Tongcheng Travel Holdings (SEHK:00780) Q3 2025 Earnings Call November 25, 2025 06:30 AM ET Company ParticipantsThomas Chong - Regional Head of Internet and MediaHope Ma - CEOYang Liu - Executive DirectorKylie Yeung - Director of Investor RelationsNone - TranslatorJoyce Li - Chief Capital OfficerQiuting Wang - Senior AssociateJulian Fan - CFOConference Call ParticipantsBrian Gong - Internet and Media Research AnalystWei Xiong - Equity Research AnalystKylie YeungGood evening and good morning, everyone. Welcom ...

Core Insights - The report indicates that the travel consumption trends of the elderly population (aged 60 and above) are significantly different from younger groups, with higher spending on accommodation and a preference for mid to high-end hotels [1][2] - The "new generation of silver-haired" travelers are actively engaging in modern travel trends, including social media-driven travel experiences and customized travel options, showcasing a growing market segment [1][2] Group 1: Travel Spending and Preferences - Elderly users' average accommodation spending is over 30% higher than that of younger travelers, with a notable inclination towards high-end hotels [1] - The elderly demographic is a dominant force in luxury travel, with over 70% of luxury cruise users aged between 50 and 70, and more than 90% of high-ticket polar cruise customers falling within this age group [1] - The average spending per trip for the elderly is over 12,000 yuan, which is 25% higher than other age groups [1] Group 2: Seasonal Travel Trends - The travel themes and destination choices of the elderly exhibit clear seasonal patterns, with spring focused on flower viewing, summer on wellness retreats, and winter on warm-weather getaways [1] - Popular domestic travel destinations for the elderly include Beijing, Yunnan, Sichuan, Hunan, Guangxi, Guizhou, Chongqing, Shaanxi, Ningxia, and Hainan [1] Group 3: International Travel Trends - The elderly population shows a preference for short-haul international travel, with popular destinations including Hong Kong, Macau, Osaka, Tokyo, Bangkok, Luang Prabang, Kuala Lumpur, and Bali [2] - There is a growing demand for long-haul international travel among the "new generation of silver-haired" travelers, with popular destinations including Moscow, Budapest, Madrid, Rome, Berlin, Paris, London, Sydney, Wellington, and Amsterdam [2] - The international flight orders for the elderly demographic have increased by 19% year-on-year, with a notable rise in first-time international flight bookings [2]

Group 1 - The domestic tourism market experienced a surge during the 8-day National Day and Mid-Autumn Festival holiday, with "multi-destination tours" becoming a popular choice among travelers [1] - The average booking volume for transportation-related products increased by 5% year-on-year, while hotel, tour packages, and ticket bookings rose by 4.6% [1] - Emerging destinations saw significant growth in orders, with orders for Jingdezhen increasing by 60%, and orders for the Luzhou Wine Festival rising by 45% [1] Group 2 - The popularity of smaller cities is attributed to the opening of new highways and railways, enhancing travel convenience within a 300-kilometer radius [2] - The proliferation of AI assistants has made travel planning more accessible, with the AI product "Ask One" from Fliggy seeing a fivefold increase in daily users compared to the summer [2] - The AI photo guide feature experienced peak usage on October 3, providing professional audio explanations for various attractions [3] Group 3 - The number of users utilizing DeepTrip for travel planning significantly increased during the holiday compared to the May Day holiday, with major cities like Shanghai and Guangzhou showing the highest usage [3] - The top five provinces for travel planning using DeepTrip were Shandong, Jiangsu, Xinjiang, Yunnan, and Heilongjiang [3]

Core Insights - The report from Tongcheng Travel highlights a significant increase in long-distance travel during the 2025 National Day and Mid-Autumn Festival holidays, driven by both family visits and tourism demands [1][2] - Domestic air travel for segments over 3200 kilometers saw a 14% year-on-year increase, with Xinjiang emerging as a popular starting and destination point for these long-haul flights [2] - The trend of combining air and rail travel is growing, with over 30% of users opting for mixed travel methods during the holiday [3] Domestic Travel Trends - Domestic hotel bookings increased by over 65% year-on-year, with long-stay bookings (2 days or more) rising by over 52% [4] - Non-first-tier cities saw a nearly 90% increase in high-quality hotel bookings, significantly outpacing the overall growth in hotel reservations [5] - The search interest for popular scenic spots and theme parks in smaller cities has surged, with notable increases in bookings for family-friendly attractions [8] Transportation Developments - The introduction of new high-speed rail and highway projects has enhanced travel efficiency and connectivity to popular tourist destinations [7] - The combination of free highway access for small vehicles and various cultural tourism activities has stimulated domestic travel spending [7] International Travel Insights - There was a nearly 100% year-on-year increase in long-distance group tours abroad, particularly from non-first-tier cities, with European tours seeing a 140% rise [10] - The demand for high-quality group travel products has led to a 30% increase in the availability of premium options [10] - International hotel bookings for destinations in the Middle East, Africa, and Central Asia have shown significant growth, with Saudi Arabia and Egypt being among the fastest-growing markets [10]

Core Insights - The collaboration between Tongcheng Travel and Baidu Maps revealed significant travel trends during the National Day holiday, with a notable increase in self-driving trips and tourist site visits on October 1 [1][2] Traffic Conditions - On October 1, major highways experienced severe congestion, with an average congestion mileage of 2,193.62 kilometers, a 30.11% increase compared to the same period last year [2] - The peak congestion reached 6,566.82 kilometers at 11:30 PM on September 30, indicating a high volume of long-distance self-driving travelers [2] Popular Destinations - Key tourist destinations such as the Forbidden City, National Museum of China, and Terracotta Army saw a significant increase in visitor numbers, with the Forbidden City experiencing a 146.28% rise in visitor index compared to regular days [8][9] - The demand for nearby transportation around popular scenic spots surged over three times compared to normal levels, leading to increased congestion in surrounding areas [5][7] AI Utilization - The demand for AI-driven travel planning surged, with Tongcheng Travel's AI assistant DeepTrip seeing a peak access volume nearly three times higher than usual and a 6.5-fold increase in inquiries [4] - Over 30% of the inquiries during peak hours were related to avoiding congested routes and finding less crowded destinations [4] Local Leisure and Surrounding Travel - Major cities experienced a "strong start" for local leisure and surrounding travel, with core business district foot traffic increasing significantly, particularly in cities like Shenyang and Changchun [10][11] - The local and surrounding travel interest in major cities such as Beijing, Shanghai, and Guangzhou grew over 100% compared to normal levels [11]

Core Insights - The rapid integration of artificial intelligence (AI) into various industries is transforming China's economic landscape, with AI becoming a key driver of growth and efficiency [4][22] - The core AI industry in China surpassed 700 billion RMB in 2024, maintaining over 20% annual growth, significantly outpacing overall economic growth [4][22] - AI is being recognized as a strategic tool for enhancing productivity and facilitating deep structural transformation across traditional sectors [4][22] Group 1: AI's Impact on Industries - AI has demonstrated its effectiveness in retail, with a sales competition showing AI-driven sales outperforming human efforts by over three times [1] - The AI-driven transformation is evident in various trillion-yuan markets, including retail, finance, and logistics, reshaping efficiency and growth [8] - AI is not merely a replacement for traditional methods but acts as a catalyst for innovation and productivity in established industries [20] Group 2: Infrastructure and Technological Advancements - The foundation of AI's success lies in robust cloud computing and computational power, which are essential for its widespread application [9][10] - Major Chinese tech companies like Tencent, Alibaba, and Huawei are competing to enhance their cloud services to support AI operations [9][10] - The development of domestic large models and stable computational power is crucial for the advancement of AI applications across the country [12][22] Group 3: New Business Models and Opportunities - AI is creating new business models and industries, significantly lowering the barriers to creativity and production, as seen in the 3D printing sector [14][18] - The integration of AI in 3D printing allows users to generate high-quality models easily, marking a shift towards an AI-driven era in consumer-grade 3D printing [18] - AI's capabilities in cross-cultural understanding and content generation are opening new markets for Chinese enterprises, enhancing their global competitiveness [19] Group 4: Traditional Industries and AI Integration - AI is enhancing traditional industries by improving productivity and addressing challenges such as rising labor costs and declining capital returns [20] - Collaborations between tech firms and traditional manufacturers, such as the partnership between GAC Group and Tencent, are leading to advancements in smart manufacturing and global expansion [20][21] - In sectors like healthcare, AI is streamlining processes and improving decision-making, as demonstrated by the applications in hospitals and medical institutions [22]

Core Viewpoint - Tongcheng Travel has achieved an ESG rating of AAA from MSCI, placing it in the top 5% globally, reflecting its strong commitment to sustainable practices and governance [1][2]. Group 1: ESG Performance - Tongcheng Travel has integrated ESG practices into its business operations and culture, aiming for long-term sustainable development [2]. - The company emphasizes a "people-oriented" management philosophy, viewing talent as its most valuable resource and striving to create a diverse, equitable, and inclusive workplace [2]. - Tongcheng Travel has been recognized for its ESG management and long-term investment value, being included in the S&P Global "Sustainability Yearbook (China Edition)" for three consecutive years [3]. Group 2: Technological Advancements - Since 2025, generative AI technology has significantly impacted both supply and demand in the travel industry, with Tongcheng Travel leveraging AI to enhance supply chain capabilities and user experience [2]. - In March 2025, Tongcheng Travel's subsidiary, Lvzhi Technology, announced the full integration of AI models like DeepSeek and Alibaba Tongyi Qianwen into its hotel management system, achieving a 50% efficiency improvement in operational processes [2]. - The company has accelerated the iteration of AI products, launching the upgraded "Chengxin AI" model, now known as DeepTrip, which facilitates a seamless user experience from trip planning to product booking [3].

Core Insights - Tongcheng Travel has achieved an ESG rating of AAA from MSCI, placing it in the top 5% globally, reflecting its strong performance in environmental, social, and governance practices [1] Group 1: ESG Performance - As a leading player in the domestic tourism market, Tongcheng Travel integrates ESG practices into its business operations and culture for long-term sustainable development [2] - The company emphasizes a "people-oriented" management philosophy, viewing talent as its most valuable resource and striving to create a diverse, equitable, and inclusive workplace [2] - Tongcheng Travel has been recognized for its ESG management, being included in the S&P Global "Sustainability Yearbook (China Edition)" for three consecutive years and receiving the "Best Progress in Industry" award [3] Group 2: Technological Advancements - Since 2025, generative AI technology has significantly impacted both supply and demand in the tourism industry, with Tongcheng Travel leveraging AI to enhance supply chain capabilities and user experience [2] - In March 2025, Tongcheng Travel's subsidiary, Lvzhi Technology, announced the full integration of AI models like DeepSeek and Alibaba Tongyi Qianwen into its hotel management system, achieving a 50% efficiency improvement in operational processes [2] - The company has accelerated the iteration of AI products, launching an upgraded version of its AI model, DeepTrip, which facilitates a seamless user experience from trip planning to product booking [3]

Group 1 - MSCI has upgraded Tongcheng Travel's ESG rating to AAA, placing it in the top 5% globally [1] - Tongcheng Travel integrates ESG practices into its business operations and culture, focusing on sustainable development and a people-oriented approach [2] - The company emphasizes the importance of talent and aims to create a diverse, equal, and inclusive workplace [2] Group 2 - Since 2025, generative AI technology has significantly impacted both supply and demand in the travel industry, with Tongcheng Travel leveraging AI to enhance supply chain capabilities and user experience [2] - Tongcheng Travel's subsidiary, Lvzhi Technology, has integrated AI models like DeepSeek and Alibaba's Tongyi Qianwen into its hotel management system, improving operational efficiency by 50% [2] - The company has accelerated the iteration of AI products, launching the upgraded "Chengxin AI" called DeepTrip, which streamlines the entire process from trip planning to product booking [3] Group 3 - Higher ESG ratings reflect the company's robust operations and governance, gaining recognition in global capital markets for its ESG management and long-term investment value [3] - Tongcheng Travel has been included in the S&P Global Sustainable Development Yearbook (China Edition) for three consecutive years and received the "Best Progress in Industry" award [3] - The company plans to continue enhancing operational efficiency and fostering closer partnerships while adhering to sustainable development principles [3]

Core Viewpoint - Tongcheng Travel has achieved an ESG rating of AAA from MSCI, placing it in the top 5% globally, reflecting its strong commitment to environmental, social, and governance practices [1]. Group 1: ESG Performance - As a leading player in the domestic tourism market, Tongcheng Travel integrates ESG practices into its business operations and culture to achieve long-term sustainable development [2]. - The company emphasizes a "people-oriented" management philosophy, viewing talent as its most valuable resource and striving to create a diverse, equitable, and inclusive workplace [2]. - Tongcheng Travel has been recognized for its ESG management, being included in the S&P Global "Sustainability Yearbook (China Edition)" for three consecutive years and receiving the "Best Progress in Industry" award [3]. Group 2: Technological Innovation - Since 2025, generative AI technology has significantly impacted both supply and demand in the tourism industry, with Tongcheng Travel leveraging AI to enhance supply chain capabilities and user experience [2]. - In March 2025, Tongcheng Travel's subsidiary, Lvzhi Technology, announced the full integration of AI models like DeepSeek and Alibaba's Tongyi Qianwen into its hotel management system, achieving a 50% efficiency improvement in operational processes [2]. - The company accelerated the iteration of its AI products, launching the upgraded version of "Chengxin AI" called "DeepTrip," which facilitates a seamless user experience from itinerary planning to product booking [3]. Group 3: Future Outlook - Tongcheng Travel plans to continue its commitment to the value of "customer first" by enhancing operational efficiency and fostering closer partnerships with collaborators [3]. - The company aims to work collaboratively with employees to promote sustainable development principles [3].