Trip.com Group Limited (TCOM) 2 Dec 202020 Q3 Earnings call transcript

Thank you for standing by, and welcome to the Trip.com Group Limited Q3 2020 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to Michelle Qi, Senior IR Director. Please go ahead.

Thank you, Kelly. Thank you all. to Third welcome Conference XXXX and Call. morning, Trip.com Quarter Group's Earnings Good

on Mr. Executive call Chairman me Officer. the Joining today are Cindy Chief Board; Jane Ms. of Ms. James Sun, and Chief Officer; Wang, Financial the Executive Liang,

will Securities call, future our of Litigation forward-looking Reform we which provision of outlook safe made Act under During harbor performance, the are discuss this and statements U.S. Private XXXX.

and uncertainties. involve statements inherent risks Forward-looking

number Securities strategy the After updates, financial such, business we will prepared potential our Group's and be Jane James, may uncertainties to expressed call as forward-looking operating except quarter outlined risks does XXXX over of As our Commission. please. update A XXXX. are materially different and Cindy James, to for James. statements, will obligation Group performance a I as for session views public today. as share from of the undertake filings the and and outlook quarter results in of With turn well third under Trip.com required any that, the Q&A law. will any not remarks, Trip.com have with fourth Exchange the highlights the applicable and

our today. of And suppliers, everyone, Michelle. anniversary to partners delighted thank this customers. Thank you, year. were many turned for and Trip.com joining you, XX us Group We October the in have with celebrated

time what Today, the share growth to future a As our like we new to as on China on year few normalizes, the points. environment. domestic focus company reflect business amidst some from taken a to will the have learnings I past I'd and drive

we focus Firstly, on will content.

hub inspiration. a not transaction, platform will but also only for a for Our be travel company

products we'll the renewed with mass markets Secondly, on by our customers. on focus focus a

inventory diversified sourcing work of addition and to will on securing deals mass boutique popularity. in We

a in become operational supplies, offering platform and important and hotels at needs preference scale. have strengths sourcing support, we elements run personalized. our as long such memorable with retain trip. more to our and product the have combination themed and are and Only customers' each are able become attract and Our Combining alternative able more diversified evolving their product are to dining for customers products run. we Boutique of competitive

will empowerment connections. supply we on Thirdly, on chain existing focus building

We in content further will technology to and financing order improve conversion further provide on their support efficiency to platform. marketing, suppliers creation, our in and

our great multiple In refunds will year, customer-first addition, COVID-related Earlier on we on in compliments focus received quality. processing this approach fronts.

hit an As a promotion all-time net result, score high. our

team's product the on identify would to collective and customer Lastly, response the on topic vision. are our experience the global of continue during quality of the we'll We to like to I areas pandemic, proud and and work improve new touch

the market vision. local not that. we As In a have global still and growth. need company, significant run, a focus the global pandemic opportunity has changed for presents to long The

of global COVID-XX in have same However, have to vaccine that capture of be is easily the on At architecture fixable markets, time, to we product technology and ensuring is we'll ever in recovery incorporate prospects opportunities. breakthroughs such perfected for international our lean ensure domestic markets adaptations. the been the lineup watchful for Recent near to encouraging. our term,

for will community, the the supply over content, the on we recovery run. that including Jane. In markets, products, global is on vision continued work I quality. turn that, the way. and the at time, And we'll of hard global focus retain to for meaningful travel the long With chain With we international will are more our domestic call same hopeful summary,

the by performance XX% continued past XX% declined strong our revenues and a overview recovery driven in year-over-year everyone. of to quarter. by businesses. morning Total will Thanks, our QX by China with I domestic brief James. sequential increased start net in the quarter-over-quarter, of Good mainly

the capture to invest to in third operations resources on starting lean to company the rebound. remained market while quarter, During

revenue. to operating representing positive flow level We same see net billion, pleased time, the the of for achieved the are group At cash company RMB at non-GAAP the operating our also of XX% income turned quarter. X.X

double Our China a reservation XX% Short-haul the key the Strong positive few fourth milestones exiting significantly, recovery to hotel Most and domestic during into for digits achieved high-end by domestic mid- turned starting quarter hotel bookings, QX. August. quarter. grew around third third air and bookings the extended business momentum hotel quarter. both at year-over-year, increased

to GMV saw double-digit continued more over During October last growth over Golden growth. compared lead than car local Week XXX% Attraction holiday, hotel Regional our our services XX%. to year-over-year increased reached XX% year. year-over-year. growth GMV travel rental with And domestic our tickets

As the into to have to maintained growth the we positive digits last see year. travel despite our reservation double air domestic In achieved and winter domestic the compared booking we enter glad same hotel are quarter-to-date, weak high-end particular, mid- growth season, to hotel a period momentum have seasonality.

our propelled towards that like company As important a business to full have our a contributors gradually recovery. capacity, speedy domestic would few recap I turn to

Firstly, one-stop our platform spectrum. users enhanced the content strategy and engage across to strengthened attract our multi-brand

user as branded live mid- improved trip positive all have the Our and recovery, engagement. revamped continue Ctrip the especially efforts, interface to the to stream high-end Recent lead such moments segment. our to content contributed at user platform

Millions booked users, a under this high. year XX XX% China reaching flight a and improve Our first users multiple this display providing are quality through services information year's rate tickets to and of new travelers for with helped budget. X-year to third pandemic China from close and products despite their half hotel milestones has beyond. cities partners approximately X%. focus conversion by tier on the Among delivered optimized of

of and shopping conversion. increase one-stop led In transactions, addition, content retention further and a nature apps, also the our of user encompass to

As saw in our hotel ratio same a result, year. improvement to double-digit a the we compared cross-sell last from air our a to period

gains to and further continue share platform multi-brand one-stop will customer fully confident drive market are We future. the that our in

boutique product and and trips domestic our we products enriching Secondly, themed as tools. such enhanced private further competitiveness,

Our tour customer smaller to large demand customized from popular more and shifted from products. products group tours to

of response connect high double-digit in and this able and efficient strategy these to promotion trend. last capability, delivered Many the reinforced the the the year. to strong to coverage promote target, product products to have also and operational have accurate wide most growth compared customers we're products our With We manner. our in

chain Thirdly, we supply on continued to focus empowerment.

who We customers. have service year, our opened capability hotel this with up then connect our directly to our partners can

more meaningful Our to the in ROI and University beginning Hotel using of produced and hotel partners ensure since the further are XXX free classes for digits domestic each Moreover, us traffic our operations. campaign order decisions Deep a their a million produced year coverage system their able Ctrip over integration improvement in number this we and X double close hotel designating maintained about conversion in monitor of and as user their hotel growth experience high-quality informed our QX, preferred our to our hotel make by distributor. hotels In partnership for saw customers. leadership with the of for have quarter-over-quarter partners attendees our than have the a industry. in

local approximately traffic the and Now the international demand, by third pressure to domestic travel to quarter. XX% ongoing the was commit faced environment. has in challenging turning business. travel recovered driven such our to as our the the by international This travel, staycations primarily to Despite brand, ctrip.com, international the all

for able with glad business. been international different on revival have globally development measures We cross-border have we rollout and the announced a Moreover, support encouraging. are will cooperation in Recently, We Board launch to our travel revival recovery treatment be vouchers. further Recent with to many plans. effective travel authorities Rediscover see believe to we also COVID-XX have vaccine similar Tourism governments crucial targeted Singapore to our global and to industry. Singapore taken been their in work

domestic have mentioned, primarily due to this James opted China we to market year. As focus pandemic, on

long-term our the same. remain global vision for However, expansion

will call work hard the our that, to We With over Cindy. the for ourselves partners global to well prepare will with I turn recovery.

everyone. Thanks, Jane. Thanks,

revenue quarter by same for XXXX. XX% revenue period representing third for reported representing strong from XXXX the XXXX, for revenue period in Trip.com than a from year-over-year of Net previous decrease positive billion, with last same the revenue quarter down Group the reservation RMB RMB X.X a pricing XX% by and the XX% by of For a the Accommodation year. grew China reservations increase hotel third mainly was moderately XXXX was from strong business. XX% from recovery X.X reservations the our previous domestic billion, a recovery XX% same driven of China increased decrease net of from quarter a of quarter, in third reservation remains the of August, growth continued of year-over-year. International reached half the Short-haul second period the more the minimal. from increase domestic XXXX markets domestic Accommodation quarter. markets. accommodation by momentum of driven recovery Sequential

from since increase of RMB products product in XX% XXXX compared revenue However, mainly Trip.com markets. the XX% XXXX previous for of million, positive from previous third continued quarter, quarter momentum decline and mainly domestic increased and revenue decrease XXXX not second for overseas period quarter decrease from July. Packaged the billion, and revenue advertising the third from period the the revenue from with same for by RMB year. the permitted by seen the packaged XX% an XXX% XXX to Gross XXXX XXXX China although the of Transportation quarter. businesses of the quarter a China for was third from in of the decline operate. same the and XX% quarter. ticketing RMB XXXX, the third Corporate business travel growth in third growth XXXX transportation of a packaged a in XXX market domestic XX% increased increase domestic tour for representing third was the recovery of bookings being ticketing a of XX% period brand same margin a quarter. X% quarter from was tour Air quarter and representing resumed by in was other was XX% decrease the XXXX of in the domestic from representing the quarter. a mainly XXXX discounted period previous year-over-year to revenue. year-over-year on remains declined XX% XX% same cross-region ticketing third to The which due reached for from The sequential was strong driven quarter. quarter Revenue increase strong for driven pricing previous increase have X.X XXXX from packaged for for a million, was quarter. still International previous revenue The are the increase sequential year-over-year last

the period year-over-year management. operational third Total increased and same further by quarter expenses previous from for third by XXX overseas travel and G&A fluctuations Product compensation our personnel the operating suppliers, spending reversal marketing the response by XX% of by of significant considered growth million decreased to from RMB non-GAAP period Excluding same the X% demand in in offset expenses decreased by recover. by generally expenses total to for personnel. from expenses be in XX% development X XXXX subsidiaries. of from demand the same variable. improving driven strongly. increased Sequential XXXX decline expenses and debt spending marketing billion billion thanks China the RMB Sales share-based A increased continues flexible as as of the due non-GAAP was the the previous development XX% year-over-year, quarter-over-quarter XXXX the to quarter may increase due RMB in efficient in of XX% marketing quarter. decreased the in choose is We from charges, partially for increase domestic to to to can provision related in to product related primarily market to XX% quarter. X.X bad domestic coming quarter The primarily restructuring from structure the costs for mainly quarters in cost by rebounded decreased stimulate decreased increase period certain portion to second XX% XXXX previous by business. market XX% quarter, to by to from operating and quarter XXXX by to third a our XXXX expenses expenses and

in third XXXX expenses mentioned for same factors decreased quarter the Excluding period modestly of the G&A the from XXXX. above,

compared the Excluding X.XX to from operations for or billion. operating the XXXX. the of share-based same and RMB per negative Diluted XX% margin RMB X.X was income previous X% third quarter compensation in non-GAAP in quarter. in USD XXXX ADS reached charges, Non-GAAP was XX% earnings X.XX period

securities USD equity quarter of per for changes ADS the value fair or of XXXX. non-GAAP diluted and and investments X.XX charges exchangeable compensation share-based Excluding same RMB notes, earnings was senior X.XX

of the Now quarter fourth XXXX. turning to

recovery domestic business. a sustained in expect year-over-year We China

For pandemic under be our ongoing international to the it worldwide. business, due pressure continues to

quarter net year-over-year. to XXXX, the decrease XX% For XX% revenues of fourth company expects to currently by

compensation share-based non-GAAP uncertainties XXX further RMB charges, Trip.com Excluding to million which coronavirus the will increasing outbreak preliminary forecast expects to due income be operating visibility. reflects XXX has subject Group's current the company to and restricted The million. RMB between view, change. our This is

continue will please. and We details open in monitor time. Operator, investors to that, we up provide to the With market more for will Q&A.

Your Instructions] America. comes question Joyce Bank Ju from with [Operator of first

on solid Congrats the questions. two have quarter. I

when could international in good could the share China's the news recent vaccine, to it do on recover think some travel and when the you business latest could recover? trends COVID-XX First, given domestic Second, start fully recover? you

mostly general recovery, the shared have turned a since August, or and especially and travel as the between year recovery we International recovered growth few air take in but also it's And reached the Domestic remain well. travel, even longer full booking considering arrangement travels domestic least population. business of in the and business next it both earlier. political months. that the a and vaccine especially will to has a takes for just low from full It have vaccine, will cooperation time travel, and positive China international not of different short-haul hotel governments. high-end outbound transportation international at reach

to it's travel. embrace international fully, a takes for again, community while the international it So

So we to recovery gradual, the prepared of but are I take advantage the think market. travel of the for year next full steady definitely international

Your Shi next question Nomura. with comes from Jialong

China's China's more guideline will will And new how antitrust regulation some this impact Congratulations authority on and Could specifically, financials? on landscape? November, operation a a Internet released very impact the drop platforms. you this solid for in quarter. colors Back Trip.com's OTA provide how regulation

initiatives market. Thank to -- prepare you to your the question. We always support protect government's

So our rules staying the and regulations and to and team finalized. published regulations all we're are be and sure rules is make the with working carefully studied, very the hard compliant to

next Jefferies. question Your with Thomas Chong from comes

about the Can some as is revenue we go in my hotels second guidance segment? into question the about how QX And business as about lower-tier should landscape cities well by provide the XXXX? management competitive we high-end in the hotel think as

expect the hotel Despite to the year-on-year of air general, revenue recovery winter XX% reservations recovery QX. decrease weaker business XX% winter The will domestic Sure. our to In in sustain and a fourth we quarter. we seasonality. despite seasonality, total unfavorable full expect of domestic ticketing

revenue In revenue reservations to XX% accommodation items, terms of year-on-year. for for XX% to decrease each revenue guidance we expect

Week grow quarter hotel growth Our to our reservations and and growth during date, maintained holiday double-digit double-digit. China a hotel Golden high-end GMV positive year-on-year at achieved especially domestic

the the on Our outperformed in the recovery hotel domestic significantly segment. industry average, hotel to business especially high-end mid-

year. fourth revenue to hotel to international quarter our at in we year-on-year. XX% XX% While last the contribution transportation will reservations, revenue XX% expect level revenues low regard remained decrease With the compared XX% very to to

reservations the double-digit compared Our year-on-year achieved during Golden a same the holiday and as ticket business growth positive domestic quarter-to-date. maintained business. growth -- hotel year-on-year remain Week International air

business international compared year. quarter contribution to to XX% remain at very level in Our low fourth XX% revenue last

revenue by leading XX% expect business Our package tour for business -- continued not to and and customized year-on-year. recover to International activities packaged quarter revenue have the package decrease to last packages. -- in accounted XX% Domestic pandemic, gradually, year. tool business total package we tour local to the XX% travel of tour to our for yet which XX% fourth restriction international the the due restarted tour

Yes. corporate We revenue XX%, X-X, for to decrease to travel XX%. business expect

let's of the in of layers. it couple address a terms competition, In

in of all, and markets. the product comprehensive offer care offering, to product for want best sure make the of provide our product we terms First also is to middle new high-end

on So we go as the initiatives capitalize we sure domestic of that offering. are the Jane make to to said, deep one taking is market on product

reach customers customer when chain, we the make on also centered the have wider tier, at we beyond and the customers. more offline first on tier are second are, and penetrate further also cover discussed first good cities tier cities, new new these stores of offline and supply give which third are wherever we third the strategy, only in exposed stores to on a first our outside in not more were cross-sell tier utilize new cities, which the focuses to that. our -- the customer to our opportunities thirdly, not product young also, tier, focusing further are also cities of second-tier sales marketing go around also the as to acquisition, very hubs. to to cities acquisition exposure located Secondly, we reach And sure tier we markets, only into our than and comprehensive out cities our us cities, beyond look only out we're second customers, city before, well our first majority to very tier And X,XXX we but not us. of tier the and -- these And is terms to in also going our

terms Thank we expanding for brand will and very So our sales product reach of also going you. our exposure. aggressive line, channel in forward, in be

comes Our next Poon Morgan from question Alex with Stanley.

domestic non-GAAP domestic X returning XXXX, chain. quantify If your XXXX second also and operating of also the XX% to could without the revenue your business? X considering but think user we to is the between acquisition competition question is focus lower-tier margin -- new and savings operating And to margin acquisition also there growth only cities. quality, it content, and we products related cost converted considering into related should X, how the strategy is demand user level My to question to possible not being have demand? some Is reverse Tier first these, XXXX My in in in on in also supply cities, outbound a and maintain about XXXX outbound XXXX.

very a guidance, short to it's regard us full the very for to booking provide to the window, With XXXX due difficult guidance.

However, get But very be at moment we China uncertainties shall year. next is assuming our sustain we will under business picture domestic that the year, control as good general be COVID-XX new will environment and challenging. there's travel the trend in international still into recovery the still this believe

vaccine the the and However, international from effective towards on business be half, COVID-XX With with of treatment will starting picking the -- up the some travel hopefully, next on there regard the way, the half for the toward margins. year. to our second second

Our a very the same the But huge given growth there's opportunities. at potential company to huge we time, operations. will and in believe -- travel we the always market strongly lean continuously, space, stick efficient that globally

-- first we gaining So priority is our share. continuously to market

Jane will earlier. key explained fundamentals, We the investing as in keep and James business

very well focus, capabilities For to a important the are we have market service opportunities example, position the but in priority. gaining the globally. that more target you. we going service we sure the to best travel continuously course, still to product, at of we as healthy the the technology capture moment, is margin global is Therefore, make in as a market this -- think the Thank are share

comes with T.H. Your Tianxiao from Hou Capital LLC. next question

Congratulations quarter. a on good

So you look not thing near is really outlook, but XXXX. if about term, to one up rather, the it's

plan Chinese of a people trip. international their lot to So start

been inquiries thing, some -- has travel with compared for news and I the one before. search So about haven't read

I plan data, you How are how about second or how can travel of see your that to trip? question. traveling in the year? what how international -- the can maybe many some half you So next big their middle give That's the us indication my people's about So enthusiasm about see do be? starting recover wonder people do from

for question. Thanks your

confident First QX, growth. X% quite of a for led domestic economically all, GDP delivering travel, because plus by the China we are in recovery full

recovering is a with keep trend, the domestic travel as will up our As long a very economy growth. healthy in

be every improvement year-over-year. we that results, will being of are to recovered in efforts and for already improving injected look Secondly, search trend. XXX% control at the the for is our government an have XXXX, the the sure hopeful the When make search vaccine put we will international pandemic our concerted sites

strong. people have I to within think travel and very is down locking been the So desire abroad borders the

is However, make need the ascertained. healthiness we really one is two things: to sure the of population

make vaccine So to many be people until wherever protected. travel, they is will the careful they're taken, sure

that the But and control make these home have careful control they quarantine bubble. also Secondly, the the required. customers for ability a stay to country, required ability we lot should scientists there have the in the start quarantine not countries Then whether countries where travel required. and pandemic, also regions. are that consensus when a whether not their into the to be such with very when high lastly, to terms is of they If will of countries is as these for travel for And have hope to pandemic, again, their demonstrated to home. the demonstrated people quarantine their is weather, will at return time long to

taken these be consideration really all But contain far, good virus. the aboard. we the factors take to government's so need when with on expect this concerted we field science to efforts So news people into

way. recovery under We are gradually see hopeful the to

comes with Your Mizuho. James next from Lee question

to consensus just of in that investments bit any little step-up the Street Cindy, And is government I travel international of what for lower And was can you will Maybe seeing Jane. talk international to for maybe also some the can And is demand? demand, OPI driving than question that update that last first you be seen pretty travel here. wondering guidance about we've the quarter. you from XQ? travel that enthusiastic like some maybe seems talk be perspective? you policy the Lane seem plan it about My you're about for domestic a Green from

your Thanks question. for Sure.

me two parts. Let your in question address

opportunity. the China, First GDP the of job XX% travel represents of I domestic of for think and growth XX% all, approximately

been domestic most So the infrastructure -- the is in And industry. the not supportive top is popular travel destinations, there destinations, our the to to have is only exploration place. also for in very people Policies which popular very for run for lots good domestic also in travel travel. travel long have the but travel revital government of put to new

to bring into Secondly, have the also are power we government region, government, job level. very international talked not the receive I tourists. for the buying Chinese think to Because it but they every opportunities only at local eager creates

worked them we So bureau, with have also be different travel so demand work promote the their for much to when to to launched their recently, vaccine countries campaign interest Singapore. the destinations. customers. with we travel we rediscover every that like very ready, the outbound And the And we to Chinese with popular stimulate market on and the Singapore to different initiatives the is able increasing for will destinations address government

of these in the is travel vaccine our government is we destinations working positive ready, world with again, are the customers and So when the promote the ascertained. safety around terms when for

Yes.

our in some strong quarter, in rebound low travel season the this hand, fourth government. Especially noticed is major of question, on quarter second the will led we by for half cases Shanghai, from And impact also quarter. some slow season, on the of For a have nationally, third the negative starting the very other normally we the the like business which cities including industry. some noticed fourth year, second cities, the

in opportunity. are So position to will investment make make market in that as Jane growth we the the capture we to our explained, best continuously core James to sure competencies and

comes from with Gong Your Citi. Brian question next

solid on results. Congratulations

for question another have I competition. So

seeing also content some like are and We platforms [Indiscernible] [Indiscernible].

via sold being their are content. products travel Some

Given as you them their contents, OTA industry? to on specialization see a do stride

all the all With we questions. very in partners, partners these your open for collaborate Thanks the are ecosystem. with to

platform. inserted our is in their [Indiscernible], product For

lot linked So see our website you empowered where by booking a to you is us. and them capability, have of

make again, sure product customers industry. the our make whether or ecosystem, it's want service on when to And of because the these the they is content, the best quality the reservation see in whether Trip.com of to in So our side is the product the to come other we will back and the industry. best their in our service

next Wong comes Your question Binnie with HSBC. from

every savings for see quarter the business. is locked the strong that can the achieved into the structural other into And years? this what cost in year? how be I to XXXX? growth structural margins be business you these has your recovering, and future domestic -- In Can like a industry on the cost our Congrats savings and excited you Ctrip is think share positive words, extended year, that can mean, how do are

Thank non-GAAP In operating continued of with and and as business, result our G&A year-over-year, Q-on-Q normalized a flexible subsidiaries. XX% product XX% costs which personnel Q-on-Q from of bad business. was management. and domestic with domestic you, the XX% travel recovery and customer decreased thanks partially debt non-GAAP XX% accordingly. increased costs And as mainly non-GAAP certain development decreased the restructuring increased Binnie. the the domestic adjusted third and largely expenses due sequentially, expenses items provision, decrease we all in quarter, to expenses demand our by the line across our X% recovery expense spending offset our major Therefore, to our cost marketing expenses expenses expenses in as increased of structure demand. The the quarter non-GAAP operating non-GAAP efficient rebounded expenses costs operating our Total second sales a and recovery our

Going forward, management key the healthy a the before, -- goals to one for as definitely is team. very achieve we I explained of margin

see starting as we the growth business, China opportunities, still international we from markets. domestic both domestic well with as However, still strong see huge recovery,

competencies our further to sure priority we'll that is capture core make opportunities. top investment So in our the growth to

I'll That conclude session. remarks. question-and-answer Qi does now closing the hand back to for Michelle

us joining Thanks to today. everyone for

for XXXX on transcript and webcast speaking look with to the and investors.trip.com. you a can forward earnings have You call good you, fourth call. today's on find Thank day. We quarter our

you much. very Thank

today. That you participating. our Thank conference does conclude for for

now You may disconnect.