Full Transcript: Trip.com Group Q2 2026 Earnings Call

com Group (NASDAQ: TCOM ) reported second-quarter financial results on Wednesday. The transcript from the company's second-quarter earnings call has been provided below. This content is powered APIs. 7 billion, a 6% increase year-over-year, driven by resilient global travel demand despite challenges such as elevated fuel prices and geopolitical uncertainties.

The company is focusing on globalization and high-quality services as part of its G2 strategy, particularly emphasizing the development of inbound travel to China and leveraging AI to enhance travel experiences. com's international business grew strongly, with international OTA platform revenue increasing over 50% year-over-year, and a significant rise in high-end travel bookings, indicating a shift towards premium and personalized travel experiences. The company received a one-time administrative penalty from the State Administration for Market Regulation (SAMR), impacting second-quarter results but is seen as aligning with long-term strategic priorities.

com is investing in AI to improve travel discovery and booking experiences, with AI-driven interactions and bookings increasing significantly, and anticipates disciplined investment in AI to support long-term efficiency and growth. Full Transcript OPERATOR Good day and thank you for standing by. com Group second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode.

After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press Star 11 on your telephone keypad. You will then hear an automated message advising your hand is raised. To withdraw your question, please press Star 11 again.

Please be advised that today's conference call is being recorded. I would now like to hand the conference over to our first speaker today, Michelle Chi, Senior IR Director. Please go ahead. Michelle Chi, Senior IR Director Thank you.

Good morning and good evening. com Group second quarter of 2026 earnings conference call. Joining me today on the call are Mr. James Liang, Executive Chairman of the Board, Ms.

Jane Sun, Chief Executive Officer, and Ms. Cindy Wang, Chief Financial Officer. S. Private Securities Litigation Reform Act of 1995.

Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. com Group's public filings with the Securities and Exchange Commission. com Group does not undertake any obligation to update any forward-looking statement except as required under applicable law.

James, Jane, and Cindy will share our strategy and business updates, operating highlights, and financial performance for the second quarter of 2026, as well as some outlook for the third quarter of 2026. After the prepared remarks, we will have the Q&A session. With that, I will turn the call over to James. James, please.

James Liang, Chairman Of The Board Thank you, Michelle, and thanks everyone for joining us today. The global travel industry faced a more challenging operating environment this quarter. Macroeconomic and geopolitical uncertainties continued to create volatility across markets. Elevated fuel prices and airfares increased the cost of travel and weighed more heavily on longer-haul demand.

Despite these pressures, travelers' appetite for exploration remained resilient, with demand shifting towards shorter-haul destinations. We believe these near-term dynamics do not change the long-term trajectory of global travel. Travel remains a fundamental consumer need, and global connectivity continues to expand as travelers seek higher quality, more personalized experiences. Against this backdrop, our strategic priorities remain clear.

Globalization and great quality continue to anchor our long-term growth. Globalization represents a significant structural opportunity. We are particularly bullish on the long-term potential of inbound travel. China offers an unparalleled breadth of destinations, culture, and experiences.

We believe inbound travel remains well below its full potential and is entering an important phase of structural growth. To capture this opportunity, we have committed to accelerating the development of inbound travel. We will invest to build a stronger inbound travel ecosystem, empower local partners, and make the country more accessible to travelers around the world. Capturing this opportunity requires more than expanding our global reach.

It also requires us to compete on the quality of the products and experiences we deliver. This is the second pillar of our G2 strategy: great quality. We believe travel growth will increasingly be defined by differentiated products, superior service, and compelling value for travelers and partners. These are capabilities we have built over many years, and they will become increasingly important as consumer expectations continue to evolve.

We believe the industry is moving in the same direction, with competition increasingly centered on quality, value, and experience. This evolution is closely aligned with the direction of our G2 strategy. Technology is also reshaping the travel experience, with AI rapidly transforming how consumers discover, plan, and experience travel. We are advancing our proprietary AI capabilities across the travel journey, making travel more personalized, seamless, and valuable.

We are seeing growing evidence that AI is becoming an integral part of the travel journey. com increased by approximately 400% year over year, and nearly 60% of TripGenie interactions are now booking-related, spanning hotels, flights, and attractions. These trends demonstrate that travelers are increasingly relying on AI not only for inspiration, but also to make and fulfill travel decisions. Importantly, we believe AI will make the underlying infrastructure of travel even more valuable.

AI may transform how travel is discovered, but it does not eliminate the complexity of delivering travel. Every trip still depends on high-quality supply, trusted information, real-time availability and pricing, transaction infrastructure, fulfillment, and reliable service. These capabilities are built on deep industry relationships, technology, and operational expertise, and are difficult to replicate. Our long-standing investments in these capabilities position us well for this next phase.

We will continue to combine the power of AI with our global travel infrastructure, making travel easier and better for consumers and creating greater value for our partners. Looking ahead, our confidence in the long-term opportunity has never been stronger. We are excited about this next chapter and remain firmly focused on building a stronger, more innovative, and more valuable global travel platform for travelers and partners around the world. With that, I will turn the call over to Jane for operational highlights.

Jane Sun, Chief Executive Officer Thank you, James. Good morning everyone. 7 billion. com Group continued to demonstrate resilience.

In the second quarter, our international businesses continued to grow strongly, with inbound and world-to-world travel increasingly contributing to our overall momentum. Inbound travel continued to be one of our fastest growing businesses in the second quarter, with revenue increasing high double digits year over year. APAC remains our core source market, supported by frequent travelers from markets such as Korea and Southeast Asia. At the same time, we are seeing particularly strong seasonal growth from Europe and the Americas during key holiday periods.

Traveler behavior is also evolving. They are venturing beyond traditional eastern coastal destinations and increasingly exploring central and western parts of the country. They are also shifting from traditional sightseeing and landmark visits toward more immersive cultural experiences centered around local cuisine, traditional culture, and intangible cultural heritage. We are also seeing growing demand for family travel from key source markets, particularly during holidays and school breaks.

At the same time, international events are creating additional opportunities to drive inbound travel. Events such as the Canton Fair in Guangzhou and our Envision Global Partner Conference provide natural opportunities for international visitors to extend business trips into leisure travel. To capture these opportunities, we are working closely with local partners and destinations to improve international visibility, strengthen multilingual services, and better serve overseas travelers. We are committed to supporting the development of inbound travel with an ambition to serve 200 million inbound travelers over the next five years.

Our goal is to bring more destinations, experiences, and local businesses into the global tourism ecosystem and capture the next phase of inbound travel growth. On the international front, global travel is increasingly becoming a structural growth engine for our platform, powered by expanding international supply and growing demand from travelers around the world. During the quarter, revenue on our international OTA platform increased over 50% year over year, supported by higher transaction value and a favorable mix, despite elevated fuel prices and airfares weighing on travel demand.

Importantly, this growth is increasingly driven by higher-quality and more personalized travel demand. com increased more than 70% year over year. Customized tour bookings, where travelers can work directly with a travel expert to design a trip around their specific needs, increased 600%. These trends point to growing demand for premium travel options, greater personalization, and unique experiences.

We are continuing to strengthen our presence across key international markets and expanding our supply, localized products, and service capabilities globally. More importantly, the composition of this growth reflects the increasing diversity of our platform. We are increasingly enabling travelers from around the world to discover destinations globally. This creates a significantly larger addressable market and provides a strong foundation for the next phase of our global growth.

Turning to outbound travel, demand remained resilient in the second quarter, although travelers continued to be selective amid a more complex macro environment. Travel intent remained healthy, with holidays and major events, including sporting events and entertainment, continuing to drive meaningful travel demand. At the same time, higher fuel prices and airfares weighed on overall outbound growth. We are seeing travelers adjust their destination preferences in response to higher travel costs, with short-haul and visa-free destinations capturing a larger portion of outbound demand.

Travelers have also been responsive to changes in airfare, adjusting their destination and travel plans as prices fluctuate. We view these dynamics as primarily cyclical rather than structural. As these temporary cost pressures ease, we believe outbound demand has the potential to return toward its underlying growth trajectory. Turning to domestic travel, demand remained robust in the second quarter, supported by a series of holidays and the continued rollout of spring break programs.

The Qingming, May Day, and Dragon Boat Festival holidays each generated strong travel demand, and spring break is creating additional travel occasions for families. In the spring break pilot season, cities' family travel bookings and spending both increased more than 300% year over year, approximately five times the growth rate of non-family travelers. Overall bookings in these cities increased nearly 150%, with spending up nearly 200%. We are also seeing a shift in where and how people travel.

Less traditional, lower-density destinations are growing faster than major tourist attractions. Short-haul trips, city breaks, rural leisure, and educational experiences are becoming increasingly popular. Travelers are also moving beyond single-attraction sightseeing toward more immersive experiences that combine tourism with dining, accommodation, transportation, culture, and other local offerings. These trends are broadening the addressable opportunity for our platform and creating more ways for travelers to discover and engage with local destinations and businesses.

Entertainment is increasingly becoming a driver of travel demand. In the second quarter, gross bookings for our entertainment business increased over 80% year on year. Concerts, sporting events, and other live entertainment are becoming important reasons to travel. In the first half of 2026, seven out of 10 event tickets booked on our platform were associated with cross-city travel.

More than one third of travelers stayed an additional night for an event, and hotel bookings in destination cities increased multiple times during major events. The impact extends beyond the event itself, driving demand across accommodation, transportation, dining, and other local consumption. Entertainment is also helping cities strengthen their appeal as content destinations. Unlike traditional sightseeing resources, concerts, sporting events, and other live experiences have defined dates and strong fan appeal, making them powerful catalysts for cross-city travel and local consumption.

In the first half of 2026, entertainment-related spending in cities such as Suzhou, Chengdu, and Zhengzhou increased over 200% year over year. Finally, we are continuing to evolve our partnership model to support healthier competition and sustainable growth across the travel industry. In July, we received the administrative decision issued by the State Administration for Market Regulation of the People's Republic of China. We accept the decision and are moving forward with the implementation of the requirements set forth by the regulator.

We appreciate the guidance provided by the SAMR and are using this process to further strengthen our operating model and support the long-term development of the travel industry. As part of our rectification measures, we are discontinuing our Tier 1 distribution program and transitioning partners to a new multi-tiered framework, giving them more choices in how they work with us and creating opportunities for shared growth. At the same time, we are refining our pricing ecosystem by discontinuing the Tier 2 distribution program and giving partners greater autonomy in their commercial decisions.

These changes allow competition to focus more on service quality, product differentiation, customer experience, and overall performance. Beyond these changes, we are strengthening partner enablement. We are simplifying platform rules and promotional processes to reduce operational complexity and investing in data, technology, and international marketing to help partners improve service quality and reach new customers. We have also updated our hotel ranking algorithms to place greater weight on genuine service and lasting guest satisfaction.

We also remain committed to enhancing consumer protection. We continue to strengthen data security and personal information protection and ensure that our technology and algorithms are developed and applied responsibly. We are committed to providing transparent, trustworthy services and continuously improving the user experience based on consumer feedback. Together, these efforts will help create a healthier competitive environment where partners can compete on quality and differentiation, consumers enjoy better experiences, and the industry develops on a more sustainable foundation.

Looking ahead, we will stay focused on execution, build stronger global capabilities, and continue investing for the next phase of sustainable growth. With that, I will now turn the call over to Cindy. Cindy Wong (Chief Financial Officer) Thanks, Jane. Good morning, everyone.

7 billion, representing a 6% increase from the same period last year. This was primarily driven by resilient global travel demand during the quarter. 6 billion, representing a 6% increase year over year. This was mainly driven by solid growth in international hotel bookings, partially offset by the impact of a contra-revenue item related to the administrative penalty imposed by the State Administration for Market Regulation (SAMR).

Excluding this item, revenue would have increased by 8%. 4 billion, representing a 1% decrease year over year. The decline was primarily driven by softer demand across markets, elevated fuel prices, and geopolitical tensions, as well as operational adjustments related to industry standards and compliance. These factors were partially offset by strong performance from our international OTA platform.

2 billion, representing an 8% increase year over year. This was mainly supported by strong growth on our international OTA platform and continued momentum in customized tours across markets as travelers increasingly sought more personalized experiences.