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    Trip.com Group Ltd (TCOM)

    Q4 2024 Earnings Summary

    Reported on Mar 7, 2025 (Before Market Open)
    Pre-Earnings Price$64.66Last close (Feb 24, 2025)
    Post-Earnings Price$59.04Open (Feb 25, 2025)
    Price Change
    $-5.62(-8.69%)
    • Trip.com Group is experiencing strong recovery and growth in travel demand, with outbound travel bookings increasing over 20% year-over-year during the Chinese New Year, and inbound travel maintaining triple-digit growth, indicating healthy momentum in travel activities. ,
    • Rapid growth in international markets, with the Trip.com platform growing over 70% in Q4, focusing on internal strengths like providing a one-stop shopping platform, offering excellent user experience, and investing heavily in AI to enhance services. This strategy has led to promising growth and positions the company well against competitors. , ,
    • Strong financial performance and commitment to shareholder returns, achieving a record high operating margin in 2024, with no structural limitations to profit margins in the long term. The company authorized an enhanced capital return program for 2025, including a $400 million share repurchase and $200 million cash dividend, effectively doubling the size of the 2024 capital return program, reflecting confidence in sustainable business growth. ,
    • Management plans to make strong investments in international expansion and AI technology, which may increase expenses and potentially pressure operating margins in the near term.
    • Increasing competition from both domestic and international players, such as Agoda and Booking.com, may impact Trip.com's market share and profitability.
    • Hotel prices are still below last year's levels, and increased hotel supply could lead to pressure on prices and margins in the accommodation reservation business.
    TopicPrevious MentionsCurrent PeriodTrend

    Outbound Travel Recovery and Growth

    Q1 and Q2 earnings calls emphasized full or near‐2019 recovery levels, double‐digit growth in outbound bookings and capacity improvements ; highlighted impressive outperformance versus industry benchmarks

    Q4 reiterates strong recovery with outbound flight capacity over 80% of 2019 levels, double-digit year‐over‐year growth in bookings, and clear bullish sentiment for continued expansion

    Consistently bullish sentiment with progressively higher capacity and bookings; reaffirmed confidence in sustained growth.

    Inbound Travel Market Opportunities

    Q1 and Q2 discussed a multitrillion RMB market opportunity, with inbound bookings surging (e.g. 400% year‐over‐year in Q1, 200% in Q2), supported by enhanced visa policies and free transit initiatives

    Q4 reinforces the strategic focus by noting visa policy relaxations (e.g. 240‑hour transit visa), strong growth in visa‑free entries, and initiatives like free city tours to deepen market penetration

    Persistent focus with expanded promotional initiatives that build on earlier strong growth, indicating an intensifying opportunity.

    International Market Expansion and APAC Growth

    Q1 and Q2 highlighted rapid revenue growth in APAC, reliance on a one‑stop platform, and expanding international presence through investments in mobile platforms and global call centers

    Q4 underscores continued APAC momentum with 80%‑plus year‑over‑year growth in APAC bookings, international OTA revenue growth, and strategic investments (e.g. AI‑driven solutions) to further establish global presence

    Continuous robust expansion with a strategic emphasis on technology and regional growth; the narrative has evolved into further international integration.

    One‑Stop Travel Platform and Mobile Strategy

    Q1 and Q2 emphasized comprehensive service offerings via a one‑stop travel platform and strong mobile usage (over 90% in China, rising international transactions); noted high customer engagement and operational efficiencies

    Q4 continues to stress this competitive advantage, highlighting enhanced mobile features (including TripGenie’s 200% growth in traffic and conversations) with integrated travel services

    Stable and consistently reinforced as a core differentiator with increasing operational enhancements and mobile engagement metrics.

    Investment in AI and Technology

    Q1 mentioned AI-powered personalization and content strategy; Q2 detailed multiple AI tools (Trip Best, Trip Trends, Trip Genie) that boosted user engagement and operational efficiency

    Q4 further amplifies investments in AI – emphasizing AI integration across operations, transformative features in TripGenie, and continued commitment to generative AI for improved efficiency

    Growing emphasis and measurable performance improvements; AI is increasingly positioned as a transformative long-term growth driver.

    Enhanced Capital Return Program and Shareholder Returns

    Q1 did not discuss this theme; Q2 touched on balanced capital management and shareholder returns as part of an overall disciplined approach

    Q4 introduced a significantly enhanced capital return program with a USD 400 million share repurchase and USD 200 million cash dividend, effectively doubling previous efforts

    A new and markedly stronger strategic focus emerging in Q4, reflecting a proactive approach to enhancing shareholder returns.

    Margin Pressures and Financial Performance

    Q1 mentioned improved margins with strong contribution from outbound business and operational efficiencies; Q2 noted seasonal margin patterns and increased sales/marketing investment offset by efficiency gains

    Q4 reported a record‐high operating margin and emphasized efficiency improvements and overseas expansion to counter cost pressures, without direct focus on rising costs

    Consistent improvement in margins despite varied cost pressures; evolving narrative from active cost management to confidence in long‑term financial performance.

    Increased Competition from Domestic and International Players

    Q1 did not elaborate on competitive risks; Q2 acknowledged competition in the APAC region but emphasized strategic advantages in mobile and one‑stop services

    Q4 briefly acknowledged the competitive landscape through a focus on internal strengths and superior service, without heavy emphasis on risks

    While competition is an enduring factor, the focus has shifted to reinforcing internal capabilities rather than dwelling on competitive risks.

    Hotel Pricing Dynamics and Supply Impact

    Q1 observed downward pressure on domestic ADR due to increased supply and shifting demand; Q2 noted increased inventory (around 20% growth) that exerted pricing pressure, even as outbound prices stabilized

    Q4 reported hotel prices gradually nearing previous year levels and a mid‑ to high‑single‑digit increase in supply, suggesting stabilization amid growing confidence in the market

    A trend toward stabilization in pricing dynamics amid continued supply growth; short‑term pressures are giving way to a more balanced long‑term outlook.

    Senior Population Travel Segment

    Q1 first highlighted the silver generation as an emerging opportunity with tailored products such as Old Friends Club; Q2 showed evolution to customized tours and higher‑end travel among seniors

    Q4 emphasizes the senior travel market as a significant opportunity (projected to exceed RMB 1 trillion) with an expanded product offering and growing user base

    A consistently growing focus with enhanced targeting and product expansion, reinforcing its importance as a high‑value market segment.

    Dependency on External Factors (Visa Processing and Flight Capacity Challenges)

    Q1 discussed challenges in visa processing and uneven flight capacity recovery affecting outbound travel; Q2 expanded on improved visa processing and near‑80% flight capacity recovery despite some price pressures

    Q4 reinforces positive outlooks with eased visa processes (notably 240‑hour transit visas) and flight capacity recovering to over 80% of pre-pandemic levels, with expectations of reaching 90%-95% by 2025

    A persistent dependency that is gradually improving; external factors remain critical but are trending positively with policy and capacity enhancements.

    1. Margin Outlook
      Q: How will margins trend in 2025 and beyond?
      A: Management expects margins to remain strong, viewing them as a natural outcome of their dynamic business mix and operational efficiencies. They plan to prioritize overseas expansion and invest in AI-driven solutions to enhance efficiency and mitigate costs. In the longer term, they see no structural limitation to profit margins, which could be comparable to international peers, supported by their innovative strategy and global growth.

    2. Capital Return Program
      Q: Can you update on dividends and share buybacks?
      A: The dividend registration date for Hong Kong shareholders is March 27, and for U.S. shareholders, April 1. In 2024, they fully executed a USD 300 million share repurchase plan, reducing approximately 1% of outstanding shares. For 2025, the Board authorized a new capital return program, including up to USD 400 million in share repurchases and USD 200 million in cash dividends, effectively doubling the size of the 2024 program. They remain committed to increasing shareholder returns through sustainable growth and enhancing value.

    3. Revenue Growth Drivers
      Q: What drives revenue growth and outlook for 2025?
      A: Management sees strong travel demand post-COVID, with key segments like young travelers and the early retired generation showing great enthusiasm. The opening up of borders and relaxed visa restrictions are additional growth engines. Direct flights are expected to recover to approximately 90% to 95% of pre-COVID levels by the end of the year. The Asian market outside China is a huge potential, growing at over 80% year-over-year. They plan to invest strongly over the next 3 to 5 years to provide excellent services globally.

    4. AI Impact
      Q: How will AI developments impact Trip.com?
      A: Management believes AI agents will complement, not replace, OTAs. They expect AI to enhance services by making travel planning more personalized and efficient. AI agents may replace traditional search engines as entry points, opening new customer acquisition channels. They focus on deploying AI to offer real-time proprietary travel insights and an end-to-end service model that AI alone cannot replicate. They are committed to further investing in AI and introducing more user-friendly features.

    5. Outbound Travel Outlook
      Q: What's the outlook for outbound travel and flight capacity?
      A: Outbound flight capacity reached over 80% of 2019's level in Q4 and increased during Chinese New Year. According to CAAC, total international flight capacity could recover to more than 90% by 2025, indicating double-digit year-over-year growth. Despite headwinds in certain destinations, total outbound bookings grew 20% to 30% during Chinese New Year. They plan to continue outperforming the industry by enhancing product offerings and service quality.

    6. Chinese New Year Performance
      Q: How did you perform during Chinese New Year?
      A: They observed healthy travel demand, with travelers spreading out travel dates to avoid peak traffic. Travelers expanded to more distant destinations, and cross-border trips were popular. Outbound travel bookings increased by over 20% year-over-year, while inbound travel saw triple-digit growth during the holidays. Hotel prices are still below last year's levels but are gradually approaching them. They anticipate growing travel demand and normalizing supplier growth will stabilize hotel prices in 2025.

    7. Trip.com Platform Growth
      Q: What's the outlook for Trip.com's platform and competition?
      A: The Trip.com business is growing rapidly, focusing on internal strengths like a one-stop shopping platform, excellent user experience, and outstanding customer service. They invest heavily in AI and see promising growth ahead. While they've always faced competition, their strategy is to build internal strengths to provide the best service and products, which naturally grows their footprint.

    8. Inbound Travel Potential
      Q: What's the potential for inbound travel contribution?
      A: Inbound travel has great potential, as globally it can contribute between 2% to even 10% of GDP. China has started promoting inbound travel by granting free visas to over 40 countries and extending in-transit visas from 3 to 10 days. They hosted over 2,000 global partners to showcase China's attractions. With concerted efforts, inbound travel could contribute $1 trillion to the industry. Trip.com is well-positioned with comprehensive inventory and outstanding service.