China-based travel giant Trip.com Group (TCOM, Financial) is experiencing a positive market response following robust travel demand in Q3. Prior to the report, TCOM's stock declined by about 14% due to concerns over China's economic instability. Notably, Chinese e-commerce leaders JD.com (JD, Financial) and Alibaba (BABA, Financial) reported disappointing growth, highlighting regional economic challenges.
Despite these concerns, TCOM demonstrated resilience in the travel sector, showing strong inbound, outbound, and domestic travel demand during Q3. While the impact of recent Chinese stimulus measures remains uncertain, TCOM is optimistic about sustaining its growth momentum long-term.
Key highlights from TCOM's Q3 report include:
- Revenue grew by 16% year-over-year to RMB 15.9 billion, with outbound hotel and air ticket bookings reaching 120% of pre-pandemic levels. Japan was the top destination for outbound travel, with increasing interest in Europe and the Americas.
- Lower-tier cities are emerging as a new growth driver for outbound travel, with significant increases in travel bookings from Tier 4 and 5 cities during China's National Day holiday.
- Domestically, travel patterns are becoming more evenly distributed across China. TCOM is partnering with hotels to offer package deals and enhance market awareness.
- Inbound hotel bookings doubled year-over-year in Q3, supported by China's expanded visa-free entry program. The inclusion of nine new countries, such as South Korea and Denmark, is expected to sustain inbound booking growth.
TCOM's Q3 performance underscores a strong preference for travel spending within China, despite economic challenges. Internationally, there is enthusiasm for visa-free entry to China. TCOM is well-positioned for continued growth, although government policies may introduce volatility. Nonetheless, TCOM's ability to maintain momentum is promising.
