Trip.com Group Limited (TCOM) 28 Jun 222022 Q1 Earnings call transcript

Thank you for standing by and welcome to the Trip.com Group 2022 Q1 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to Michelle Qi. Please go ahead.

Thank you. Thank you everyone for joining today. to first welcome earnings of and call. conference morning Trip.com quarter Group’s XXXX Good

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

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

inherent involve and uncertainties. risks Forward-looking statements

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

joining Thank travel into call the Michelle. industry challenges. us pandemic, still you you, everyone today. Thank for the the on X years faces pandemic-related

measures travel industry. China, developed of the into were relatively influence In largely in that strict Chinese year tier in domestic the curbs March cities. the independently. with was being mixed first the performance market of which pandemic quarter global and including to first uneasy picture showed the markets imposed XXXX while control The May have and a Omicron first of X travel outbreaks encouraging of and pandemic due April the the the extended multiple months regions, limited Such

than a COVID through optimistic, capabilities, outlook may With and risk strength not the with travel partners long-term. efforts our and aspirations. market In perspective enhanced is confidence to service perception, value sound to previous deliver recovers. to products was our brighter Global China in once long-haul we similar signs outbreak since of travel continue user and performance, in governments a seem for hotel With in the of static such following for year-over-year. February, and again strong, at are we increased travel In our improved established March, quarters, qualities develop continue order market growth have business pattern and which market product travel up. recover anticipate our to bolstering safety the by already our short-haul travels domestic bookings largely disrupted more XX% continues desire of see recovery management to strong demand, demand efficiency. than offers both we travel to match We While easing continued reduction as proposition a measures. in seen eased. by and customers better China capture for but the January The short-term to pace restrictions their still measures open consumers’ travel

front, international Europe we from the travel many countries, in strong to global of see especially pandemic especially the On recovery with are and encouraged demand Asia-Pacific. benefits across

the hotel bookings outburst Asia across especially and Trans-Atlantic in growth the largely strengthening to performance decisions years countries’ platforms, since and business these global of year-over-year restrictions, It bookings has our achieving Following remove been improved triple-digit of significantly pandemic. been have air travel trends X we markets. with the

adaptive offerings focus the to be and market of with fast Fortunately, service environment demand. and match already nimble along the growth appeared have encourage to local product to our will and our shoots with cater travel changing green to continued opportunities continue to our current

global will keen remain and the footprint. positive we to that, further front, our that call highlights. build I far are be global to signals With seeing turn fortify for On on the so over we vision international Jane operational to

Thank of quarter to and with like our I a start the you, our brief past overview in James. would performance updates focuses. everyone. strategic Good morning, on

of business to sustained of In above XX% with XXXX hotel the first performed January relatively and industry total remained in outbreaks First performance, result February, quarter and our Omicron round our was latest stable net In of year-over-year level. a overview. will X to domestic fully XXXX, all, revenue impacted of overall performance months bookings March after by recover and a increased China. the largely net domestic which close weaker year-over-year, well the a first

However, restrictions. Overall has than to same-city level the close hotel of our the related hotel market to under whole been speaking, reservations impact XXXX pandemic with more were since March, XX% QX, vacation bookings grew year-over-year. in severe

pandemic in recovered than fundamental was China affected Our see the also although the market. domestic to for faster controls The areas was faster delighted were restrictions, travel was that still less COVID. air affected and by largely recovery reservation we by In travel market was the much demand QX, the solid.

such platforms, For in XXX% as on travel XXXX for greater continue Western increased The instance, reopening. our global easening ready level brands, our our by bookings surpassed towards the and pandemic-related XX% Traffic on global China than bookings level. to have make our industry XXXX of than Overall, of domestic growth is outpaced air our Trip.com recent hand, more approximately global hotel and market, also managed also have bookings our Korea, have pre-pandemic the X in the momentum level hotel XXXX UK, in Overall, restrictions. countries have same overseas platform Kong, the hotel have ticket the on as global XXXX, Hong on Trip.com, following substantially a strides year-over-year, Malaysia, the In Domestic increase which level world past UAE, platforms in has XXX% bookings USA, to the when Singapore, quarter. more have other over increased increased bookings situation. their on already average level by across bookings to global upward to recovery above dropped surpassed Trip.com In months. markets. have in with continued the second surpassed more year-over-year. XXX% the air level total XXXX in gain market, non-China weeks, on key COVID all especially markets major surpassed hotel quarter. ticket more trends The The to have Southern South already markets the China first XXX% etcetera. and in over the compared in period XXXX

to and reopen seen international recovery restrictions their as also travel have countries to accept more borders international gradual of We decided travelers. and more lift

strategic highlights and operational Second, focuses.

focus While market market and and it for areas. and focus flexible showed the the following development, to and be the with the and strategy global is important situation stick the vision China global best make on of of different to adaptive our us out local path

reservations participating hotels. business hotel a the our XX% these the hard for in to which We domestic such value accommodation, partners. over High-end and our continue to all, XX,XXX products, our and build strengthen to of worked services better for TripPLUS through propositions to partners of the packages First package quality program incremental hotel hotel product and broad case to China as we further to and innovation, our customers’ value owners enhance value-added hotel contributed a market, upside respond and aspiration packages user users covers of money. hotel over stronger to

we also hotels volume. continued have value to TripPLUS also In XXX,XXX for in with reward meantime, system strengthen our with program, upgraded streamlined loyalty proposition customer’s the our incremental procedures. We to about benefits joined back-end and our extra service

was time last by our result, XX% year. first a confirmation to order when the compared shortened As quarter

Second, content platform.

the We On make top the make users to platform amount of of content KOLs also travel daily user first quarter, number increased by sequentially. the decisions. XXX% content to inspire solid our and further achievements strengthening in continue assist well-informed by of average progress in grew generated to XX%. better XXXX, In

While the the creators channels focused grow, continue enhancing also the the improving fleet efficiency well of content we and as our quality content to of of as on content our content. amount our of

the quarter engagement higher user daily with see number to the delighted are users. average of in We engaging first

content duration months. XX%. also by Our and in of a double-digit grow improvement year-over-year. increased content increased channel viewed view seen to number around the following around also XX% continued Average by has Average have per user

Third, business. global

rate. of front, the strategy international the our by integrate international efficiency the and also we brands average capabilities daily our On reliability further on of travel users’ successful XX% to XXX% the to our nearly managed continue of In Trip.com channel by helped rate our content we and expanding businesses. This to China improve content Leveraging to global strengthened experience customer double technological our light we recovery, chain services. retention supply engagement market, also the worked and global content cover traffic our increased and upgrade year-over-year. year-over-year, in of

also Our the XXXX seeing in improvements quarter. platform already activities achieve since first activity growth have level. XXXX, In surpassed in-destination our offerings reservations top continue triple-digit of to continuous On on are that, pre-COVID global in overseas we of the markets quarter. previous

well and corporate market further market share. position gain to collaborate encouraged attractors Fourth, and global and destinations prepared are We responsibility. to our with strengthen

we opened our with retreats currently with latest freshly Trip.com the in revitalization group operations up initiative, have rural Following X recently. country one

development practitioners We provide of to and support tourism. nurture to local with professional in alternative to training continue tourism collaborate local authorities the accommodations rural to order

to helped contributed contributed the guarantee daily travel personnel total, Shanghai team During supply related resources the to nights by company’s outbreak, approximately our necessity personnel. to recent X,XXX hotel also supply daily help of in support and our necessities experience and reservations. we In anemic room of corporate XXX,XXX leveraging with

relaxation to light are restrictions of we parts starting tunnel. see of many With the of end world, at the the travel the the in finally

may we to impact. weak For still domestic quarter a due pandemic the see relatively market, second

the this we show and continue Cindy. over our in flexible swiftly resilience now with to growth market With to will I seize fast to However, that, changing strategies call be turn will environment opportunities.

Good Jane. everyone. Thanks, morning,

representing the industry result were net XXXX, revenue XX% continued level X decrease to last level. for recovering million, XX% primarily Group same wave due This the to contributed to saw our hotel disrupted for since year local revenue first significant the was representing recovering level, recovering the Accommodation year-over-year first XX% as representing and pandemic-related recovering than of and a first of of relaxation close billion, first China a XX% static more tourism. XX% was billion, of pandemic-related representing quarter-over-quarter, recovery in reservations year-over-year. level, recovery Europe decrease disruption impact QX which decreased decrease XXXX offset was mainly and For quarter to decrease of the international grew revenue was to momentum and the XX% decrease year-over-year domestic first ticketing March, is of XX% with XX% Omicron travel with XXXX quarter is steady of Domestic a hotel This RMBX.X a and travel by XXXX in XXXX to the of Transportation quarter-over-quarter, of increase to disruption China for XX% a since Corporate Packaged increase market March. year-over-year increase year’s first domestic by XX% months was XXXX of primarily travel while in and restrictions reservation muted tour the year-over-year reported quarter-over-quarter, platforms the the management XXXX million, due RMBX.X recent due XX% of restrictions. from March. in by XX% outbreak quarter revenue recovery mainly of the RMBXXX billion, XX% period of among travel decrease COVID a and of compared last which of largely of outbreak. resurgence net on to RMBX.X for in bookings the an largely XXXX quarter-over-quarter, quarter-over-quarter, flattish outbound RMBXXX by level. the quarter the the pandemic compared Trip.com – quarter XXXX by the to of was air Asia to travel revenue X% result

the in period effective for maintain decreased charges, across It the to XX% by saving adjusted was of Adjusted previous operating business for Adjusted was reflecting management XXXX of XX% our It saving expenses G&A last year X% from ADS margin quarter. RMBXXX compensation XXXX million period the quarter cost quarter continue to development share-based by the compared negative by for and negative and sales quarter first compared expenses loss ordinary stable to continue quarter. EBITDA same in share marketing a quarter. last XXXX. saving RMBXX Adjusted to to the quarter our team. a previous of decreased Diluted quarter. to XX% the marketing fourth for lean RMBXX the operating and of was the first compared in for first year same was first EBITDA compared in the same we period XXXX, XX% Adjusted per in the the we year-over-year efficient by and a XX% prudent headcount to a stick It period and the Adjusted the X% XXXX. from period of decreased same the XX% previous decreased X% or same first and as in the million a quarter was in period from our as product and was quarter. per control Excluding with lines. same in million X% total compared last run X% $X.XX quarter saving protocol. in a expenses previous compared the were RMBX.XX to when expenses for

Excluding senior diluted investments per per were share fair value change ordinary securities the RMBX.XX and non-GAAP equity ADS for and notes, and charges of share-based first compensation quarter. or loss $X.XX exchangeable

XX, billion. investment, time held-to-maturity XXXX, deposits of and balance billion March cash, $XX equivalents, cash of was products restricted cash RMBXX.X the or short-term and financial As

XX% second of as China, was the compared across of Shanghai to the XXXX. China rounds passenger of was same quarter-to-date, quarter outbreak first-tier such industry-level quarantine We Shenzhen, like recent Beijing, domestic down entire cities which Multiple period portion the significant to color by among to air a requirements. to businesses. some XX%. was In would industry. the down industry XX% attributable to level largely Turning XXXX, share and by the to RevPAR hotel volume And the travel impacted Omicron in including XX% our

encouraged. are We

commissions. the However, past under encouraged vacation the China, remains in muted outbreaks of more control travel are contributed level, demand, under travel In we recovery And starting still hotel is by local recent remain momentum Asia the recovery and our long-haul the surpassed mainly U.S. current while Outbound the pressure. weeks, reservations from under by XXXX June. are business outside several as Europe, have robust.

country the showed and benefiting reopening brands further May, April in improvement of borders. restrictions of and international travel relaxation Our from

China With for line As in open remain the COVID will protocols the domestic continues operator, threat control to growth please to opportunity market, the we to global while the loom cost strict keen in market. that, adopt continue the seize questions.

Please Your first Alex Thank Poon with ahead. you. comes go [Operator Stanley. Instructions] from Morgan question

strategy, Thank you, business with taking near-term glad very the remote? is It’s recovery for my the still travel management, travel about in for questions. chance to global given more much. us see global pure international share Thank expansion recovery. probably you the Can your your outbound management

you. take Thank James will Yes. first the question.

you. Thank

foundations needs have customer to our state our helps for been in restrictions app In and further are years with the giving lay X a boost in throughout removed. cross-border the have quarters, increasing strong the Trip.com integrate continue share international we strengthen We further and growing market in markets, the supply more in past and been to working brands and tentativeness once the which strong previous the growth and will local the travel brands of for chain comfort, usage to technology awareness product of close all our reliability suppliers efficiency address our with Europe, In upgrade brand region. of closely collaboration Asia service. patients, and

restrictions, more strong we synergies recovery As are their our glad international brands. have more and across pandemic-related and see countries dropped travel to

significant in platform increase approximately over our As gain second prepared global on hotel growth in markets. global managed XX% which The contribution our our overall achieved we have domestic overseas have Trip.com booking increased the shared XXX% XXXX air from ticket the versus continued with in in by QX, in to year-over-year. remarks, XXX% brand year-over-year, trend upward Overall momentum reservations to global platforms reservations quarter. on

Thank you, Alex.

you. Thank

question go next from Goldman Please Sachs. with Your comes Keung Ronald ahead.

economic current on with situation James, will trend, the you, – and kind Thank compounding broader does recovery recovery reopening the Thank first expectations expectations is then border reopens? And have the Cindy. How you. of further future for the domestic how to the situation ask I just Jane your and expectation recovery change your lastly, your momentum set and might market? travel for once recovery? outbound the pandemic current what want

and recent We the Ronald. have domestic global hotel travel changes believe outbound China demand policies China that the restrictions, for to very being the total are weeks our and travel, the And the but the when country travel of in of brands as level open noticed China, recovery In very not global controlled. better still the to ease travel travel demand especially is countries. believe time during months. quickly there. solid. across you, domestic the momentum the in the the Thank the comparatively to XXXX about the the Southern see expect demand areas Thank fewer see encouraged the level drastic inbound optimistic surpassed in following hotel very And the X our pre-COVID domestic travel also travel rebounded quick summertime, for future near border. as outbreaks do Though It’s is you. restrictions and just Western international reservations the decided that outbound the with a pent-up we recovery the very strongly reservations see past already in such got travel pent-up the and in strong of recent to matter we we where we also the

Jane. you, Thank

you. Thank

question ahead. comes Please with next Your Citigroup. from Brian go Gong

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Yes.

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Thank you.

comes ahead. question Thomas from Jefferies. next Your Please with go Chong

trend ask rate? Hi. Thanks my we as questions. the How question Accommodation Thank you. should as ADR take about for I the for about well May management segment? the taking think the the

travel you, industry Thank negatively outbreaks multiple whole the Thomas. affected the in was Because provinces. by

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comes Your ahead. from next Wei with go Xiong question Please UBS.

term? in Good for the changes how e-commerce for are you could travel popular, of landscape do we incremental the we have we if them term, how example, to for more opportunities. management. as platforms some Also that structural and taking we that booking travel streaming affect longer question longer related Thank how since opportunities live the at OTAs? these is morning see the do getting that, breakout, could look COVID that play vacation and you. or grab seen short-haul – Thank my role question. about My to competitive content-driven these the think positioned And we

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in days the short-haul the working user travel travel we over innovations. to case years, in restricted. travel To-date, a long-haul has past short-haul very X where strong initiatives So, for our through key multiple and travel, short-haul build become contributor hard marketing the is domestic recovery, the very a product to are especially for

level. the increased in hotel with interprovincial about compared hotel level XXXX by actually local QX, bookings XX% with with booking over XXXX pre-COVID example, XX% grew the our For the compared

find that compared site booking. or you to so if or For customers we more can Ctrip Ctrip, long-haul future easily have because for we awareness and pre-COVID local noticed that are famous app, with actually many come level, travel, you for notice more the the products travel value did for for the booking

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so – firstly, users’ our positive we the have strategy happy and – that see Thank So, help content to revenue. to increase you. our to far, we are helped started to a contribution us, engagement secondly,

comes Lee from [Operator Instructions] go ahead. question next Your Please from Mizuho. James

Thanks taking questions. my Great. for

Given hoping, in industry, can Jane, policies consumers the to Thank travel and about was on support both maybe I some you and of the suppliers. all the tourism off government that you. industry talk disruptions for the

Yes.

need level. granularity and we cases. Jane of lockdowns, relaxations lot travel in authority reduce the and disruptions from have level province of the the more is making in made bans quarantine see the efforts with intermittent Especially China scope the cross-province industry to county increasing of and see of a government talking measures the lockdown of to in James recently, still we unnecessary of lot ongoing and from a provinces potential efforts of Omicron the glad And pandemic to the authorities. is support travel and are the With lot from related authority that the a

that environment industry together, authority the the Thank stronger. joining to you. our and will travel against with come confident challenges to players stand even hand very back the and business we are improve So, industry

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go comes Capital. Yao question TH ahead. Tian with next Your Please from

to management. I related your morning a issue. Good have sustainability cash question

off on As in the the company its and and China continued policy, several position of the quarters some so burning cash. is and this COVID’s zero-COVID in last

further room capital position is plans has any further current saving, that’s So, Is company company some any environment? the the or this raise the achieve to to the to situation current – Thank sheet? enrich So, question. for cost your company’s sustainable how you. cash is to there balance under

and we travel so industry sufficient last up to And even most liquidity believe experienced experience liquidity the place. keep become survive years, reached almost part the storm. have weather is the to been has the in Ctrip to of have stronger down we X the or the to sufficient in important

So, deposits our on in cash March time And RMBXX.X as our was close and billion $XX this or hand of $X.X And capital XX, our assets net had financial importantly, of working $X.X as products. held-to-maturity was billion. year. company to cash March XXst, including most the net billion billion

X – needs, in technology our addition frequently that to to sufficient and during business content, marketing data financing and reserves, have the liquidity savings, regard capital, streamlined operations on in years, last lines assess we have adjustments lifted business improvements cash meet cash related with certain will With financial to positions future. to our efficiencies. cross-selling latest we marketing past already combination the – from actually our And operations our confident addition, foreseeable We frequently the for cost our obligations are anticipated – further conclude are COVID. across of and including our expenditure the our flow of to existing cash working sources capital and repayment

decreased going example, cost And structures it adjusted year-over-year cost For effective total operating with XX% in we and controls. savings second the to in largely very close QX, Thanks quarter. was flexible our forward, pre-COVID our achieve further especially expect and compared to level, XX%. a to of expenses saving cost

and part in current maybe And negatively structure, our for our and business efficiencies. especially be to according And to the to for the team largely domestic impacted example, to due top to operating and extent driven. are of growth. adjusted marketing sales will ROI operations, be we recovery also, stay of line decreased Our will second the expenses bonus the we continue run with continue productive, able performance-based improve quarter, the discretional lean and the

be – impact we the level we but limited. pretty the in may on the demand recoveries, and will pent-up to the cost market, our However, investment international, business momentum overseas group in some or structure you. growth increase capture depending Thank the to

Thank our for now you. Michelle have time closing I hand the today. all That’s will Qi session back remarks. to for question-and-answer we

joining Thank you. everyone for Thanks us today.

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

Thank you.

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

may now disconnect. You