10 December 2025 Global Hotels & Leisure Online Travel Agents: 'Tis the Season to Book. Q4 demand shaping up well, but will AI be the Grinch? Richard J. Clarke, FCA +44 20 7676 6850 richard.clarke@bernsteinsg.com Niall Mitchelson +44 20 7676 7144 niall.mitchelson@bernsteinsg.com In this note we look at the latest traffic data for online travel as an early indicator for Q4. The good news is demand looks strong, all companies' traffic suggest volume is running ahead of consensus by 1-2%. Guidance baked in som ...

Trip.com Group Ltd - Conference Call Summary Company Overview - **Company**: Trip.com Group Ltd (TCOM) - **Industry**: Online Travel Agency (OTA) - **Market Focus**: Asia Pacific, excluding China and India Key Points Industry and Market Position - Trip.com aims to become the number one player in Asia (excluding China and India) in terms of market share, which is considered a challenging yet achievable target [2] - The company is currently the market leader in Singapore, Hong Kong, and Thailand, and is rapidly gaining market share in Korea and Japan [2] - The APAC travel market is expected to grow, with online penetration increasing, providing a favorable environment for Trip.com [2] Financial Performance and Projections - Trip.com anticipates that by 2030, international and outbound business will contribute to 50% of its revenue [2] - Revenue growth projections indicate a slowdown from over 55% in 2025 to around 25% by 2030 [2] - The company expects year-over-year margin improvements for both domestic and overseas operations, although mixed revenue sources may introduce uncertainty [4] Strategic Initiatives - Trip.com has a structured approach to entering new markets, focusing first on product and localization, followed by performance-based marketing, and then brand marketing once a market share of 2-5% is achieved [3] - The company prioritizes branding and service quality over pricing, believing its pricing is competitive [2] - A significant marketing push has been noted, which has positively impacted overseas expansion efforts [1] Competitive Landscape - Concerns regarding competition from Alibaba's Fliggy are downplayed, with Trip.com’s strong supply chain control seen as a competitive advantage [5] - The company is positioned to achieve profitability levels similar to global peers, potentially exceeding them if the revenue mix favors accommodation [3] Financial Metrics - Current stock price (as of November 25, 2025): US$70.30 - Price target set at US$86.00, indicating a potential upside of 22% [7] - Projected revenue growth from Rmb 53,294 million in FY25 to Rmb 77,641 million in FY27, with a net profit forecast of Rmb 32,156 million in FY25 [31] Risk Factors - Risks include rising competition in the domestic market, uncertainties related to the pandemic, and macroeconomic slowdowns that could affect travel demand [50] - The company is also exposed to foreign exchange headwinds, which could impact profitability [51] Investment Thesis - Trip.com is viewed as uniquely positioned to benefit from multiple growth engines, including domestic travel, outbound travel, and international expansion [39] - The company has announced a US$5 billion share repurchase program, representing over 10% of its market cap at the time of announcement, which is seen as a positive signal for investors [39] Conclusion - Trip.com Group Ltd is strategically positioned for growth in the APAC travel market, with a focus on enhancing its market share and profitability through targeted marketing and operational efficiencies. The company’s financial outlook remains positive, despite potential risks from competition and macroeconomic factors.

Core Insights - Expedia Group Inc. shares surged 18% in intra-day trading following strong third-quarter results that exceeded expectations and raised the full-year outlook due to robust travel demand [1] Financial Performance - Adjusted earnings per share for Q3 2025 were reported at $7.57, surpassing analyst forecasts of $6.98 [1] - Revenue for the quarter reached $4.41 billion, exceeding the consensus estimate of $4.28 billion and reflecting a 9% year-over-year increase [1] - Adjusted EBITDA increased by 16% to $1.45 billion, with margins expanding by 208 basis points [2] Booking Metrics - Booked room nights rose by 11% year-over-year, marking the fastest growth in the U.S. in three years [2] - Total gross bookings increased by 12%, driven by a 26% rise in business-to-business (B2B) bookings and a 7% increase in consumer (B2C) bookings [2] Future Outlook - Following the strong results, the company raised its full-year 2025 forecast, now expecting gross bookings growth of 7%, up from a previous estimate of 3-5% [3] - Revenue growth expectations were also increased to 6-7%, compared to the prior outlook of 3-5% [3] - The adjusted EBITDA margin expansion guidance was raised to 2% from 1% [3] - For Q4, Expedia projected gross bookings and revenue growth of 6-8% [3]

Core Insights - Expedia's shares increased by 15.8% in premarket trading following a positive revenue and margin growth forecast for 2025, driven by strong bookings from business clients [1] Group 1 - The company anticipates higher revenue for 2025, indicating a positive outlook for its financial performance [1] - The expected growth in margins suggests improved profitability alongside revenue increases [1] - Strong bookings from business clients are a key factor contributing to the optimistic forecast [1]

Core Viewpoint - Booking Holdings (NASDAQ: BKNG) has underperformed the market recently, trading at $4,940 per share with a 4.9% loss over the past six months, compared to the S&P 500's 19.5% gain [1][9] Group 1: Company Performance - Booking has demonstrated strong long-term revenue growth, achieving a compounded annual growth rate of 17.6% over the last three years, surpassing the average growth of consumer internet companies [3] - The company has an excellent free cash flow margin, averaging 34.3% over the last two years, indicating strong cash profitability and the ability to reinvest and return capital to investors [5][4] Group 2: Customer Metrics - Average revenue per booking (ARPB) growth has been modest at 3.8% over the last two years, which raises concerns about the company's ability to monetize effectively [6][7] - The increase in room nights booked is a more relevant metric for assessing long-term business potential, and the company will need to monitor ARPB growth closely [7] Group 3: Investment Considerations - Despite recent underperformance, Booking's stock trades at a forward EV/EBITDA of 14.8, suggesting potential value for investors [9]

Core Viewpoint - Expedia reports an "improved demand environment" across all segments, indicating a positive trend in travel bookings and consumer interest [1] Group 1: Demand and Performance - The company has observed a significant increase in travel demand, suggesting a recovery in the travel industry post-pandemic [1] - Expedia's various business segments are experiencing growth, reflecting a broad-based improvement in consumer travel behavior [1] Group 2: Market Trends - The overall travel market is showing signs of resilience, with consumers increasingly willing to spend on travel experiences [1] - This trend may lead to further investment opportunities within the travel and hospitality sectors as demand continues to rise [1]

Core Insights - Expedia Group reported strong financial results, with adjusted EPS of $7.57 exceeding the consensus estimate of $6.95, indicating robust performance in earnings [1] - The company experienced an acceleration in gross bookings across both consumer and B2B channels, reflecting positive trends in its business operations [1] Financial Performance - Adjusted EPS reached $7.57, significantly higher than the expected $6.95, showcasing effective cost management and revenue generation strategies [1] - The growth in gross bookings suggests a healthy demand for travel services, which is a positive indicator for the company's future revenue potential [1]

Core Insights - The online travel agency reported a profit of $2.75 billion, or $84.41 a share, indicating strong financial performance driven by steady travel demand trends [1] Financial Performance - The reported profit of $2.75 billion reflects the company's ability to capitalize on ongoing travel demand [1] - Earnings per share stood at $84.41, showcasing robust profitability metrics [1]

Core Viewpoint - Booking Holdings Inc. shares experienced a rise of over 2% following an upgrade from Truist Securities, which changed its rating from Hold to Buy and increased the price target to $5,750 from $5,630, driven by strong growth prospects and improved valuation [1] Group 1: Growth Drivers - Several near- and long-term growth drivers support the upgrade, including robust travel demand in Asia and resilient global economic trends [2] - Expectations indicate a compound annual growth of 7–9% in air passenger traffic across South and Southeast Asia over the next two decades, with Booking's exposure to the region increasing to approximately 25%, up from 20% pre-pandemic [2] Group 2: Economic Projections - Global GDP growth projections of around 3% for 2025–2027, with slightly higher rates in Asia, are expected to sustain travel demand [3] - Concerns regarding potential AI-driven disruptions to online travel agencies are viewed as overstated in the near term [3] Group 3: Valuation Insights - Booking's valuation appears more attractive, with the stock trading at about 20 times consensus 2026 earnings and roughly 16 times 2026 EBITDA estimates [3]

Core Insights - Malaysia Aviation Group has announced a collaboration with Adobe, Google, Skyscanner, and Visa to enhance its online travel booking services [1] Company Collaboration - The partnership aims to improve the digital experience for customers using Malaysia Airlines' online travel booking platform [1] - Collaborating with major tech and travel companies indicates a strategic move to leverage technology for better service delivery [1] Industry Impact - This collaboration reflects a growing trend in the aviation industry where airlines are increasingly partnering with technology firms to enhance customer engagement and streamline booking processes [1] - The involvement of well-known brands like Adobe and Google suggests a focus on integrating advanced technology and data analytics into travel services [1]