Trip.com Group Ltd. Q2 FY2026 earnings call

Strategic Direction:

• Adherence to the 'G2' strategy: Globalization and Great Quality remain core pillars.
• Acceleration of inbound travel in China, aiming to serve 200 million inbound travelers over five years.
• Focus on premium, personalized, and immersive travel experiences rather than just sightseeing.

Operational Highlights:

• Inbound travel grew at high double-digit rates; APAC remains the core source market with strong seasonal growth from Europe and the Americas.
• International OTA platform revenue grew over 50% YoY, with business/first-class flight bookings up >70% and customized tours up 600%.
• Domestic family travel saw significant spikes, with spending up nearly 200% in pilot cities during spring break.
• Entertainment drives cross-city travel; 70% of event tickets booked were associated with travel, driving local consumption.
• AI integration is expanding, with TripGenie-assisted orders increasing ~400% YoY and nearly 60% of interactions being booking-related.

Regulatory Compliance:

• Accepted the SAMR administrative decision and implemented rectification measures.
• Discontinued Tier 1 and Tier 2 distribution programs, transitioning to a multi-tiered framework that gives partners more autonomy.
• Updated hotel ranking algorithms to prioritize genuine service quality and guest satisfaction over price competition.

Financial Efficiency:

• Adjusted EBITDA was RMB 4.6 billion (down from RMB 4.9 billion YoY), impacted by the one-time penalty.
• Non-GAAP diluted EPS was RMB 7.27 (USD 1.07), slightly up from RMB 7.20 in the prior year period.
• Cash and equivalents stood at RMB 100.5 billion (USD 14.8 billion).

Total net revenue was RMB 15.7 billion, a 6% year-over-year increase. Accommodation reservation revenue was RMB 6.6 billion (6% YoY growth); excluding a one-time contra-revenue item related to an anti-monopoly penalty, this would have been an 8% increase. Transportation ticketing revenue was RMB 5.4 billion (1% YoY decline) due to softer demand and higher costs. Packaged tour revenue was RMB 1.2 billion (8% YoY growth), driven by international OTA performance and customized tours. Corporate travel revenue was RMB 771 million (11% YoY growth). Entertainment gross bookings increased over 80% YoY.

• Management expects short-term volatility in domestic performance as partners transition to the new regulatory framework.
• Long-term growth trajectory is expected to be driven by underlying business strengths and the G2 strategy, particularly global expansion.
• International business is projected to contribute an increasing share of group revenue and incremental growth.
• No specific numerical forward-looking guidance for Q3 2026 revenue or earnings was provided.

• Macroeconomic and geopolitical uncertainties continue to create market volatility.
• Elevated fuel prices and airfares are weighing on longer-haul demand and overall outbound growth.
• Regulatory compliance risks, evidenced by the recent SAMR anti-monopoly penalty and required operational restructuring.
• Potential cyclical pressure on outbound demand due to cost fluctuations, though management views these as temporary.

Q: How does the conclusion of the antitrust investigation impact strategic priorities? / A: Jen Sun stated that accepting the regulator's decision reinforces their G2 strategy of globalization and great quality. The rectification measures align with long-standing goals to compete on value, transparency, and service quality rather than price. This creates a healthier ecosystem where partners can focus on differentiation, supporting sustainable long-term value creation.

Q: What are the details of the new collaboration framework with hotel partners? / A: Jen Sun explained that the new framework removes previous tiered restrictions, giving partners greater autonomy. The ranking mechanism now dynamically weights customer feedback, service quality, information levels, and historical conversion rates. This aims to better match diverse traveler needs with high-quality supply while fostering a more open and transparent partnership environment.

Q: How is Trip.com adapting to the rise of agentic search and AI-driven booking? / A: James Liang outlined a four-stage journey: Inspiration, Search, Transaction, and Fulfillment. They are partnering with leading AI platforms to capture discovery traffic and building proprietary travel-specific AI capabilities using their unique data. While AI changes the user interface, it does not eliminate the need for reliable supply, real-time inventory, and fulfillment infrastructure, which Trip.com leverages to maintain relevance.

Q: What are the financial implications of ongoing AI investments? / A: Cindy Wong noted that near-term CapEx will increase slightly for computing infrastructure, but most work is application-oriented rather than foundational model building. Over the long term, AI-driven automation and personalization are expected to improve operational efficiency, marketing ROI, and conversion rates, ultimately offsetting costs and improving overall business economics.

Q: What trends define current user behavior and how is the company responding? / A: Jen Sun identified three key trends: Premium Service (resilient high-end demand), Purposeful Travel (cultural/educational trips), and Pro-Leisure (combining business with leisure). The company is organizing teams and products to meet these expectations, focusing on providing excellent service for both business and leisure segments, despite short-term pressures from energy prices and weather.