Trip.com rides the wave of Asian travel

If the past few years have taught us anything, it is that even amid economic uncertainty, our innate curiosity to explore endures and people rarely give up on travel for long. With travel penetration and inbound tourism still well below global norms, China's expanding participation in travel represents a material future economic development.

Businesses catering to this trend present a compelling opportunity for investors, particularly Trip.com - the country's leading online travel agency (OTA) and the engine behind hundreds of millions of bookings each year. With structural growth ahead, in a market that is far from saturated, Trip.com offers an attractive entry point into China's travel revolution, which we unpack herein.

More than a hotel booking site

If you are not familiar with Trip.com, a helpful shorthand is "China's Booking.com" - though that comparison with the enormous western OTA understates the breadth of its model. It runs one of China's largest digital travel platforms and is a one-stop shop for flights, train tickets, hotels, local attractions and packaged tours. It has also expanded its offerings in entertainment-linked travel, partnering with concert and event platforms, and has created personalised products for different demographic segments, including China's rapidly growing 'silver generation'. For first-time visitors to China, Trip.com's offering is invaluable - a single app that can assist in planning an entire trip in a country where language and logistics can be a barrier.

Trip.com's reach also extends beyond China. It owns Skyscanner, one of the top global flight metasearch engines, assisting millions of travellers worldwide to search for flights.

Relationships, reach and responsiveness

Trip.com has spent years cultivating strong relationships with Chinese hotels and local tourism operators, giving it one of the broadest accommodation inventories in the market. This is important in online travel as scale is a defining differentiator for an OTA, with customers gravitating to platforms that offer the most choice.

When Chinese travellers book, most use Trip.com via mobile. With over 90% of bookings made through the app, Trip.com engages customers directly, reducing reliance on paid advertising and keeping acquisition costs lower than search-led platforms.

Trip.com focuses its inventory and marketing on China's wealthiest, most travel-active cities, rather than spreading resources thinly across every market. These hubs account for an outsized share of tourism spend, giving the platform higher volumes, better unit economics and stronger repeat usage.

Coupled with a reputation for fast, responsive customer service - including close co-operation with government initiatives such as the Nihao Programme for inbound visitors - Trip.com is establishing itself as the go-to platform for both outbound Chinese travellers and international visitors to China.

Inbound tourism: small base with room to grow

For a country of China's size, inbound tourism makes up a very small share of total travel activity. In 2024, foreign visitors represented just 2% of total in-country visitor volumes, yet they accounted for a much larger 10% of hotel room revenue. Even at low penetration, inbound travellers already punch above their weight as they typically spend more per trip.

The growth potential is meaningful. Today, China captures only 2.4% of global tourist flows, but industry forecasts suggest this could rise toward 6% by 2034. With a wide range of attractions, strong affordability and increasingly seamless transport links, China is structurally well positioned to attract a larger share of international travel over time. As demonstrated below, rising inbound volumes and higher spend per visitor could translate into meaningful annual growth in inbound tourism expenditure over the next decade.

Trip.com is poised to benefit from this shift. It is already the default platform for domestic Chinese travellers and is increasingly becoming the "front door" for first-time international visitors seeking a trusted system to book and navigate China.

China's domestic tourism boom is just beginning

China's domestic tourism sector is undergoing a powerful behavioural shift, driven by rising disposable incomes, shorter travel planning cycles and a growing desire to explore local culture and regional diversity. Increasingly, Chinese consumers are opting for weekend getaways, themed travel (like wellness retreats or food tours) and 'micro vacations' to nearby cities. This increase in spontaneous, higher-frequency travel plays directly into Trip.com's strengths.

Trip.com's Al-driven tools and curated content are starting to move the platform beyond simple listings and transactions. By helping travellers surface ideas, build itineraries and discover what's trending, Trip.com is gradually becoming more of a planning companion - supporting higher conversion and stronger repeat engagement over time.

Enhancing traveller engagement

One of the most interesting shifts in travel is destination discovery. Younger travellers in particular, scroll for inspiration long before they book. Trip.com has leaned into this behavioural shift. Instead of relying on costly discounts, the company uses content and community to spark travel ideas. It encourages users to share trip photos and videos, join challenges and engage with micro-influencers - effectively turning customers into marketers.

This content-first strategy is more than a trend as it reduces customer acquisition costs, while strengthening customer loyalty. With over 300 million members, Trip.com's loyalty programme represents one of the largest captive travel audiences in the world - a powerful advantage as the platform becomes a place where wanderlust begins, not just where bookings are finalised. The below illustration visualises Trip.com’s content-to-booking flywheel, where discovery,community and loyalty reinforce one another.

International expansion: a long-term growth engine

The Trip.com brand, distinct from its domestic Ctrip platform, is gaining momentum for travel to destinations across Asia. It is increasing market share in Singapore, Thailand, Malaysia, Japan and Korea, while also making earlier-stage expansions into the Middle East and Europe. This international push is currently loss-making, reducing group earnings by around 8-10%, largely reflecting deliberate investment in overseas accommodation supply, brand building and app-led customer acquisition rather than third-party channels.

If successful, the prize is material. International bookings typically carry higher commission rates, which apply across several important flows: Chinese travellers booking overseas hotels, foreign visitors booking accommodation within China and global travellers booking hotels outside of China. Domestic hotel bookings in China typically yield take-rates of only 8-10%, constrained by competitors such as Meituan. In contrast, international hotel distribution generally delivers higher take rates. As Trip.com's global operations mature and the early investment phase winds down, this segment has the potential to become significantly more profitable. As charted below, Trip.com’s revenue mix is expected to tilt toward higher-value business over time.

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A financially strong platform

Trip.com's business model benefits from a favourable working capital cycle. The company typically receives customer payments at the time of booking, well before it settles with hotels closer to the date of travel. This creates a structurally cash-generative profile.

Just as important is the shape of its cost base. A meaningful portion of Trip.com's expenses sit in marketing and product development - categories that are inherently more variable than traditional fixed overheads. This makes the model more adaptable as spend can be increased to capture demand when conditions are strong, or dialled back when the environment softens. Trip.com also benefits from China's cost advantage in engineering, customer support and operating talent, enabling it to build and maintain a sophisticated platform at a lower unit cost than many global OTAs.

A rational, consolidated industry

Travel booking was historically a battleground for extreme discounting in China, but the mid-2010s were a decisive turning point. Trip.com's acquisition of Qunar in 2015 ended subsidy wars that had been burning cash across the industry. Regulators tightened rules on anti-competitive behaviour and excessive subsidies, further stabilising the sector. Today, Trip.com, Meituan and Tongcheng occupy a rational oligopoly that competes on service quality and product breadth rather than price destruction.

A physical store network few competitors can match

Despite China's digital fluency, offline channels remain important. Many families still value face-to-face travel planning and Trip.com supports this with over 6 000 franchised physical stores across 300 cities.

Franchisees shoulder the physical infrastructure costs and Trip.com provides the technology and the brand. This hybrid model extends reach without heavy capital investment.

At the forefront of China's travel surge

Trip.com benefits from multiple structural advantages resulting from: China's growing role in global travel, a dominant domestic platform, a fast-growing international business with the potential to deliver higher long-term margins, a content-driven ecosystem suited to modern travellers, and a cash-rich balance sheet within a healthy industry structure. As travel within and to Asia continues to grow, Trip.com sits comfortably at the heart of the journey - a dynamic we believe creates compelling long-term value for our investors.

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