Specialist
Former director at Trip.com
Agenda
- Trip.com (NASDAQ: TCOM) vs major OTA platforms – competition, market share and its dynamics in terms of global businesses
- Impacts from the coronavirus pandemic – challenges posed for key players, room night trend in Q1-Q3 and GMV dynamics
- Trip.com’s overseas hotel business structure, hotel resource development in major overseas markets and cooperation models, penetration rates of high-end, low-end and mid-range hotels as well as commission policies
- Trip.com’s overseas hotel business – client persona, hotel products as well as advantages and disadvantages in prices, plus growth potential
Questions
1.
What do you think is the gap between Ctrip Computer Technology (Trip.com) and world-leading OTAs such as Booking Holdings (Booking) in international business? How fast is Trip.com catching up with the top OTAs? Which top OTAs are Trip.com’s direct competitors?
2.
Booking’s international business can generate a revenue of around RMB 100bn, while Trip.com’s international business can only generate over RMB 10bn. This is a huge gap. What do you think of the hotel business of OTAs in the international market? What is the competitive landscape? How was Trip.com’s development in the past few years?
3.
Trip.com started international business in 2017. Could you elaborate on its international business development strategies and milestones in the past 3-5 years? What were the highlights and deficiencies?
4.
Why did Trip.com start to devote itself to international business in 2017? What happened at that time?
5.
The coronavirus pandemic brought challenges to international business of top OTAs. Booking mentioned in the Q1 financial report this year that the total tourism reservation volume had a YoY decrease rate of 51% and dropped to USD 12.4bn. The room night sales volume was 124 million with a YoY decrease rate of 42.8%. The quarterly revenue had a 19% YoY decrease rate and dropped to USD 2.3bn. The situation was even worse in Q2 because the room night sales volume had a YoY decrease rate of 87% and dropped to 28 million, while the quarterly revenue had an 83.6% YoY decrease rate and dropped to USD 630m. Even the adjusted EBITDA showed a quarterly loss of USD 376m. This was the first negative quarterly EBITDA that the company had after going public in 2001. Could you comment on the impact on top international players and Trip.com’s international business? What could be the decrease rate of Trip.com’s room night sales volume in Q1 to Q3 this year?
6.
The coronavirus pandemic is still raging in many other countries. Do you think the market will revive a bit or remain at a low ebb in Q3 to Q4?
7.
The overseas business sectors of Booking.com, Agoda and Trip.com may thoroughly explore the local markets in specific overseas regions. Can the demand recovery in these overseas local markets become new growth drivers?
8.
Can you share Trip.com’s region-specific strategies in the markets of Japan, South Korea and Southeast Asia? Will it have recovering room night volumes?
9.
Booking and other OTA platforms have also held such live-streaming activities. Is it a popular marketing strategy? Has Trip.com started earlier than others?
10.
Owing to the pandemic, Trip.com has tried so many new marketing strategies and thus gained broader reaches to overseas consumers. Can I regard the pandemic as an opportunity for Trip.com to enlarge its market share amid the post-pandemic recovery?
11.
Let’s focus on Trip.com’s overseas business, especially the hotel sector. In Q2 2019, the overseas business contributed to over 35% of Trip.com’s overall revenue. In the transportation and ticketing sector, the quarterly revenue in the overseas market took up nearly 50% of the total. The overseas hotel booking revenue occupied roughly 20-25%. Will you please review the overall GMV, room night and revenue growth trend of Trip.com’s hotel sector since 2017? What is the annual growth rate? What are the main growth drivers?
12.
What are the major growth drivers? If the pandemic hadn’t happened, how would Trip.com set the annual growth targets, and what would the trends be?
13.
How does Trip.com classify its global markets? How many major regions has it classified? What were the annual GMVs of its overseas hotel business over the past three years? What about its growth potential in different regions?
14.
Why does Trip.com have low market share in Europe, the Middle East and North America? Are these markets hard to penetrate?
15.
Who are Trip.com’s main competitors in its core markets and overseas markets? Are its domestic competitors, including Meituan Dianping and Fliggy, also planning to extend their markets to surrounding countries? Compared with them, how is Trip.com’s market performance? What are its weaknesses and strengths?
16.
What is Trip.com’s major channel for acquiring overseas hotel resources? Does it procure them via agencies and wholesalers or directly by itself? What is the proportion of its agency-based procurement and direct procurement, and what is its development model for hotel resources? What are its penetration rates for overseas hotels of different grades?
17.
What are the respective commission rates for overseas hotels Trip.com cooperates with, both through suppliers and by itself? How do Trip.com’s commission rates differ at home and abroad? How do they differ from other OTAs such as Booking?
18.
Could you compare Trip.com’s overseas and domestic business in terms of profit margins, considering the rather high costs of labour and marketing in overseas markets?
19.
Are Trip.com’s overseas users mainly local Chinese? Or does it have a large base of native users? What is the profile of its main users? What are its main user acquisition channels?
20.
As a new entrant, Trip.com cannot be compared with its overseas competitors on brand awareness. What is its competitive edge that attracts users? Is it better service, lower prices or larger subsidies over its competitors? Why do you think Trip.com has difficulty making innovations in management and operating models? Looking ahead, what major challenges and risks will it face in both domestic and overseas markets?
