with adjusted EBITDA of $45 million, or 11% of revenue [19][20] - Experiences segment revenue grew 10% to $204 million in Q4, while full-year revenue reached $924 million, also a 10% increase [23][28] Business Line Data and Key Metrics Changes - Marketplace businesses represented 61% of group revenue in 2025, with experiences expected to contribute over 50% of revenue and roughly 40% of adjusted EBITDA in 2026 [5][6] - TheFork segment revenue grew 18% in Q4 to $57 million, with full-year revenue of $221 million, representing a 22% increase [28][29] - Hotels and other segment revenue declined 15% in Q4 to $151 million, with a full-year decline of 8% to $750 million [29][30] Market Data and Key Metrics Changes - The experiences market is expected to grow by double digits over the next few years, with the online portion growing at 13% from 2019 to 2025 [8][47] - The company reported that repeat bookings are the fastest-growing cohort, comprising the majority of gross booking value (GBV) [24][12] - TheFork's B2B subscription revenue grew significantly, driven by the adoption of higher-priced premium plans by restaurants [16][28] Company Strategy and Development Direction - The company is focusing on becoming an experiences-first company, streamlining legacy offerings while exploring strategic alternatives for TheFork [6][7] - Plans include leveraging AI to enhance customer experience and optimize marketing efficiency, with a goal to simplify operations and improve profitability [14][18] - The company aims to extend its leadership in the experiences market globally and invest in capturing more market share [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the experiences market, citing strong demand signals and the ability to exceed market growth rates [47][50] - The company anticipates modest consolidated revenue growth in 2026, driven by a shift towards marketplace businesses, while facing headwinds in legacy segments [36][39] - Management highlighted the importance of repeat customers and the potential for increased profitability through improved marketing efficiencies [24][56] Other Important Information - The company repurchased 6.1 million shares in 2025, reducing share count by approximately 21% since the end of 2024 [34] - Operating cash flow for the full year was $245 million, with free cash flow of $163 million, reflecting strong cash generation capabilities [33] Q&A Session Summary Question: Can you characterize the incremental growth investments in the experiences business? - Management sees the experiences market as attractive and growing faster than other travel categories, with plans to invest in marketing to capture demand [46][47] Question: Regarding experiences margin expansion, why not focus on customer acquisition instead of margin? - Management emphasized the balance between growth and profitability, focusing on marketing efficiencies and repeat customer growth [54][56] Question: Can you elaborate on the AI native MVP launched in Q4? - The AI native MVP aims to enhance personalization and user engagement, leveraging user-generated content to build trust and improve conversion rates [64][68] Question: What are the economics behind traffic from large AI platforms compared to traditional SEO? - Management noted that AI-driven traffic tends to be higher intent, leading to stronger conversions, and they are excited about the growth potential in this area [70][72] Question: How is the geographic expansion for experiences being approached? - The company is focusing on building supply in new markets while also marketing North American experiences in new points of sale [76][80]

Summary of Tongcheng Travel Holdings Conference Call Company Overview - **Company**: Tongcheng Travel Holdings (0780.HK) - **Industry**: Online Travel Services in China Key Points and Arguments 1. Financial Performance and Guidance - **4Q25 GMV Growth**: Accelerated to high-single digit % year-over-year, compared to mid-single digit % in 3Q25, primarily driven by the hospitality segment [1] - **Hotel ADR Increase**: Low-to-mid single digit % increase in Average Daily Rate (ADR) on the platform, attributed to a slowdown in hotel supply [1] - **Ticketing Business Performance**: Tracking low-to-mid single digit % year-over-year growth, aligning with broader industry trends due to high online penetration rates of 80-90% [1] - **4Q25 Revenue Guidance**: Expected revenue growth of 10-15%, with 15-20% from Online Travel Agency (OTA) services and a stable EBIT margin of 28.4% [1] 2. Strategic Focus for 2026 - **Leisure Travel Demand**: Management is optimistic about resilient demand supported by favorable policies, such as more school holidays [2] - **User Base Monetization**: Targeting existing 252 million user base with promotions and subsidies; users are willing to spend more on upgraded services [2] - **Outbound Travel Business**: Currently represents ~5% of group revenue but has reached breakeven profitability; plans to prioritize air ticket bookings before expanding into hospitality [2] - **Mobile App Development**: Mobile apps account for ~10% of Monthly Active Users (MAU), up from 5% in 2023, reducing reliance on Weixin platform from ~80% to 75% [2] 3. Competitive Landscape - **Competition Analysis**: Competition remains benign with smaller operators focusing on niche markets; it will take time for them to build supply chains and customer service teams [3] 4. Margin Improvement Potential - **EBIT Margin Improvement**: Potential for further improvement driven by increased GMV contribution from mobile app users, improved profitability from hotel management and outbound travel, and operational efficiency through AI adoption [7] 5. Market Sentiment and Valuation - **Share Price Performance**: The share price has been range-bound due to concerns over domestic competition and profit margin comparisons [8] - **Valuation Metrics**: Current trading at 13x FY26E P/E, representing a 24% discount to 17x for TCOM, in line with historical averages [8] 6. Price Target and Risks - **Price Target**: 12-month target price set at Rmb28.8, based on an 85% weighting to fundamental value and a 15% weighting to M&A value [9] - **Downside Risks**: Increased competition, potential decline in transportation take rates, reliance on Tencent/WeChat, and weaker macroeconomic conditions [10] 7. Investment Thesis - **Investment Recommendation**: Rated as a Buy due to leverage on resilient domestic travel, upside from hospitality segment, and ongoing business initiatives that could drive earnings growth [11] Additional Insights - **Market Capitalization**: HK$52.6 billion / $6.7 billion [13] - **Revenue Forecasts**: Expected revenue growth from Rmb17,340.7 million in FY24 to Rmb24,372.1 million in FY27 [13] - **Free Cash Flow Yield**: Projected to increase from 6.8% in FY25 to 10.5% in FY27 [13]

Core Insights - The travel industry is undergoing a significant transformation by 2026, driven by personalization, technology, and cultural influences [1][8]. Group 1: Pet Travel - The proportion of global pet owners has reached 56%, with nearly half being first-time owners, leading to the emergence of the "paw print economy" [2][18]. - Innovations in pet travel include pet-friendly trains, airlines allowing medium-sized dogs in cabins, and the reintroduction of pet passports to simplify cross-border travel [2][24]. - High-end services such as private pet charters and AI-enabled health monitoring for pets are becoming more prevalent, emphasizing the dignity and comfort of pets during travel [2][26][33]. Group 2: AI and Trip Planning - The use of generative AI tools for trip planning has surged by 64% in one year, but travelers still prefer a mix of AI recommendations and human experiences [3][35]. - The trend of "travel mixology" highlights the importance of blending machine intelligence with human insights to create reliable travel plans [3][35]. Group 3: Aviation Innovations - Advances in aviation technology, particularly long-range narrow-body jets like the Airbus A321XLR, are enabling direct flights to secondary cities and previously underserved destinations [4][10]. - This shift is creating new economic opportunities for destinations and enhancing the overall travel experience with innovations like seamless biometric identification at airports [4][10]. Group 4: Cultural Influences on Travel - Popular culture is increasingly influencing travel decisions, with destinations linked to hit movies or shows seeing significant increases in bookings, such as a 19% rise in Seoul tourism due to a popular film [5][10]. - Travel agencies are capitalizing on this trend by offering themed tours and immersive experiences that connect travelers with cultural content [5][10]. Group 5: Customizable Hotel Experiences - The hotel industry is moving towards "self-selecting accommodation," allowing guests to customize their stay by choosing specific room features and amenities [6][10]. - Over 60% of travelers are willing to pay extra for specific room attributes, indicating a shift towards personalized hotel experiences [6][10]. Group 6: Future-Oriented Travel Experiences - There is a growing interest among travelers in experiencing cutting-edge technologies, such as autonomous vehicles and immersive digital art, as part of their travel plans [7][10]. - More than half of global travelers express interest in future transportation methods like supersonic flights and hyperloop systems, indicating a desire for innovative travel experiences [7][10].

Financial Data and Key Metrics Changes - In Q3 2025, the company reported a net revenue of RMB 5.5 billion, reflecting a year-over-year increase of 10.4% [18] - Adjusted net profit reached RMB 1,060 million, marking a 16.5% year-over-year growth, with an adjusted net margin expanding to 19.2% from 18.2% [19][22] - Gross profit increased by 14.4% year-over-year to RMB 3.6 billion, with a gross margin of 65.7% [22] - Annual paying users reached a historic high of 253 million, representing a year-over-year growth of 8.8% [11] Business Line Data and Key Metrics Changes - The accommodation reservation business achieved RMB 1.6 billion in revenue for Q3 2025, a 14.7% increase from the same period in 2024, driven by increased hotel room nights sold [19] - Transportation ticketing revenue reached RMB 2.2 billion, marking a 9.0% year-over-year increase [20] - Other business segments, including hotel management, saw revenue grow to RMB 821 million, a 34.9% year-over-year increase [21] Market Data and Key Metrics Changes - The international air ticketing business accounted for around 6% of total transportation ticketing revenue, up about two percentage points year-over-year [21] - The company noted a significant increase in the proportion of higher-quality accommodation bookings, with over 20% growth in room nights sold [38] Company Strategy and Development Direction - The company aims to enhance user value and operational efficiency in its domestic business while expanding its outbound business and strengthening its global market presence [24][25] - Following the acquisition of Wanda Hotel Management, the company plans to integrate its operations to accelerate growth in the hotel management segment [6][32] - The focus remains on technological innovation to drive product and service upgrades, ensuring high-quality travel experiences for users [5] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience and growth potential of China's travel industry, driven by changing consumer behaviors and preferences [3][5] - The company anticipates continued growth in the outbound travel segment, targeting a revenue contribution of 10%-15% in the coming years [30] - Management remains committed to balancing market expansion with profitability, aiming for robust growth in both top line and bottom line [24][25] Other Important Information - The company has achieved an MSCI ESG rating of AAA, placing it among the top 5% of companies globally in its industry [15] - The standalone app has seen strong growth, with daily active users hitting nearly 5 million before the National Day holidays [12] Q&A Session Summary Question: Future growth engines regarding international business and hotel management - Management highlighted that the outbound business is a key growth driver, with expectations for rapid growth and profitability in the coming years [29][30] - The hotel management business is expected to expand significantly, with a focus on integrating the Wanda brand and enhancing operational efficiency [32][33] Question: Future hotel ADR trends and competition in the domestic market - Management noted that domestic ADR has stabilized and is expected to improve, driven by a shift towards higher-quality accommodations [38] - The company believes its established supply chain and user understanding provide a strong competitive advantage against new entrants [42][43] Question: Margin trends and AI technology impact - Management indicated that margin expansion remains a priority, supported by improved operational efficiency and AI integration [55][58] - AI technology is seen as beneficial for enhancing operational efficiency and user experience, with ongoing investments planned [59][60] Question: Impact of recent events in Japan on business performance - Management does not expect a material impact on overall performance but will monitor developments closely and adjust strategies as needed [64]

Financial Data and Key Metrics Changes - Trip.com Group reported a net revenue of RMB 18.3 billion for Q3 2025, representing a 16% increase year-over-year and a 24% increase quarter-over-quarter [18] - Adjusted EBITDA for Q3 was RMB 6.3 billion, compared to RMB 5.7 billion in the same period last year and RMB 4.9 billion in the previous quarter [20] - Diluted earnings per ordinary share were RMB 28.61 or $4.02, elevated due to a one-time gain from the divestment of an overseas investment [21] Business Line Data and Key Metrics Changes - Accommodation reservation revenue increased by 18% year-over-year to RMB 8.0 billion, driven by strong outbound and international hotel bookings [18] - Transportation ticketing revenue rose by 12% year-over-year to RMB 6.3 billion, with international air bookings showing robust growth [18] - Package tour revenue grew by 3% year-over-year to RMB 1.6 billion, primarily due to the expansion of international offerings [19] Market Data and Key Metrics Changes - Outbound hotel and air bookings grew by close to 20% year-over-year, reaching about 140% of 2019 volumes [8] - Inbound travel bookings on the platform grew by over 100% year-over-year, reflecting robust international demand [10] - The Asia-Pacific region remains the largest source of inbound travelers, with international bookings growing around 60% year-over-year [11] Company Strategy and Development Direction - The company aims to leverage AI innovation to enhance travel experiences and improve service delivery [6][17] - Trip.com Group is focusing on expanding its international presence, particularly in the Asia-Pacific region, while also enhancing domestic services [40] - The company is committed to nurturing the broader travel ecosystem and supporting local economic development through strategic partnerships [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future of travel, citing strong demand and a growing desire for immersive experiences [5][6] - The company plans to continue investing in AI and technology to enhance customer service and operational efficiency [26] - Management noted that challenges in the market present opportunities for strengthening the company's foundation and expanding its market share [40] Other Important Information - The company launched a free layover experience for travelers at Hong Kong International Airport, enhancing its offerings for international visitors [11] - The number of Old Friends Club members and their total GMV rose over 70%, indicating a growing focus on senior travelers [12] Q&A Session Summary Question: Insights on AI's role in Trip.com's strategy - Management highlighted AI as a central pillar of their strategy, with significant growth in the use of AI-driven tools like Trip Genie, which is now used in over 200 countries [24][25] Question: Consumer behavior trends during national holidays - Management noted strong trends for long stays and long-distance travel during the national holiday, with outbound bookings increasing over 30% year-over-year [30] Question: Recent trends in hotel and air ticket prices - Management indicated that hotel and air ticket prices have shown a slight decline, with domestic prices trending higher during peak travel periods [34] Question: Insights on international performance and regional highlights - Management reported a 60% year-over-year increase in international bookings, with Asia-Pacific being the largest contributor [50] Question: Updates on inbound travel business - Management shared positive feedback from inbound customers regarding safety and hospitality, highlighting the growth potential in this segment [54] Question: Marketing strategy and future plans - Management discussed the effectiveness of their marketing strategy in Q3 and plans to continue executing signature campaigns for upcoming global holidays [60] Question: Impact of competition and market dynamics - Management emphasized the favorable environment for online travel companies in the Asia-Pacific region, focusing on delivering one-stop solutions and exceptional customer service [63]

Financial Data and Key Metrics Changes - Trip.com Group reported a net revenue of RMB 18.3 billion for Q3 2025, representing a 16% increase year-over-year and a 24% increase quarter-over-quarter, driven by robust travel demand [18] - Adjusted EBITDA for Q3 was RMB 6.3 billion, compared to RMB 5.7 billion in the same period last year and RMB 4.9 billion in the previous quarter [20] - Diluted earnings per ordinary share were RMB 28.61 or $4.02, elevated primarily due to a one-time gain from the divestment of an overseas investment [21] Business Line Data and Key Metrics Changes - Accommodation reservation revenue for Q3 was RMB 8.0 billion, an 18% increase year-over-year and a 29% increase quarter-over-quarter, driven by strong outbound and international hotel bookings [18] - Transportation ticketing revenue was RMB 6.3 billion, a 12% increase year-over-year and a 17% increase quarter-over-quarter, with international air bookings showing robust growth [18] - Package tour revenue was RMB 1.6 billion, a 3% increase year-over-year and a 49% increase quarter-over-quarter, primarily due to the expansion of international offerings [19] Market Data and Key Metrics Changes - Outbound hotel and air bookings grew by close to 20% year-over-year, reaching about 140% of 2019 volumes, with Japan, South Korea, and Southeast Asia being popular destinations [8] - Inbound travel bookings grew by over 100% year-over-year, reflecting robust international demand [10] - Mobile bookings accounted for over 70% of total bookings, indicating a shift towards mobile platforms among travelers [12] Company Strategy and Development Direction - The company aims to leverage AI innovation to enhance travel experiences, with a focus on personalized services and operational efficiency [6][26] - Trip.com Group is expanding its international presence, particularly in the Asia-Pacific region, and is committed to investing in inbound travel and catering to senior and younger travelers [40][56] - The company is enhancing its product offerings and services to meet diverse traveler needs, including partnerships with live entertainment companies to drive travel experiences [15][70] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future of travel, citing strong demand and a growing desire for immersive experiences among travelers [5][17] - The company is focused on sustainable growth and long-term value creation, with plans to enhance services and empower the broader travel ecosystem [22][40] - Management noted that challenges in the market present opportunities for strengthening the company's foundation and expanding its market share [40] Other Important Information - The company launched initiatives like the "Taste of China" dining experience to attract international visitors and enhance inbound travel [6] - The balance of cash and cash equivalents as of September 30, 2025, was RMB 107.7 billion or $15.1 billion, indicating a strong liquidity position [22] Q&A Session Summary Question: Insights on AI's role in Trip.com's strategy - Management emphasized that AI is a central pillar of their strategy, with significant growth in AI-driven tools and a commitment to enhancing the travel experience through technology [24][25] Question: Consumer behavior trends during national holidays - Management noted strong trends in long-haul and long-stay travel during holidays, with outbound bookings increasing significantly [30] Question: Recent trends in hotel and air ticket prices - Management indicated that hotel and air ticket prices have stabilized, with slight year-on-year declines, but are expected to remain under pressure due to expanding capacity [34] Question: Impact of competition in the travel market - Management highlighted that the travel market is evolving, and their investments in technology and customer service will help maintain a competitive edge [44] Question: Updates on international performance - Management reported a 60% year-over-year increase in international bookings, with a strong focus on the Asia-Pacific region [50] Question: Inbound travel growth catalysts - Management cited positive feedback from inbound travelers regarding safety and hospitality, along with favorable visa policies as key growth drivers [54] Question: Marketing strategy and future plans - Management discussed the effectiveness of their marketing strategy and plans to continue executing campaigns aligned with long-term growth objectives [60] Question: Margin outlook for the future - Management stated that it is too early to provide specific margin outlooks but emphasized ongoing improvements in operating efficiency [76]