Tongcheng Travel Holdings (00780) Q1 2025 Earnings Call May 23, 2025 07:30 AM ET Company Participants Kylie Yeung - Investor Relations DirectorJoyce Li - VP & Head of Capital MarketsFan Lei - CFOBrian Gong - Internet & Media Research Conference Call Participants None - AnalystYue Tang - AnalystWei Xiong - Equity Research Analyst Operator Good day and thank you for standing by. Welcome to Tongcheng Travel twenty twenty five First Quarter Results Announcement. At this time, all participants are in a listen on ...

Financial Data and Key Metrics Changes - The company reported a net revenue of RMB4.4 billion, representing a 13.2% year-over-year increase from the same period in 2024 [27] - Adjusted net profit reached RMB788 million, reflecting a 41.1% year-over-year growth, with an adjusted net margin of 18% compared to 14.4% in the same period of 2024 [27] - The core OTA business revenue grew by 18.4% year-over-year, totaling RMB3.8 billion, driven by growth in accommodation reservation and transportation ticketing [27] Business Line Data and Key Metrics Changes - Transportation ticketing revenue was RMB2.0 billion, a 15.2% increase year-over-year [27] - Accommodation reservation business achieved RMB1.2 billion, representing a 23.3% increase from the same period in 2024 [28] - International accommodation business saw significant growth, contributing to overall performance [29] Market Data and Key Metrics Changes - The outbound travel segment accounted for over 5% of total transportation ticketing revenues, marking a year-over-year increase of three percentage points [28] - International room night sales and international air ticketing volumes increased by more than 40% year-over-year [46] Company Strategy and Development Direction - The company aims to deepen its domestic market presence while accelerating the expansion of its outbound travel business [7] - Plans to acquire Wanda Hotel Management Company to enhance influence within the hotel management sector and support sustainable growth [11] - Focus on technological advancements and integrating AI into business operations to improve service quality and efficiency [8] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the long-term prospects of China's travel industry, supported by government initiatives and changing consumer preferences [11][31] - The company plans to enhance user value and drive technological iteration to improve service efficiency [9] - Positive signals in the travel market, including increased ADR and consumer willingness to pay for quality accommodations, indicate a robust recovery [64] Other Important Information - The company has established a comprehensive hotel brand portfolio with over 2,500 hotels in operation and more than 1,400 in the pipeline [18] - The standalone app has seen a 60% year-over-year increase in daily active users, contributing significantly to user acquisition [20] Q&A Session Summary Question: Growth pattern of core OTA business in upcoming quarters - Management highlighted the resilience of the Chinese travel market and expects steady growth with healthy profitability, focusing on enhancing ARPU and optimizing marketing investments [36][38] Question: Forecast for outbound business growth - Outbound travel segment has shown remarkable growth, with international air ticketing revenue accounting for over 45% of total transportation ticketing revenue [46][48] Question: Impact of AI agent DeepTrip on user engagement - DeepTrip is still in early adoption stages, with innovative features being integrated to enhance user experience and engagement over time [49][50] Question: Update on standalone app performance - The standalone app has significantly contributed to user acquisition and revenue growth, with ongoing efforts to enhance user engagement and ARPU [54][58] Question: Macro uncertainties and travel demand sustainability - Despite macro uncertainties, management remains optimistic about the travel industry's growth, citing strong consumer demand and changing consumption patterns [63][64] Question: Rationale behind the acquisition of Wanda Hotel Management - The acquisition is seen as a strategic move to enhance the company's hotel management capabilities and leverage existing user insights for better marketing and operational efficiency [68][70]

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1）中金企信国际咨询（全称：中金企信（北京）国际信息咨询有限公司）为国家统计局涉外调查许可单位&AAA企业信用认证 机构，致力于"为企业战略决策提供行业市场占有率认证&证明、产品认证&证明、国产化率（认证&报告）、项目可行性&商业 计划书专业解决方案"的专业咨询顾问机构。 2）专精特新"小巨人"&单项冠军市场占有率、市场排名认证服务-中金企信国际咨询。 3）项目可行性报告&商业计划书专业权威编制服务机构（符合发改委印发项目可行性研究报告编制要求）-中金企信国际咨询： 集13年项目编制服务经验为各类项目立项、投融资、商业合作、贷款、批地、并购&合作、投资决策、产业规划、境外投资、 战略规划、风险评估等提供项目可行性报告&商业计划书编制、设计、规划、咨询等一站式解决方案。助力项目实施落地、提 升项目单位申报项目的通过效率。 4）中金企信国际咨询定制服务-依托自建数据库、专业自建调研团队及官方&各领域专家顾问、国内外官方及三方数据渠道资源 等为各领域客户提供专属定制类全套解决方案。 一、中国 OTA 行业：下沉与细分赛道驱动行业持续增长 旅游市场仍存增量空间：疫情后，国内旅游市场快速复苏。其中，我们认为四个方面因素 ...

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Group 1 - Booking Holdings' CFO Ewout Steenbergen will present at the Bank of America Securities 2025 Global Technology Conference on June 4th at 11:20 am PT / 2:20 pm ET [1] - A live audio cast of the presentation will be available to the public, with a replay accessible approximately 24 hours later [1] Group 2 - Booking Holdings is the world's leading provider of online travel and related services, operating in over 220 countries and territories [2] - The company operates five primary consumer-facing brands: Booking.com, Priceline, Agoda, KAYAK, and OpenTable [2] - The mission of Booking Holdings is to make it easier for everyone to experience the world [2]

Core Insights - Trip.com Group Ltd reported a 16% revenue growth in its first-quarter earnings, which is a slowdown from the previous quarter's 23% growth [2][4] - The company continues to gain market share domestically and is experiencing rapid growth internationally, particularly in Asia [2][4] - Analysts maintain a positive outlook with Buy ratings, with price targets raised to $73 and $80 by TD Cowen and Benchmark respectively [2][4] Financial Performance - Trip.com reported solid quarterly results with a year-on-year revenue growth of 16% and better-than-expected profitability [4] - The company reiterated its guidance for the second quarter and full year, targeting mid-teens growth, with international travel as a core driver [4] Marketing and Strategy - The company has increased its advertising spend to boost its international business, focusing on aggressive marketing strategies [3][5] - AI integration is expected to enhance user engagement and operational efficiency, improving both user experience and scalability [5] Stock Performance - Shares of Trip.com declined by 6.29% to $62.88 at the time of publication [5]

Core Insights - Tuniu predicts a rise in demand for local and nearby travel during the Dragon Boat Festival, with 47% of bookings for short trips [1] - Long-distance travel remains popular, accounting for 31% of total bookings [1] - Self-driving and high-speed rail travel are the preferred choices for nearby trips, making up over 80% of the travel volume [1] Group 1: Travel Trends - The demand for family-oriented travel is expected to surge due to the overlap of the Dragon Boat Festival and Children's Day [1] - Popular destinations for self-driving trips include major cities such as Shanghai, Guangzhou, Beijing, and Nanjing, among others [1] - The "cross-regional travel" demand is particularly strong in the Yangtze River Delta, Pearl River Delta, and Beijing-Tianjin-Hebei regions [1]

Financial Data and Key Metrics Changes - For Q1 2025, Trip.com Group reported a net revenue of RMB 13.8 billion, representing a 16% increase year over year and a 9% increase quarter over quarter, driven by strong travel consumption and resilient demand across segments [23] - Adjusted EBITDA grew by 7% year over year, reaching RMB 4.2 billion, compared to RMB 4 billion in the same period last year [13][27] - Diluted earnings per ordinary share were RMB 6.09 (US$0.84), while non-GAAP diluted earnings per share were RMB 5.90 (US$0.82) [27][28] Business Line Data and Key Metrics Changes - Accommodation reservation revenue for Q1 was RMB 5.5 billion, a 23% increase year over year and a 7% increase quarter over quarter [23] - Transportation ticketing revenue was RMB 5.4 billion, reflecting an 8% year over year increase and a 13% increase quarter over quarter [24] - Packaged tour revenue reached RMB 947 million, representing a 7% increase year over year and a 9% increase quarter over quarter [25] - Corporate travel revenue was RMB 573 million, a 12% increase year over year but an 18% decrease quarter over quarter, consistent with normal seasonality [26] Market Data and Key Metrics Changes - Inbound travel bookings surged by approximately 100% year over year, with hotel bookings from key visa-free countries in APAC increasing by over 240% [15][16] - Overall bookings on the international OTA platform grew by over 60% year over year, with APAC remaining a major growth engine [14] - Outbound air bookings returned to more than 120% of 2019 levels, outperforming the market by 30-40% [17] Company Strategy and Development Direction - The company is focusing on enhancing its AI capabilities to improve user experience and streamline the travel booking process, with AI tools integrated throughout the customer journey [10][11] - Trip.com aims to capture the growing inbound travel market by enriching its offerings and improving service capabilities, including multilingual support and personalized itineraries [9] - The company is committed to expanding its market presence in both mature and emerging markets, leveraging strategic partnerships and localized operations [8][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of travel demand, supported by strong consumer confidence and favorable policies [29] - The company anticipates continued growth in inbound travel due to favorable visa policies and increased accessibility to China [16][72] - Management noted that leisure travel demand remains strong, with corporate users expecting their travel budgets to grow or remain unchanged by 2025 [48] Other Important Information - The company has repurchased approximately US$84 million of its shares, demonstrating a commitment to delivering value to shareholders [28][80] - Trip.com has launched free city tours for transit travelers in Shanghai and Beijing to enhance visitor experience [17] Q&A Session Summary Question: Insights on AI in the travel industry - Management discussed the strengths of vertical AI agents in providing real-time travel data and enhancing the travel experience, while general AI agents offer broader information [31][32] Question: Performance during the Labor Day holiday - Domestic hotel bookings increased by over 20% year over year, with inbound bookings surging by approximately 150% [36][37] Question: Outbound travel trends and expectations - Outbound bookings have consistently outperformed the industry, with strong growth in long-haul destinations like Europe [39][40] Question: Hotel price trends and outlook - Hotel ADR decreased by high single digits in Q1, but prices stabilized during the Labor Day holiday, with expectations for stabilization due to increasing travel demand [43][44] Question: Consumer sentiment amid macroeconomic conditions - Travel demand remains resilient, with leisure travel demand strong and corporate travel budgets expected to grow or remain stable [47][48] Question: Domestic competitive landscape - Competition in the domestic market is rationalized, with a strong focus on loyalty programs and customer service [51][52] Question: International business marketing strategies - The company is intensifying marketing efforts in Asia, leveraging mobile app user acquisition as a key growth strategy [59][60] Question: Inbound business developments - Inbound travel has seen strong momentum due to favorable policies, with significant growth in bookings [70][72] Question: Sales and marketing expenses outlook - Marketing expenses may fluctuate due to seasonality, but the company aims to improve marketing efficiencies in the long term [75][76] Question: Capital return program updates - The company plans to continue share buybacks and has approved a total amount of US$600 million for this purpose [79][80]

Financial Data and Key Metrics Changes - For Q1 2025, Trip.com Group reported net revenue of RMB 13.8 billion, a 16% increase year over year and a 9% increase quarter over quarter, driven by strong travel consumption and resilient demand across segments [24][29] - Adjusted EBITDA for Q1 was RMB 4.2 billion, compared to RMB 4 billion in the same period last year and RMB 3 billion in the previous quarter, indicating continued operational efficiency improvement [27][29] - Diluted earnings per ordinary share were RMB 6.09 (US$0.84), while non-GAAP diluted earnings per share were RMB 5.90 (US$0.82) for Q1 2025 [28] Business Line Data and Key Metrics Changes - Accommodation reservation revenue for Q1 was RMB 5.5 billion, representing a 23% increase year over year and a 7% increase quarter over quarter [24] - Transportation ticketing revenue for Q1 was RMB 5.4 billion, reflecting an 8% increase year over year and a 13% increase quarter over quarter [25] - Packaged tour revenue for Q1 was RMB 947 million, a 7% increase year over year and a 9% increase quarter over quarter [25] Market Data and Key Metrics Changes - Inbound travel bookings surged by approximately 100% year over year, with hotel bookings from key visa-free countries in APAC increasing by over 240% [15][16] - Outbound hotel and air bookings returned to more than 120% of 2019 levels, outperforming the market by 30-40% [17] - Domestic hotel bookings continued to see double-digit growth year over year, indicating strong consumer appetite for local exploration [18] Company Strategy and Development Direction - The company is focusing on enhancing its AI capabilities to improve user experience and streamline the travel booking process, with AI tools like TripGenie seeing a 50% increase in average user session duration [9][11] - Trip.com aims to capture the growing inbound travel market by enriching its offerings and improving service capabilities, including multilingual support and personalized itineraries [8][15] - The company is committed to sustainable travel and rural revitalization, having built 34 country retreats to stimulate local economies [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of travel demand, supported by strong consumer confidence and favorable policies [29] - The company anticipates continued growth in both inbound and outbound travel, with a focus on capturing opportunities in emerging markets [7][24] - Management noted that leisure travel demand remains strong, with corporate users expecting their travel budgets to grow or remain unchanged by 2025 [50] Other Important Information - The company has repurchased approximately US$84 million of its shares, demonstrating a commitment to delivering value to shareholders [28][82] - The balance of cash and cash equivalents as of March 31, 2025, was RMB 92.9 billion (US$12.8 billion) [28] Q&A Session Summary Question: Insights on AI in the travel industry - Management discussed the strengths of vertical AI agents in providing real-time travel data and enhancing user experience, while general AI agents offer broader information [31][33] Question: Performance during Labor Day holiday - Domestic hotel bookings increased by over 20% year over year, with inbound bookings surging by approximately 150% [37] Question: Outbound travel trends and expectations - Outbound bookings have consistently outperformed the industry, with expectations for double-digit annual growth [40] Question: Hotel industry performance and pricing outlook - Hotel ADR decreased by high single digits in Q1, but prices stabilized moving into Q2, with expectations for stabilization due to increasing travel demand [44] Question: Consumer sentiment amid macro environments - Travel demand remains resilient, with leisure travel demand strong and business travel showing stable demand [50] Question: Domestic competitive landscape - Competition in the domestic market is rationalized, with a strong focus on loyalty programs and customer retention [54] Question: Insights into first quarter performance - Overall bookings increased by more than 60% year over year, with APAC as a top priority for growth [57] Question: International business marketing strategies - The company is intensifying marketing efforts in Asia, with a focus on direct app user acquisition proving most effective [61] Question: Inbound business developments - Inbound travel has seen strong momentum due to favorable policies, with significant growth in bookings [72] Question: Sales and marketing expenses outlook - Marketing expenses may fluctuate due to seasonality, but the company aims to improve efficiencies through increased direct mobile traffic [78] Question: Capital return program - The company plans to continue share buybacks and has already returned US$200 million in cash dividends to shareholders [82]