As a listener to Trip.com Group's conference call ($TCOM (+0%)) fourth quarter 2024 conference call, I was able to gain insights into the company's strategies and financial results. Here is a summary of the call:
James Liang, Co-Founder and Executive Chairman, began by explaining the company's overarching strategy. He emphasized the remarkable resilience of the travel market and the increasing value consumers place on experiences experiences. He highlighted that by 2024, Trip.com Group is expected to have a GMV of over 1.2 trillion RMB (169 billion USD) achieved. A key point of his remarks was the importance of AI innovation for Trip.com. The company's AI-powered tools aim to make travel planning more accessible and tailored to individual needs.
He named Trip.Best, Trip.Trends, Trip.Deals, Trip.Events, Itinerary and TripGenie are examples of these innovative tools. TripGenie in particular enjoyed growing popularity, which was reflected in a 200% increase in traffica an increase in browsing time of almost 100 % and and an 200% increase in the number of conversations. reflected.
In addition, Liang pointed to the robust growth of the international business which accounted for 14% of Group sales in the fourth quarter and 10% in the full year 2024 accounted for. He also emphasized the company's commitment to the promotion of incoming tourismthe support of rural development through sustainable rural tourism projects and the implementation of sustainable practicesto make a positive contribution to environmental protection.
Jane Sun, CEO and Director, presented the operational highlights and provided insights into current trends. She reported an impressive sales growth of 23 % in the fourth quarter and 20 % for the full year 2024. The outbound business continued to record strong growth, boosted by the easing of visa regulations and the increasing availability of international flights. In the fourth quarter, industry-wide cross-border flight capacity reached over 80% of pre-pandemic levels, while outbound hotel and flight ticket bookings from Trip.com increased by more than 120% compared to 2019 outperforming the industry by 30 to 40 %.
Sun also highlighted the strong increase in domestic tourism in China with 5.6 billion trips in 2024underlining the growing importance of travel in Chinese people's daily lives. The incoming tourism is also becoming an important factor for economic and cultural dynamism. In the fourth quarter and in 2024 as a whole, inbound inbound bookings on Trip.com's platforms increased by over 100% compared to the previous yearwhereby the bookings from visa-free countries increased by over 150%. In response, Trip.com Group introduced free city tours for international travelers in transit in Shanghai and Beijing.
Sun mentioned that Trip.com has strengthened its presence in key APAC markets and and expanded into new regions. In the fourth quarter airline ticket and hotel bookings on the international OTA platform increased by over 70 % year-on-yearwith APAC bookings increased by around 80 %. The company strategically invests in technology and talent acquisition and operates 16 global call centers to ensure world-class customer service.
Another focus was on the silver generationthe 50+ generation, which is a growing and affluent market segment. Trip.com has launched the Old Friends Club initiative to specifically address this target group. In addition, Trip.com is committed to sustainable development and supports its employees with various measures, which has earned the company numerous awards as an attractive employer.
Cindy Wang, CFO, presented the detailed financial results and gave an outlook on future developments. The net revenue for the fourth quarter of 2024 amounted to RMB 12.7 billion, an increase of 23% year-on-year. For the full year 2024, net revenue amounted to RMB 53.3 billion, an increase of 20% year-on-year. Revenue from accommodation reservations increased in the fourth quarter by 33% compared to the previous year and for the year as a whole by 25 % compared to the previous year. Sales of transportation tickets increased in the fourth quarter by 16 % compared to the previous year and for the year as a whole by 10 % compared to the previous year. Turnover with package tours increased in the fourth quarter by 24 % compared to the previous yearmainly driven by the international business, which grew by around 100 %.
The company is planning strategic capital return initiatives for 2025including a share buyback program of up to USD 400 million and a cash dividend totaling approximately USD 200 millionunderlining the confidence in the company's financial strength and future growth prospects.
In the subsequent Q&A session, all executives were available to answer analysts' questions and provide detailed insights.
Brian Gong from Citi inquired about the potential impact of AI agents and large language models on OTAs like Trip.com. Liang replied that AI agents will not replace OTAs, but rather complement them. Trip.com offers added value in terms of real-time travel information and end-to-end servicesthat cannot be replicated by AI alone.
Alex Yao from JPMorgan asked about the current current demand for leisure and business travelthe growth rate for 2025 and the key revenue drivers. Sun identified the young generationthe silver generation and the further opening of borders as key drivers. She also mentioned the expected recovery of direct flight connections as a positive factor.
Joyce Ju from Bank of America asked about the business trends during the Chinese New Year and the outlook for 2025. Wang reported a healthy appetite for travel and an expansion of the travel radius. She mentioned that the hotel prices gradually approaching the previous year's level.
Simon Cheung from Goldman Sachs inquired about the outlook for the outlook for the Trip.com platform and the reactions from competitors. Sun emphasized the internal strengths of the company, such as the one-stop shopping platformthe excellent user experience, the customer service and the investments in AI.
In summary, the conference call was extremely insightful and highlighted that Trip.com Group is extremely well positioned to capitalize on growth opportunities in the travel market. The company is focusing heavily on AI innovation, tapping into new market segments and expanding its international business to ensure long-term success.
I hope I was able to introduce you to one of the most important Chinese competitors of Booking $BKNG (-1,03%) and Expedia $EXPE (-0,29%) closer to you.
