Trip.com Group believes content providers such as Douyin, the TikTok for China, will find it difficult to replicate the online travel agency experience.
The company’s chief executive, Jane Sun, who was asked about the competitive landscape in the country and different booking formats from content providers, said they have a “different core competence compared to the OTAs in general.”
She was speaking during the China-based OTA’s second quarter earnings call and added, “And they primarily focus on providing inspirations, whereas OTAs will prioritize transactions and service fulfillment. Through the robust supplier chain management and high-quality customer service, we are able to offer the competitive products, smooth booking experience, personalized and reliable travel services, [all of which are] critical success factors to provide travel-related services. And I think for the content platform, they will find it's very difficult to replicate. And at the same time, we will continue to invest in our own content strategy, helping users to find inspirations and make well-informed decisions.”
Douyin began testing calendar-based hotel search earlier this year, bridging the gap between content and transactions.
Reporting on the second quarter of 2023, the company said domestic and international demand held up.
Despite the air capacity constraints Trip.com Group reported net revenue of $1.6 billion, up 180% year over year and up 22% on Q1 of 2023.
During the analysts call Sun said average international flight capacity had returned to about 38% of pre-pandemic levels. That's expected to recover to up to 65% of 2019 levels in the second half of the year.
Adjusted EBITDA was $507 million for Q2 while net income came in at $91 million, up from $6 million year over year.
Revenue from accommodation bookings for the quarter was up 216% to $591 million, while transportation ticketing revenue increased 173% to $664 million.
Revenue from packaged tours increased 492% to $100 million in the quarter and corporate travel was up 178% to $81 million.
”We are encouraged by our solid results in the second quarter," Sun said. "With the thriving market demand and our outstanding performance, we are poised to take the lead in driving the industry's recovery and actively creating an abundance of job opportunities alongside our esteemed business partners.”
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The company also updated investors on its generative artificial intelligence efforts.
Said executive chairman James Liang, “To feel the traveler's passion and fulfill their evolved needs for unique and personalized experiences, we have launched an array of AI-powered tools as we embrace innovative ways to provide enhanced user experience. Users can chat with our upgraded AI assistant TripGenie for both itinerary and crafting and can now go directly to the product booking pages. They can also get inspirations and select the best experiences from our AI-powered curated list, which caters to users' diverse needs and preferences by capturing real-time information and authentic data. These AI-powered content marketing tools also open up new ways for our partners to highlight their offerings to our captivated audience.”
Later, responding to a question on whether AI developments from search engines could reduce or eliminate online travel agents, Liang added that the company had unveiled an updated version of its TripGenie service “capable of interpreting text and voice commands, offer contextual assistance and provide actionable responses.”
“We also launched an infrastructure of AI-generated content production as a supplement to our content creation pipeline to enhance our content quality and improve efficiency. We believe generative AI technology will not replace OTA platforms, but instead is capable to help improve the operating efficiency of the OTA platforms. Also, OTAs are well positioned to develop their own AI travel assistance with the help of their large travel transaction data and deep understanding of customer requirements,” he said.