Executive Summary / Key Takeaways

• Global Travel Resurgence Fuels Diversified Growth: Trip.com Group ($TCOM) is capitalizing on a robust rebound in global travel, demonstrating strong performance across its domestic, outbound, and international segments, with particular momentum in China's inbound tourism and the broader APAC region.
• AI as a Core Differentiator: The company's deep integration of AI, exemplified by Trip.Planner and Intelli-Trip, is enhancing user experience, streamlining operations, and empowering partners, creating a significant competitive moat and driving efficiency gains.
• Strategic Expansion into High-Potential Segments: TCOM is actively cultivating new growth engines, including the rapidly expanding "silver generation" travel market (projected to exceed RMB 1 trillion) and the "entertainment plus travel" segment, alongside aggressive international market penetration.
• Solid Financials and Shareholder Returns: Despite increased marketing investments for global expansion, TCOM maintains healthy profitability and robust liquidity, underscored by a recently approved $5 billion share repurchase program, reflecting confidence in long-term value.
• Competitive Edge Through Service and Localization: TCOM differentiates itself with a comprehensive one-stop platform, 24/7 multilingual customer service, and localized strategies, allowing it to outperform market growth in key areas despite aggressive competition.

The Global Journey: Trip.com Group's Strategic Ascent

Trip.com Group Limited, originally known as Ctrip.com International, Ltd., has evolved over 25 years into a leading global one-stop travel service provider. Founded in 1999, the company's rebranding to Trip.com Group in October 2019 marked a pivotal shift towards a more global profile, complemented by strategic acquisitions like Skyscanner and MakeMyTrip. This historical trajectory has cemented its position in the travel industry, built on a foundation of comprehensive service offerings spanning accommodation, transportation, packaged tours, and corporate travel management.

The overarching strategy, dubbed "G2" by management, emphasizes "great services and globalization." This dual focus is critical in a dynamic global travel market, which continues to demonstrate strong resilience and a growing consumer appetite for diverse experiences. Broad industry trends, such as the increasing demand for leisure travel and the significant potential of China's inbound tourism, provide a fertile ground for TCOM's strategic initiatives. China's inbound travel, for instance, currently accounts for less than 0.5% of its GDP, well below the 1% to 5% seen in developed markets, highlighting substantial room for growth.

AI: The Engine of Personalized Travel and Operational Efficiency

At the heart of Trip.com Group's competitive strategy lies its profound investment in artificial intelligence. AI is not merely a supplementary tool but a central pillar, integrated across the entire customer journey from initial trip planning to post-sales support. This technological differentiation provides TCOM with a significant edge over competitors.

The company's AI capabilities are exemplified by several key innovations. The upgraded Trip.Planner delivers a highly personalized and intelligent planning experience. Users can generate customized itineraries by answering just three simple questions: destination, trip duration, and travel style. This tool seamlessly integrates real-time transportation, accommodation, dining, and attraction options, complete with pricing, availability, and detailed descriptions. Powered by large language models and millions of data points from Trip.Best, Trip.Pulse, and Trip.Events, Trip.Planner ensures practical and locally relevant recommendations. Furthermore, users can fine-tune their plans with real travel consultants or AI assistance, offering a flexible and reliable planning experience.

Another critical AI-powered tool is TripGenie, an AI agent that leverages advanced models to address user inquiries. In the first quarter of 2025, TripGenie saw an approximate 50% increase in average user session duration, indicating growing engagement. Beyond planning, AI chatbots and self-service tools handle over 80% of post-sales inquiries, providing 24/7 support and improving response times. Internally, AI significantly improves data processing efficiency and enhances the quality of automated content generation, while also cutting coding time for engineers by 15% to 30%.

For its partners, TCOM introduced Intelli-Trip, a suite of AI-powered tools designed to help hotels capture inbound demand and improve efficiency. This system offers multilingual translation and customer service in 26 languages, "Hi China" tags to attract international travelers, an AI business adviser for real-time operational insights, and an AI content generator for creating video content at minimal cost. TCOM plans to partner with 200,000 hotels over the next three years through Intelli-Trip, targeting 100% growth in inbound bookings, new users, and efficiency. This technological roadmap contributes directly to TCOM's competitive moat by enhancing user experience, driving operational efficiencies, and fostering stronger partner relationships, ultimately supporting higher margins and market positioning.

Operational Momentum and Strategic Growth Pillars

Trip.com Group's operational performance in the second quarter of 2025 underscores the effectiveness of its diversified strategy. Net revenue increased by 16% year-over-year to RMB 14.8 billion, with adjusted EBITDA up 10% year-over-year to RMB 4.9 billion. This growth was supported by strong demand across all key segments.

Inbound Travel has emerged as a significant growth engine. In Q2 2025, inbound travel bookings on TCOM's platform surged by over 100% year-over-year, significantly outpacing the national inbound arrival growth of 30% year-over-year in the first half of 2025. This momentum is driven by demand from Korea and Southeast Asia, coupled with China's increasingly open visa policies and exceptional value as a destination. To further capitalize on this, TCOM launched China's first inbound travel service center at Beijing Capital International Airport in August 2025, offering multilingual assistance and integrated services.

Outbound Travel from China also sustained steady growth. In Q2 2025, outbound hotel and air bookings on TCOM's platform surpassed 120% of 2019 volumes, consistently outperforming the broader market by 30 to 40 percentage points. Cross-border flight capacity recovered to 84% of pre-pandemic levels in Q2 2025, with Japan remaining a top destination and rising interest in long-haul markets.

The International OTA Platform (Trip.com brand) continues its strong global expansion, with bookings increasing over 60% year-over-year in Q2 2025, primarily driven by the APAC region. Mobile remains a key growth driver, accounting for 70% of total international bookings. Strategic partnerships in Oceania (Tourism Australia, Tourism New Zealand) and the Middle East (Saudi Tourism Authority, Qatar Tourism), alongside a new regional office in Dubai, are expanding TCOM's global footprint.

TCOM is also tapping into specialized demographics. The Old Friends Club, catering to travelers aged 50 and above, saw both user numbers and GMV grow by over 100% since year-end 2024. This segment, with its higher disposable income and preference for customized, flexible experiences, is projected to grow into a $1 trillion-plus market in the next 3 to 5 years. Similarly, Entertainment Plus Travel offerings, bundling event tickets with accommodation and transportation, saw revenue grow over 100% year-over-year in Q2 2025, fueled by the popularity of concerts and live events among younger travelers.

Financial Strength and Shareholder Commitment

Trip.com Group demonstrates robust financial health. As of June 30, 2025, the company held a substantial RMB 94.1 billion (USD 13.1 billion) in cash and cash equivalents, restricted cash, short-term investments, and financial products. This strong liquidity position provides a solid foundation for continued investment and shareholder returns.

For the second quarter of 2025, accommodation reservation revenue reached RMB 6.2 billion (+21% YOY), transportation ticketing revenue was RMB 5.4 billion (+11% YOY), packaged tour revenue hit RMB 1.1 billion (+5% YOY), and corporate travel revenue stood at RMB 692 million (+9% YOY). While domestic hotel and air ticket prices faced some pressure, volume growth remained strong, and outbound air ticket prices softened due to increased capacity.

Profitability metrics for the trailing twelve months (TTM) highlight operational efficiency: a Gross Profit Margin of 80.86%, Operating Profit Margin of 26.13%, Net Profit Margin of 31.50%, and an EBITDA Margin of 34.03%. These figures demonstrate TCOM's ability to translate strong revenue growth into healthy earnings.

The company is also committed to shareholder returns. It completed share repurchases totaling approximately $400 million, fully utilizing its authorized quota for the year. In August 2025, the Board approved a new share repurchase program of up to $5 billion, a multiyear initiative funded by recent proceeds and existing cash. This program aims to mitigate potential dilution from employee stock ownership plans and reduce the overall share count, signaling strong management confidence in the company's long-term value.

Competitive Landscape: Differentiating in a Dynamic Market

The online travel agency (OTA) industry is highly competitive, with global players like Booking Holdings , Expedia Group , Airbnb , and TripAdvisor vying for market share. Trip.com Group differentiates itself through a combination of its comprehensive one-stop platform, deep regional expertise, and superior customer service.

Compared to Booking Holdings (BKNG), TCOM's strength lies in its integrated packaged tours and in-destination services, particularly in emerging Asian markets, offering a more seamless bundled experience. While BKNG boasts a broader global footprint and established brand recognition, TCOM's localized services and strong partnerships in the APAC region give it a qualitative edge in these high-growth areas. TCOM's focus on corporate travel solutions also provides a unique value proposition.

Against Expedia Group (EXPE), TCOM's integrated services, including visa and insurance integrations, enhance user value, particularly for complex international travel. EXPE excels in flight and hotel aggregation, but TCOM's regional expertise and customer loyalty in China exploit EXPE's relative weakness in localized offerings. TCOM's strategic adaptability in regulated environments further strengthens its position.

In contrast to Airbnb , TCOM's full-service OTA model, encompassing transportation and corporate solutions, offers more comprehensive packages than ABNB's peer-to-peer lodging focus. While ABNB leads in experiential and flexible bookings with an asset-light model, TCOM's strengths in bundled services cater to a broader range of traditional and business travelers.

Compared to TripAdvisor (TRIP), TCOM's integrated booking services provide materially greater transaction capabilities, moving beyond TRIP's review-focused model. TCOM's strategy offers advantages in execution speed for bookings, while TRIP leads in content-driven recommendations.

TCOM's competitive advantages, or "moats," include its strong brand and network effects, particularly in China, which foster customer loyalty and pricing power. Its proprietary AI technology for bundled services offers qualitatively superior user experiences and operational efficiencies. However, vulnerabilities exist, such as a dependence on the Chinese market, which exposes it to regulatory risks, and potentially higher operational costs in some areas compared to asset-light models like Airbnb (ABNB). Despite these challenges, TCOM's commitment to "great services and globalization" and its continuous investment in AI and localized marketing allow it to maintain strong growth and outperform industry averages.

Outlook and Risks

Management remains highly optimistic about the long-term prospects of the travel industry, anticipating continued strong demand and a significant role for inbound travel as a key growth engine. The company projects that international flight capacity will recover to over 90% of 2019 levels by the end of 2025, indicating double-digit year-over-year growth. Domestic hotel prices are expected to stabilize, supported by increasing travel demand and normalizing supplier growth. The Old Friends Club market is forecast to exceed RMB 1 trillion in the next 3 to 5 years, highlighting a substantial long-term opportunity.

Analysts project Q2 2025 EPS of $0.99 (a 1% decrease year-over-year) on revenue of $2.03 billion (a 15.73% increase year-over-year). For the full fiscal year, analysts predict EPS of $3.6 (a 0.28% increase) and revenue of $8.48 billion (a 14.41% increase). Management's guidance, while conservative, emphasizes mid-teens growth, with international travel as a core driver.

However, risks persist. Macroeconomic uncertainties and geopolitical tensions could impact consumer sentiment and travel patterns. While domestic travel volumes are strong, average daily rates (ADR) have faced pricing pressure. Increased marketing and promotional investments for international expansion, while strategic, could weigh on short-term profitability. Competition remains intense, with global players launching aggressive marketing campaigns and new entrants like JD.com (JD) exploring the market. TCOM mitigates these risks through its diversified market presence, which acts as a natural hedge against forex fluctuations, and its robust Global SOS service, which has a 98% success rate in resolving over 22,400 cases since 2017, providing critical support to travelers during crises.

Conclusion

Trip.com Group stands at a compelling juncture, poised to capture significant opportunities in the evolving global travel landscape. Its strategic emphasis on AI-driven innovation, particularly through platforms like Trip.Planner and Intelli-Trip, provides a powerful differentiator, enhancing both user experience and operational efficiency. Coupled with aggressive expansion into high-potential segments such as China's inbound tourism, the silver generation, and entertainment-plus-travel, TCOM is building a diversified and resilient growth narrative.

The company's solid financial performance, robust liquidity, and commitment to shareholder returns through substantial buyback programs underscore its fundamental strength. While facing a competitive environment and macroeconomic headwinds, TCOM's focus on service excellence, localized strategies, and technological leadership positions it favorably to outperform the broader market. Investors looking for exposure to the dynamic global travel recovery, particularly with a strong foothold in the burgeoning Asian markets and a clear technological roadmap, will find Trip.com Group's story compelling.