Trip (Minutes): Announced a $5 billion open-ended buyback plan
The following are the$Trip.com(TCOM.US) FY25 Q2 Earnings Call Minutes, for earnings interpretation please refer to "Fearless of JD's Entry, Trip.com Remains a Top Performer"
I. Review of Core Financial Information
1. Capital Expenditure: The company is committed to continuous investment in innovation, particularly in technology fields such as artificial intelligence (AI), and providing digital tools and marketing support for small and medium-sized enterprises. A $100 million tourism innovation fund has been launched to support business innovation. Sales and marketing expenses have increased, mainly to support international business expansion plans.
2. Cash Flow: As of June 30, 2025, the company held cash and cash equivalents, restricted cash, short-term investments, held-to-maturity deposits, and financial product balances totaling RMB 94.1 billion (approximately USD 13.1 billion).
3. Shareholder Return Plan: As of the earnings release date, the company has completed approximately USD 400 million in stock repurchases. The board approved a new stock repurchase plan in August 2025, authorizing the company to repurchase a total of USD 5 billion in issued shares, demonstrating a commitment to enhancing shareholder returns.
4. Personnel Adjustment Plan: In the second quarter, product development expenses excluding equity incentive costs increased by 21% year-on-year, and adjusted administrative expenses increased by 8% year-on-year, mainly due to increased personnel-related costs. The company has created 40,000 jobs through the "Rural Revitalization Strategy" and implemented family-friendly workplace policies internally to support work-life balance.
5. Future Expectations: The company remains highly optimistic about the long-term prospects of the tourism industry, expecting inbound tourism momentum to steadily strengthen, becoming a key engine for business growth. Over the next three years, the plan is to collaborate with 200,000 hotels, aiming for 100% growth in inbound bookings, new users, and efficiency to drive industry development. In the second half of the year, the focus will remain on cost discipline and operational efficiency to achieve sustainable growth and long-term value.
II. Detailed Content of the Earnings Call
2.1 Executive Statements on Core Information
1. Market Dynamics and Strategic Focus
a. Inbound Tourism:
- The company's inbound tourism bookings increased by over 100% year-on-year, mainly driven by demand from active source markets such as South Korea and Southeast Asia. Currently, inbound tourism accounts for less than 0.5% of China's GDP, indicating significant growth potential.
- In the first half of 2025, inbound tourists at the national level increased by 30% year-on-year, with 71% coming from visa-free regions. The company has established the country's first inbound tourism service center at Terminal 3 of Beijing Capital International Airport, offering free half-day tours of Beijing, serving approximately 5,000 tourists from over 80 countries.
- Hotels can use multilingual AI systems to provide translation and customer service in 26 languages, effectively attracting inbound travelers.
b. Outbound Tourism: Cross-border flight capacity has recovered to 84% of pre-pandemic levels. The company's outbound hotel and flight bookings exceeded 120% of the same period in 2019, leading the market by 30 to 40 percentage points. Japan remains the top destination for Chinese outbound tourists, with growing interest in long-haul destinations such as the West.
2. Segment Market Growth
a. Silver Generation: The number of "Old Friends Club" users and their GMV (Gross Merchandise Volume) have both increased by over 100% year-on-year since the end of 2024. The company has developed a series of customized themed travel products for this group, including photography, cultural immersion, and wellness vacations, all designed as small group tours with transparent, all-inclusive packages. The company has opened its first "Old Friends Club" offline flagship store in Shanghai.
b. Young Generation: Revenue from the TravelPlus Entertainment segment increased by over 100% year-on-year, mainly due to the growing popularity of concerts and live events. The company offers a seamless one-stop booking experience by bundling event tickets with accommodation and transportation.
3. Technology and Operational Initiatives
a. AI Applications: The company has a unique advantage in developing AI specifically for tourism. The "Trip Planner" AI assistant has been upgraded, allowing users to receive highly personalized and intelligent itinerary planning by answering just three questions, seamlessly integrating real-time transportation, accommodation, dining, and attraction options. The IntelliTRIP suite also includes AI business advisors and AI content generators to help hotels improve efficiency.
b. International Expansion: Total bookings on the international OTA platform increased by over 60% year-on-year, with the Asia-Pacific region being the main growth engine. The company has strengthened partnerships with tourism boards in Australia, New Zealand, Saudi Arabia, and Qatar, and opened a new regional office in Dubai to enhance local influence.
c. Sustainability and Social Responsibility: Over the past year, the company has encouraged more than 100 million travelers to choose eco-friendly travel options, a 39% increase year-on-year. The number of participating hotels in the "Low Carbon Hotel Standard Initiative" has doubled to 3,000. 92% of flights on the platform now display carbon emission data, and car rental users can choose from over 1,000 electric vehicle models. Through the "Rural Revitalization Strategy," 34 rural resorts have been opened in 14 provinces, creating 40,000 jobs.
2.2 Q&A Session
Q: How will the AI and content integration strategy operate in the coming years?
A: AI and content form a strong synergy on the platform. On the user side, AI enhances content by providing personalized and intelligent travel planning suggestions, while the rich content ecosystem strengthens AI models. Users can more easily generate content, even from images, providing highly practical and reliable suggestions based on browsing, booking, and reviews. On the backend, AI significantly improves data processing efficiency and enhances the quality of automated content generation, ultimately boosting customer satisfaction and loyalty. The company's strategic goal is to become the most efficient and reliable one-stop travel service platform.
Q: Can you share information on the recent upgrade of Trip Planner?
A: The latest major upgrade of Trip Planner allows users to initiate travel planning from any idea or inspiration, with optional options to better express travel preferences. The tool is driven by large language models and informed by millions of data points from Trip Vest, Trip Pulse, and Trip Events. It provides highly personalized, data-driven, and easy-to-edit suggestions. The company remains committed to enhancing its features and providing an enhanced experience in future iterations.
Q: What are management's views on booking trends this summer? What are the recent cross-border travel trends?
A: The market demand served by the company shows resilience. Domestic tourism transaction volume growth is very strong, partially offset by a decline in average daily rate (ADR), but overall remains very resilient. In terms of outbound tourism, national-level flights have recovered to 80% to 90% of pre-pandemic levels, while the company's platform has recovered to over 120% of pre-pandemic levels, also showing strong resilience.
Q: Can you share more insights on the outbound and inbound tourism business?
A: The outbound business achieved over 60% year-on-year growth and will maintain strong momentum. In terms of inbound tourism from around the world to mainland China, the industry overall grew by about 30% year-on-year, while the company's platform grew by over 100% year-on-year. The company will focus on providing high-level service and product quality to ensure all customers receive excellent service while accelerating the pace of global business.
Q: What are the recent trends in hotel and airfare prices, and what is the forecast for the remainder of the year?
A: In the second quarter, despite healthy growth in domestic hotel and airfare bookings supported by resilient demand, prices continue to face pressure. Overall hotel supply grew by mid-to-high single digits year-on-year. Recent data shows that domestic hotel prices have stabilized, with summer holiday price declines narrowing to the mid-to-low single-digit range. As for outbound tourism, airfare prices continue to soften year-on-year due to increased flight capacity recovery, but remain above pre-pandemic levels. Hotel prices remain relatively stable.
Q: Given the ongoing macroeconomic uncertainty in the second quarter, what are management's insights on recent consumer sentiment trends?
A: The market shows resilience in transaction volume growth, especially after the pandemic, as people focus more on experiential products. Young people show strong interest in concerts, music festivals, and sports events, while retirees are also very active in the tourism market. Therefore, the company sees strong growth in transaction volume across all markets, although this is partially offset by a slight decline in average daily rate (ADR). Domestic, outbound, and inbound tourism transaction volumes have all achieved sustainable growth.
Q: What impact might the launch of direct airline ticketing by Air Travel have on the company's business?
A: Tourism is a very promising and enduring industry with a large market size, attracting new players every year. The company believes that as long as it focuses on providing the best products and excellent service to customers, consumers will choose us. The company has established a global SOS program and is committed to providing 24/7 service with a 30-second response time worldwide. By adhering to the "Excellence in Service" and "Globalization" G2 strategy, the company is confident in providing the best service and excellent products to global consumers.
Q: How do you assess the current competitive landscape? What is the expected impact on the business?
A: The company focuses on its strengths and consumer needs, believing that the tourism industry truly requires service providers to deliver excellent service promptly. The company does not advocate pure price competition, as the lack of high-quality service cannot meet customers' global travel needs. Therefore, the company's strategy is always to focus on excellent service, comprehensive product supply, and winning customers' trust, allowing them to travel with peace of mind worldwide. The company will invest all resources to further expand its leadership in providing high-quality service and excellent products, serving global consumers.
Q: Can you quantify the potential of the Old Friends Club and TravelPlus Entertainment markets?
A: The Old Friends Club segment has enormous potential, with Chinese retirees (aged 50-55) being healthy, energetic, and curious about exploring the world. It is expected that in the next three to five years, the market size could grow to over USD 1 trillion. These customers are not time-sensitive and can fill gaps during off-peak seasons, thus obtaining high cost-effectiveness. TravelPlus Entertainment targets young people, with strong demand for events like Taylor Swift concerts, the Olympics, and F1 racing tickets, which sell out instantly on the platform, with demand exceeding supply. This strongly indicates it is a robust business, and the company will continue to invest funds to drive the tourism market's development.
Q: Can you share more insights on the potential of inbound tourism?
A: China's inbound tourism has enormous potential, accounting for only 0.3% of GDP before the pandemic, while developing and developed countries typically gain 1% to 5% of GDP from inbound business. In May, feedback from over 3,000 global partners invited by the company indicated that China has excellent infrastructure, a rich history, friendly people, delicious food, and most importantly, offers affordable luxury, such as staying in a five-star hotel for USD 100 to 200. The company believes that with appropriate efforts in promotion, this will be a huge opportunity and beneficial for international exchange and cultural understanding.
Q: Can you provide details on Trip.com's international business operations and financial performance? How will these business groups contribute to the group?
A: In the second quarter, bookings on Trip.com increased by over 60% year-on-year, highlighting strong growth despite macroeconomic headwinds in certain markets. The Asia-Pacific region remains the operational focus and continues to contribute the majority of international revenue. Emerging markets such as the Middle East also show encouraging momentum, although still in early development stages. Inbound bookings achieved triple-digit growth, highlighting the enormous potential of the inbound tourism segment and significant overlap with Trip.com's Asia-Pacific user base, creating strong synergy. The Trip.com rewards loyalty program effectively strengthens user retention through exclusive member benefits, incentivizing users to upgrade membership levels and unlock potential benefits, creating a flywheel effect that enhances customer loyalty.
Q: Can you update on the marketing progress in the second quarter and the marketing strategy and plans for the remainder of 2025?
A: The company's rapid growth in the second quarter reflects the effectiveness of the marketing strategy, maintaining discipline with a return on investment (ROI) of 70%. Through continuous experimentation and dynamic budget allocation, the company focuses resources on high-performance strategies. Looking ahead, with the summer travel peak season and more global holidays approaching, the company will continue to conduct iconic events and invest in proven marketing opportunities while maintaining prudent spending to ensure alignment with long-term strategic goals.
Q: How do aggressive marketing campaigns by global players in international markets affect the company's business? What are the plans for marketing spending for the second half of this year and next year?
A: The international tourism market has enormous potential due to its fragmented but large resources, low online penetration, and resilient user demand, which undoubtedly attracts many players. The large market size allows all online players, including Trip.com, to continue growing and seize opportunities, even in highly competitive regions. Trip.com leverages one-stop travel products, comprehensive inventory supply, competitive pricing, a mobile-first strategy, and excellent customer service to maintain strong growth in major markets in the Asia-Pacific region. The company is also committed to expanding its business scale through targeted localized marketing investments and implementing demand-driven strategies tailored to each market, aiming to expand its influence in the Asia-Pacific region and accelerate growth.
Q: Can you update on the progress of the annual capital return plan and share details of the newly announced USD 5 billion capital return plan?
A: In the past quarter, the company repurchased approximately 7 million American Depositary Receipts (ADRs) from the market, fully utilizing the authorized quota for this year. Regarding the new plan, the company announced a new USD 5 billion stock repurchase plan, funded by proceeds from recent transactions and cash positions. This will be a multi-year plan with no set deadline, and the company will strategically repurchase shares from Nasdaq and the Hong Kong Stock Exchange from time to time. The goal is to at least mitigate potential dilution from the Employee Stock Ownership Plan (ESOP) and possibly reduce total share capital to drive the company's long-term shareholder value.
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