Trip.com Group Limited

third quarter of 2024 Earnings Conference Call. Joining me today on the call are Mr. James Leong, Executive Chairman of the Board, Ms. Jane Sun, Chief Executive Officer, and Ms. Cindy Wang, Chief Financial Officer. During this call, we will discuss our future outlook and performance, which are forward-looking statements made under the Safe Harbor Provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in Trip.com Group's public filings with the Securities and Exchange Commission. Trip.com Group does not undertake any obligation to update any forward-looking statements. except as required under applicable law. James, Jane, and Cindy will share our strategy and business updates, operating highlights, and financial performance for the third quarter of 2024, as well as the outlook for the fourth quarter of 2024. After the prepared remarks, we will have a Q&A session. With that, I will turn the call over to James. James, please.

Thank you, Michelle. And thanks to everyone for joining us on this call today. In the third quarter of 2024, the China travel market demonstrated remarkable resilience with strong performance in both domestic and cross-border travel. This surge in demand reflects a recovery in consumer confidence and a growing enthusiasm for travel. The National Day holiday clearly highlighted this momentum. with passenger trips and travel bookings surpassing pre-pandemic levels. As consumer confidence rises, the demand for diversified and personalized travel experiences has become increasingly evident. During the holiday, our trip best rankings revealed notable user preferences and significant growth across themes such as family travel, food, culture, and seasonal specialties. In particular, young people are increasingly prioritizing travel in their spending, This trend is further reflected in the rising demand for concerts, music festivals, exhibitions and sporting events, which are particularly appealing to this demographic. This summer, the events featured on our trip events list have gained significant traction among younger travelers, highlighting the growing influence of such events on travel preferences. Riding the wave of this trend, we are excited to roll out our Entertainment Plus travel products. For example, we teamed up with Dunhuang City to host the 2024 Echoing Sand Mountain and Crescent Lake concert. To make this desert-side concert truly unforgettable, we added a sprinkle of fun with activities like camel riding, sand sliding and transport packages, ensuring customers enjoyed an adventure that went beyond just music. As AI plays an increasingly pivotal role in enhancing the travel experience, our innovations not only streamline the planning process, but also offer personalized solutions. In this rapidly evolving landscape, our goal is to make travel more accessible, efficient, and enjoyable for everyone. By continuously integrating AI into our services, we aim to empower travelers with smarter and more tailored options. While the advancement of AI technology revolutionizes the travel industry by enhancing customer experiences and operating efficiency, it is equally crucial to develop robust ESG practices to ensure sustainable and ethical growth within the sector. Over the years, we have diligently built a framework to embed ESG principles into every aspect of our operations and actively promote ESG adoption across the industry. Beyond our commitment to environmental stewardship, our ESG philosophy centers on people, focusing on creating jobs, fostering an inclusive and diverse workplace, and raising service standards to enhance the experience for customers. This approach benefits the broader community and promotes sustainable economic development. We are honored to receive the Forbes China Best AI-Driven and Digitized Employer of the Year 2024 award, a recognition that celebrates our efforts and motivates us to continue advancing our ESG initiatives. In conclusion, the China travel market in Q3 has demonstrated strong resilience, driven by growing consumer confidence and robust demand across both domestic and international segments. As the travel industry continues to evolve, we are confident that technological advancements and favorable market conditions will drive sustained growth and shape the future of global travel. With that, I will turn the call over to Jane for operational highlights.

Thank you, James. Good morning, everyone. As a quick overview, our net revenue in Q3 grew by 16% year over year. We are pleased to see that travel consumption in China remains resilient and delivered strong performance in the past summer vacation and the national day holiday. Outbound travel continues to experience strong growth during this peak season of the year. During the quarter, international flight market restored to about 80% of the pre-pandemic level. Our outbound hotel and air ticket bookings recovered to 120%, compared with 2019 levels, continuing to outperform the industry by 40%. Japan remains the top destination for Chinese outbound travelers, closely followed by other APAC regions. Additionally, there is a growing interest in long-haul destinations such as Europe, the Americas, Oceania, and the Middle East. Notably, citizens from higher-tier cities are eager to expand their travel radius and explore more distant destinations, while those from lower-tier cities are beginning to venture beyond national borders and emerging as a new growth driver in outbound travel. During the National Day holiday, travel bookings from Tier 4 and 5 cities surged by 100% and 300%, respectively. In the domestic Chinese market, travel demand remains robust, with travel patterns becoming more evenly distributed across the country. It is encouraging to see travelers increasingly exploring inland and lesser-known destinations, contributing to the further development of local tourism. To help our partners capitalize on these opportunities and promote sustainable growth within the industry, we are committed to innovating our product offerings in close collaboration with them. By developing hotel package deals, we can explore various use cases and address emerging customer needs. Through co-branding and mutual membership initiatives, we aim to enhance value for customers and cultivate stronger brand loyalty. Additionally, we support domestic hotels in gaining visibility among inbound travelers driving demand from international markets. With our global network, suppliers can effortlessly reach both domestic and global audiences, maximizing their exposure and impact through integrated marketing efforts on our platform. On the international front, our global businesses continue to witness strong momentum in Q3 Air ticket and hotel bookings on our international OTA platform rose by over 60% year over year, with bookings from the APAC region increasing by more than 70%. Our international OTA platform has become the most downloaded OTA app in many markets including Hong Kong, Macau, Taiwan, South Korea, Singapore, Malaysia and Thailand, reflecting the outstanding results we have achieved and our strength and presence across the APAC region. building on our success as the most downloaded OTA app in several APAC markets. Our global development efforts are further enhancing inbound travel, as these regions are also major sources of international visitors. In Q3, inbound hotel bookings on our platform increasing by around 100%, reflecting a heightened interest in traveling to China among global travelers. Notably, 25% of total inbound travelers this year have visited China more than once, demonstrating the country's appeal to repeat visitors eager to explore its rich culture and lifestyle. To capitalize on this opportunity, we offer a range of services designed to enhance the travel experience. International visitors can directly book ticket for over 2,000 attractions and access more than 8,000 day and half day tour options available on our platform. We also provide convenient currency exchange services and collaborate with internet service providers to offer eSIM card solution, ensuring travelers stay connected. At popular attractions like the Great Wall and the Terracotta Warrior Museum, We have implemented ticket vending and check-in machines customized for international visitors, allowing for expedite entry. Additionally, we offer complimentary city tours for international travelers with layovers exceeding 8 hours at Shanghai Pudong International Airport, ensuring their every moment in China is memorable. With the continuous resumption of flight capacity, improvement in entry convenience, and a strengthened inbound supply chain, the outlook for the inbound travel market is optimistic. We look forward to contributing to the industry development and assisting our partners in seizing these opportunities. We see that the travel demand among senior population continues to show significant potential and growth. In the first three quarters of this year, travel bookings from users aged 50 and above have risen by 26% compared to the same period last year, outpacing growth in other age groups. Notably, the 61 to 65 age cohort has experienced the most substantial increase, with an impressive rise of 58%. More than 70% of transactions were booked directly by senior users through our Old Friends Club channel, while approximately 20% were booked by family members using the family card function. Over half of these Silver Generation travelers come from Tier 1 and emerging Tier 1 cities. With a higher level of disposable income, This cohort exhibit a greater propensity for air travel, prefer to stay in high-star hotels, with per capita spending 30% above the group average. They also show a preference of customized trips over traditional group tours, usually with a theme of natural sightseeing and cruise vacations, seeking flexible, relaxing and enjoyable experiences. We see immense potential in tailoring nature and culture themed trips to capture the travel demand of this demographic. Additionally, seniors are becoming active contributors to online content, comprising 7% of creators and generating over 10% of all travel related material, with their output increasing by nearly 40% this year. We anticipate that this increased content output will help inspire fellow senior travelers and bolster their confidence in our Old Friends Club services, thereby amplifying the flywheel effect. Travel is a powerful tool for addressing many of the world's challenges. It creates dignified livelihoods and job opportunities while driving economic investments that benefit the environment. Representing 10% of global GDP and generating over 300 million jobs, the travel industry plays a crucial role in fostering global prosperity. Trip.com Group has been instrumental in supporting their growth over the past 25 years, providing exceptional services to millions of travelers and creating extensive business opportunities for our partners. To enhance travel experiences, we are dedicated to continuously improving service quality and are always prepared to assist with any customer issues, ensuring a hassle-free journey. Our customer service team is just 30 seconds away, ready to address concerns and facilitate smooth trips, allowing travelers to fully immerse themselves in their experiences and destinations. For our partners, we drive product innovation, explore new use cases, seize emerging opportunities while adapting to the evolving travel demands of inbound travelers, the silver generation, and the youth who seek entertaining travel experiences. Additionally, we have established 34 country retreats across China, generating employment for over 20,000 people, with 80% of recruitment sourced from local hires. Our initiatives have also boosted local income from farm products and regional goods by 30 million renminbi, contributing positively to rural revitalization. Travel is a tool for economic growth, a bridge to understanding, and a path toward a peaceful world. By fostering economic development and job creation, Trip.com Group makes a significant impact on both local communities and the global economy. In summary, our strong performance across various travel segments highlights the resilience of travel consumption and the industry's potential. With a bright outlook ahead, we remain committed to contributing to providing excellent services to our customers, bringing robust business to our partners, and creating valuable job opportunities for young people. With that, I will now turn the call over to Cindy.