The 400 billion Trip.com gamble

Author | Wang Xiaojun

Editor | Zhou Zhiyu

On September 1st, an unexpected email arrived in the inbox of Ctrip's technical employees. At a time when many major internet companies are tightening attendance and emphasizing "returning to the office," the content of this email seemed somewhat unconventional: starting now, working from home does not require approval.

On the surface, Ctrip has enough confidence to display this composure. The company has just reported a quarterly revenue of up to 14.8 billion yuan, with a gross profit margin consistently above 80%, and its performance is at a historical high, with its market value once exceeding 400 billion Hong Kong dollars. However, a bright financial report cannot completely mask the complexities of the real world and the harshness of industry competition.

Currently, the battlefield faced by founder Liang Jianzhang has become unprecedentedly crowded due to the increase in entrants.

JD.com has entered with an aggressive declaration of "three years of zero commission," attempting to reshape the industry's cost structure using e-commerce logic and capital. On the other hand, Douyin's offensive is even more fierce, investing "hundreds of millions in subsidies" during the summer, achieving exponential growth in GMV through a new paradigm of "content seeding - live streaming sales," a growth momentum that is enough to make any incumbent feel uneasy.

As users have become accustomed to comparing prices across multiple platforms, and price-sensitive consumers are continuously switching to Meituan and Douyin, can a "better experience" driven by technology really overcome the temptation of "lower prices"?

This move to "unshackle" employees may stabilize morale, but in the face of intense competition on the main battlefield, is this a long-term bet, a proactive deployment to build a new moat with talent density, or a risky test of strategic resolve in the face of a "price war"? This remains to be tested by the market.

Hybrid Work Further Relaxed

Ctrip is not a newcomer to hybrid work. In 2022, Ctrip began implementing a "3+2" hybrid work model internally, allowing employees to work from home on Wednesdays and Fridays.

At that time, Ctrip co-founder and executive chairman Liang Jianzhang stated: "The promotion of the hybrid work system helps reduce traffic congestion, protect the environment, and alleviate issues related to high housing prices in large cities and regional disparities."

The pilot scope of this "no approval" policy covers all domestic regularized technical (T series) and product technical (PT series) employees. Ctrip stated that the core purpose of this process optimization is to better promote the balance between work and life for employees, reduce unnecessary approval processes, and improve organizational efficiency.

Past practices have proven that the hybrid work policy not only did not reduce efficiency but actually improved employee satisfaction. Official data shows that this policy has attracted participation from 70% of the company's employees, with a total of approximately 640,000 instances of working from home. In the initial trial, Ctrip found that the turnover rate of employees participating in hybrid work decreased by about one-third year-on-year.

While the office model is more flexible, Ctrip has also delivered impressive results. In the second quarter of 2025, Ctrip Group's net operating revenue was 14.8 billion yuan, an increase of 16% year-on-year and 7% quarter-on-quarter. This performance slightly exceeded market expectations. Previously, Citigroup predicted Ctrip's second-quarter revenue would be between 14.6 billion and 14.7 billion yuan From a specific business segment perspective, each line has achieved steady growth. Among them, accommodation booking revenue reached 6.2 billion yuan, a year-on-year increase of 21%; transportation ticketing revenue was 5.4 billion yuan, up 11% year-on-year; tourism vacation business revenue was 1.1 billion yuan, a year-on-year increase of 5%; and business travel management revenue was 692 million yuan, up 9% year-on-year.

With a significant increase in revenue, profitability also demonstrated strong competitiveness. In terms of profit, the adjusted operating profit was 4.67 billion yuan, a year-on-year increase of 10.4%, which was about 390 million yuan higher than market expectations.

What is most noteworthy is its profit margin. According to the financial report data, Trip.com's gross margin in the second quarter reached 81.0%, higher than the 80.4% in the first quarter, showcasing the competitiveness of its business.

Among various businesses, Trip.com's international operations performed particularly well, becoming the core engine of growth. In the second quarter, the total booking volume of Trip.com's international OTA platform increased by over 60% year-on-year.

The outbound tourism market is recovering strongly. Trip.com's outbound flight and hotel bookings have returned to over 120% of the same period in 2019, far exceeding the industry average recovery level of 84%. The inbound tourism market also performed outstandingly, with booking volume increasing by over 100% year-on-year.

Additionally, Trip.com's performance is also driven by the overall explosion of the mass tourism market. According to a sample survey of domestic residents' travel, in the first half of 2025, the number of domestic residents traveling reached 3.285 billion, a year-on-year increase of 20.6%. In terms of travel expenditure, in the first half of the year, domestic residents' travel expenditure was 3.15 trillion yuan, a year-on-year increase of 15.2%.

This explosion is still ongoing. This summer vacation, the tourism market has shown unprecedented vitality, and this growth momentum may also be reflected in its subsequent financial reports.

UBS recently predicted in its research report that Trip.com's room night numbers in the third quarter will grow strongly, which should support domestic revenue in China to maintain a steady level of about 10%; considering the gradual recovery of cross-border flight capacity and the high base, it is expected that Trip.com's outbound tourism revenue growth will further normalize in the third quarter, reaching low double digits, while Trip.com's overseas business revenue growth will maintain strong momentum of over 50%.

Hotel and Travel Competition Intensifies

The explosive growth of the mass tourism market has made the trillion-yuan cake of hotel and travel particularly enticing, and has made Trip.com's gross margin of 80% a target of criticism. According to Soochow Securities' forecast, the transaction scale of China's online tourism market is expected to exceed 1.7 trillion yuan by 2025, enough to accommodate multiple players.

The influx of new and old forces is fundamentally changing the strategies and landscape of this war. The past "7+2+1" industry structure, dominated by the Trip.com system (Trip.com, Qunar, Tongcheng), which accounted for 70% of the market share, is facing unprecedented challenges. The core of competition has shifted from controlling upstream resources such as hotels and flights to competing for new traffic and user mindshare.

JD's strategy is an aggressive price revolution. In a small-scale speech in June, JD Group Chairman Liu Qiangdong bluntly stated that he wanted to reduce costs in the hotel and travel industry by one-third, and then officially entered the market with a policy of "up to 3 years of 0 commission," directly targeting the industry's high commission pain points. To quickly build a team, JD even offered high salaries to poach talent from Fliggy, Tongcheng, and Trip.com, clearly demonstrating its determination to disrupt the market Douyin's strategy is a dimensional reduction attack on the content ecosystem. It has invested hundreds of millions in subsidies to support hotel brand live streaming, significantly shortening the user's decision-making path from "interest to booking" through scenarios like live streaming sales and influencer store visits.

CMB International predicts that Douyin's hotel and travel transaction volume is expected to reach 90 billion yuan in 2024, a year-on-year increase of 50%. This growth model driven by the content ecosystem is difficult for traditional platforms to replicate.

The effectiveness of the new players' offensive is rooted in fundamental changes in travel consumption trends.

On one hand, consumer behavior is becoming more frequent, fragmented, and socialized. More and more people are keen on short trips and are accustomed to obtaining information and sharing interactions on social platforms like Douyin and Xiaohongshu. On the other hand, new consumer forces are rising. Generation Z and the elderly are becoming new market drivers, while the potential of niche attractions and lower-tier markets is continuously stimulated under the catalysis of social media.

These trends challenge Ctrip's traditional advantages. As the attention of the new generation of consumers is divided among short videos and social platforms, Ctrip's "search-booking" model, which it relies on for survival, is facing challenges from changing user habits, and its "defensive fortifications" are not invulnerable.

In the face of challenges, existing players have to rethink their positions.

Ctrip's weakness lies in its insufficient penetration in the mid-to-low star hotel market, which is being eroded by competitors like Meituan and Douyin. In response, Ctrip has chosen to focus on technology and service, such as launching an upgraded "Itinerary Planner" AI feature, attempting to consolidate its moat by enhancing user experience.

Players in the second tier are actively seeking change. Meituan, leveraging its high-frequency advantage in local life, maintains its base in the mid-to-low end and short trips. Tongcheng, on the other hand, relies on the stable traffic entry of WeChat and extends upstream in the supply chain through acquisitions like Wanda Hotel Management, enhancing its "self-sustaining" capabilities.

Now, the online travel war has entered a deep-water zone. Analysts at Soochow Securities point out that the advantage of the industry leader lies in resource accumulation and delivery capability, while other players rely on high-frequency payments or social media traffic, each with its own focus, and the landscape has not solidified.

This is no longer a competition of a single dimension, but rather a clash of Ctrip's "service + supply chain" model against Douyin's "content + traffic" model, as well as JD's "e-commerce + pricing" model.

More flexible working methods may stimulate the innovative capabilities of Ctrip's employees, but in the face of fierce competitors with different logics, Ctrip needs to prove to the market that its technological barriers and service value are sufficient to cope with this unprecedented multi-front war