While consumption growth in China has slowed, Trip.com Group (TCOM, Financial) continues to post strong quarterly results, including a top- and bottom-line beat in Q2. Like its US counterpart Expedia (EXPE, Financial), TCOM manages several travel platforms such as Ctrip and Skyscanner, serving both domestic and international users.
Despite China's gloomy economic outlook, TCOM has benefited from favorable conditions. Last year, China initiated a trial program allowing visa-free travel from six countries, which has now expanded to over a dozen. This program, extended to December 31, 2025, permits travelers from countries like France and Australia to stay in China for up to 15 days without a visa.
- TCOM's quarterly numbers have improved steadily, with Q2 showing a 13.5% year-over-year revenue growth. All segments saw growth, but transactions on the international platform were particularly strong, with around 70% revenue growth. Bookings from countries with visa-free entry grew the fastest.
- Cross-border travel also showed significant strength, driven by international events like the Euro Cup and the Olympics. Outbound travel was a key growth driver, with international flight capacity restored to about 75% of pre-pandemic levels. Outbound hotel and air ticket bookings have recovered to 100% of 2019 levels.
- Chinese travelers are also booking stays across the region, maintaining robust growth. In Q2, hotel reservations by Chinese travelers increased by around 20% year-over-year.
- Looking ahead, TCOM did not provide formal guidance but noted strong momentum in its China business through Q3. Outbound travel continues to grow, with air and hotel reservations reaching up to 120% of 2019 levels. While TCOM has limited visibility for the rest of FY24 due to short booking windows, it expects travel activities to follow normal seasonal patterns, indicating further growth.
With sustained travel demand in China and government initiatives to boost tourism, TCOM has maintained solid quarterly numbers. Despite economic uncertainties and a roughly 25% correction from May highs, consumer preferences for experiences amid inflation and macroeconomic challenges position TCOM for potential growth.
