TRIP.COM(TCOM)2024-11-19 03:33Financial Data and Key Metrics - The hotel occupancy rate in China has surpassed last year's levels, improving from lower than 2023 levels in Q3, partly due to easier comps and more travelers choosing off-peak seasons [1] - Outbound flight and hotel bookings maintained strong year-over-year growth momentum, exceeding 120% of the same period in 2019, with mid- to high double-digit growth in flight and hotel bookings [1] - Trip.com's air and hotel reservations grew robustly by 60-70% year-over-year in Q3, with the APEC region accounting for over 70% of total bookings and showing the fastest growth [3] - Hotel-related revenue accounted for more than 40% of Trip.com's total revenue in Q3, with cross-selling from transportation to hotels continuing to rise [3] - The Trip.com brand contributed around 9% of the group's total revenue, up from 77% in the same period last year [3][4] Business Line Performance - The Trip.com brand's mobile app remained the top channel, contributing 65-70% of global orders and over 70% in the APAC region [3][4] - The company continues to invest in the Trip.com brand, particularly in the international market and the APAC region [4] Market Performance - The China travel market followed normal seasonality post-National Day holiday, with strengthened year-over-year momentum [1] - Outbound flight capacity reached around 80% of the 2019 level in Q3 and exceeded 80% in Q4, with expectations for further improvement in the coming year [2] Strategy and Industry Competition - The company anticipates normalized growth for its China-related business, with continued emphasis on inbound and outbound cross-border travel [1] - Asia is a critical market, representing 50% of GDP growth and 50% of travel industry growth, with a focus on providing a one-stop shopping platform and excellent customer service [4] - The company is investing heavily in technology and AI to improve user experience, coding efficiency, customer service, and content generation [5] Management Commentary on Operating Environment and Future Outlook - The company expects a normalized growth pattern for its China-related business and continued strong growth momentum for the Trip.com brand [1] - Management believes that the expansion and diversification of travel suppliers will significantly contribute to the overall growth of the travel industry [2] - A healthy economic environment is expected to benefit all industries, including travel [3] Other Important Information - The company has achieved efficient operational efficiencies across all expense lines, including cost, product development, and sales marketing expenses, with marketing expenses as a percentage of gross bookings being less than 1% [7][8] - The company anticipates an expanded capital return program for 2025, potentially including dividends and buybacks, subject to board approval [7] Q&A Summary Question: Recent performance post-National Day holiday and 2025 outlook [1] - Post-National Day holiday, the China travel market followed normal seasonality with strengthened year-over-year momentum, and the company expects normalized growth for its China-related business with continued emphasis on cross-border travel Question: Hotel price changes, China hotel inventory growth, and 2025 outlook [2] - Hotel prices are still below last year's levels, and the number of hotels in China listed on the platform was 6-7% higher compared to last year, with expectations for long-term growth from the expansion and diversification of travel suppliers Question: Outbound flight capacity changes and recovery timeline [2] - Outbound flight capacity reached around 80% of the 2019 level in Q3 and exceeded 80% in Q4, with expectations for further improvement in the coming year Question: Changes in traveler overspending and impact of stimulus measures [3] - A healthy economic environment is expected to benefit all industries, including travel Question: Operational and financial performance for Q3 [3] - Trip.com's air and hotel reservations grew robustly by 60-70% year-over-year, with the APEC region accounting for over 70% of total bookings and showing the fastest growth Question: Strategy in Asia and market share growth [4] - Asia is a critical market, and the company focuses on providing a one-stop shopping platform, excellent customer service, and leveraging its volume to drive good products to customers Question: AI initiatives and operating highlights [5] - The company invests heavily in AI to improve user experience, coding efficiency, customer service, and content generation, with AI expected to enhance operational efficiency and user engagement Question: Financial impact of AI in the short-term and long-term [6] - The financial impact of AI investments has been minimal so far, but operational improvements from AI are expected to eventually reflect in financial performance Question: Capital usage and operating leverage [7] - The company anticipates an expanded capital return program for 2025, potentially including dividends and buybacks, and aims to enhance marketing efficiencies across all markets Question: Marketing expenses and operational efficiencies [8] - Marketing expenses as a percentage of gross bookings were less than 1%, benefiting from high customer loyalty and strong cross-selling, with expectations for increased marketing expenses in Q4 due to seasonality