Q3 2022 Trip.com Group Ltd Earnings Call
Good day and thank you for standing by welcome to tripped up Com Group 2022, Q3 earnings Conference call.
At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star one on your telephone please.
Today's conference is being recorded I would now like to.
And the whole alter it to your first speaker today, Michelle Qi head of Investor Relations. Thank you. Please go ahead.
Thank you.
Good morning, and welcome to trip don't come groups third quarter of 2022 earnings conference call. Joining me today on the call are Mr. James Liang 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 1919 five silver.
Forward looking statements involve inherent risks and uncertainties as.
As such our results may be materially different from the views expressed today.
A number of potential risks and uncertainties are outlined Egypt, they'll come group's public filings with the Securities and Exchange Commission.
They'll come group does not undertake any obligation to update any forward looking statement exactly as required under applicable law.
Jan Jan and Cindy will share our strategy and business updates operating highlights and financial performance for the third quarter of 2022 as well as some upset what fourth quarter of 2022.
After the prepared remarks, we will have a Q&A session.
With that I will.
I'll turn the call over to James James Please thank.
Thank you Michelle.
Thank you everybody for joining us on the call today.
Yes.
Thank you Steve.
Market.
In China domestic market.
No.
Well.
So much demand.
And relaxation of restrictions.
Thanks, David.
Oh.
Covid resurgence since late August .
China as I mentioned.
In the second quarter.
<unk> continues to deliver.
Better than market performance.
The hotel and air ticketing.
Revenues.
Okay.
Yeah.
In China, the adoption of a more targeted.
And precise control measures.
As to the rising power demand.
Areas of travel industry.
Chinese customers' strong demand for travel.
Okay.
Okay.
Okay.
The back half of the quarter.
And have almost fully recovered to the 19 eight.
2019 level.
We're happy to see further optimization and the recent policy adjustments.
Thanks Lee.
Solid foundation for the rebound.
Domestic travel and then recovery of cross border travel.
I mean international overseas market.
On the growth trajectory and progress towards full recovery.
And then with level.
All hotel bookings in our global platforms in Q3.
45%.
2019.
2019 level three consecutive quarters.
Reopening of borders.
Lifting quarantine measures to Asia was bringing relief to the travel industry in the region.
Okay upswing presents an opportunity for us.
Okay.
The global.
Okay.
Hello vision and strategy.
As we remain focused on creating value and providing a frictionless customer experience to our users will be able to.
Thanks Shannon.
Gross.
And then the travelers.
Okay.
Charles.
Strengthening the cooperation with Alibaba.
Right.
And the call Brian .
Hum.
<unk>.
One stop service model.
Many of you there.
This needs a price point.
The liability.
It is encouraging to see continued growth.
With these market.
Even when the demand for revenge travel that's already been largely.
Lee.
And the global market continues to recover with China market heading towards further patients.
Notwithstanding.
Turning point.
We remain confident and positive long term growth potential in the travel industry.
Capability and position in the market.
We're being cautious in the near term.
And then uncertainties.
Fully prepared to rekindle the magic.
With that I will turn the call over to James for operational highlights.
Okay.
Thank you Jay.
Morning, everyone.
I would like to start with Chris.
Hum.
In the third quarter.
Operational highlights.
Overall performance.
I'm trying to market.
In the first quarter of <unk>.
China domestic auto industry still robust recovery following the evening.
And then the situation in June .
Our students are strong demand in the summer.
China domestic hotel bookings.
Hello <unk>.
19 nickel Charleston.
<unk>, 50% in July and maintained its positive.
In August .
And then the three seconds since late August .
Our domestic hotel bookings.
You managed to recover.
And domestic wholesale revenue increased by 25% year over year why is the same system.
Hmm.
This quarter.
Right.
10090, <unk> for example.
It's really taking that as a result.
It used to be.
Hello, David.
Okay.
My older one distribution center.
Sequentially.
The previous quarter.
Thank you Mary Ellen.
Charlotte and then for long haul travel and a shortage of strong performance with the market.
Okay.
Second on the global markets.
Yeah.
Global markets fulfillment continuity.
Across the board.
Borders opening.
Foreign key measures.
It's more in a more even became angry a return.
Following in Japan and Taiwan.
Yeah doors to Paolo.
<unk> also announced.
The formal quarantine or international elements each September .
Opening up.
East Asia.
It accelerates it.
February peak.
In APAC market.
That's true Southeast Asia.
Last year and now already.
Sure.
Performance.
Air ticket booking.
Our global platform.
Hello, Washington.
Yeah.
While air ticket booking EMEA and American markets.
To show double digit year over year.
In Asia Pacific.
The growth was stellar at.
At over 400% above periods.
Two one.
We expect to see such momentum.
Into the fourth quarter and hopefully.
That's been seen 19 level like that.
So called channel overall for example, our.
Our global platform.
C by over 45%.
In 2019.
Third quarter.
Domestic hotel booking.
Now China market.
Great.
Thank you Nikki.
As the growth in the global market remains robust we continue to outperform industry.
All our major markets.
In Asia Pacific region.
In the third quarter, our hotel booking Indonesia, Malaysia.
Southeast Asia et cetera.
Also a quick one.
It shouldn't be 19 minutes.
The market has been growing.
Well, what the previous suites consecutive quarter.
We anticipate further growth.
The Asia market.
Now on the finish line first of all accommodation.
Accommodation.
Thank you Sir.
Okay.
At the core of our one stop shop.
Shell peanuts.
We continue to invest.
Our value proposition.
Our customers and our hotel partners.
In China domestic market.
Continuing to strengthen.
Okay.
In market efficiency.
E G.
Additional value for our partners and so tied to our relationships.
Wanted to differentiate ourselves from the other players.
We maintained focus on creating a win win situation for the party on the value change through our plus program.
Users can enjoy extra benefit and our partner hotels.
Access to our pool of high quality in order to consumers and create incremental upsides.
<unk> Street.
8% of our chipsets are innovation come from high end hotels.
In the lower tier cities, we continued to push full like our corporate membership programs.
Our customers see.
Only domestic brands.
Also tightening internal collaboration with <unk> and <unk>.
Hi.
Fishing efficiency.
Rice competitiveness.
Cross sale for a long time.
Only product.
On the international strength, we continue.
Sure.
Our local markets.
Okay.
<unk> brand awareness and capturing local user demands.
I swear with symphony or tie with similar core suppliers.
They're all expansion.
Coverage.
It's an average our unique and competitive.
I'll phrase to gain sections to a large audience.
Four improving our market penetration.
We continue.
The push forward with localization and the user experience upgrade initiatives.
Well you can tell.
<unk> tweaked why high user engagement and stickiness.
Which will essentially.
So a higher level.
Frequency.
And the user retention.
Following through with us.
Recovery of global travel and tourism.
Our overseas activities.
That's right and considering we set record high Fortunately T&D increasing.
A 15% year over year.
Yeah.
Collaboration please keep others, what's your email.
To do that.
A lot of competitive.
And then changing the market.
We have been making great progress in our major market across the Asia Pacific and Trans Atlantic region in the World coffee.
<unk> experience.
Other than that.
Our user engagement.
It is of the global economy.
Well.
Apache straight years from travel preference and decision making process.
Third quarter, we continued to improve our content generation and the user engagement capabilities.
In September .
76% or more content being generated by our users when compared to the same period last year in terms of the user engagement.
Can you duration.
Our content.
Increase.
Yeah.
Number of content.
For us it also increased by about 25%.
Sure.
Furniture responsibility.
Easy every chance to create value.
Our customers and our partners.
Our mission to pursue a perfect Chick Fil a virtual world.
So guiding us to positively impact society and somewhere else.
We care about our communities we operate in.
We are connected to.
Engaging with local market and then getting back to that.
Right.
According to Ducker TTC forecast.
And tourism sectors.
January 22.
56 million additional jobs in the coming 10 years from 2022.
Me too.
In which 65%.
Well be in the Asia Pacific region in general and 25% and shiny take care of that.
Is can I squeeze our mission to help create a job opportunity and it's interesting.
The real economy.
With corporate responsibility pillars to our Hearts, we continue to push forward with our rural revitalization initiatives in China to empower now close to <unk>.
John the tourism and to pursue common prosperity. We currently have 13 ships.
Thank you rich.
In operations.
Multiple provinces, including currently unknown <unk> Joshi.
Second.
We also expect.
The multiple around revitalization Academy.
Professional painting too.
In General post.
That's a continuation of our project to be Wishy washy knowledge.
Here you can see when pandemic took place Abe.
Our global accounts and driving.
Our niche dependent.
We recently launched a project E S and earthquake.
Thanks for joining us.
And any sense for reaching a new peak.
Project E is launched with studies to reviewed our friendly image.
And revised consumer confidence.
Improving our product.
And our service offerings to.
To reunite industry.
Knowledge and beauty industry Incubation center.
And to re establish the industry's social and environmental responsibility by pushing forwards.
Our next project too.
To promote.
Hum.
In overseas market. We also encourage users to think and act together the practice intervals Cabo.
In South Korea, we count.
Campaigns I, combining these chunky and Mr. P T.
Part of our work environment with April cuts.
Also language content campaigns.
Singapore Korea, sometimes right for.
So users to share eco friendly experience it.
Dot Com was also named a chin can't forget.
In Singapore.
In conclusion, we are delighted to see the world truly don't open and willing closer towards let's see.
We are proud of our strong results.
Our team.
Such challenging market.
We are glad to see further optimization in China.
Okay.
Yes.
Which includes.
Actually scraping.
Q I'll call it choppy.
Yeah sure.
For me quarantine period.
Patients with no <unk>.
The symptoms.
At home.
And where the movie.
Great.
Tenants are in flight right now.
Oh, the restored flight capacity.
We believe <unk>.
Well actually benefit the recovery of the travel industry.
We may still have to embrace uncertainty from a surge in COVID-19 cases in the short term.
A coffee.
And long term outlook for the industry and opportunity ahead of us.
With that I will.
I'll now turn the call electric T&D.
Thanks, Jake good morning, everyone for the third quarter of 2022, <unk> Dot Com group recorded net revenue of RMB.
$6 9 billion.
Resenting, a 29% increase from the same period last year, and a 72% increase from the previous quarter, primarily due to recovery in China domestic market and the strong performance in our overseas market.
Accommodation reservation revenue for the third quarter was 20, Turkey too.
RMB, two 9 billion, representing a 32% increase.
By year end.
114% increase quarter over quarter.
Recovering to 17, 1% after 2019 level.
This was mainly due to the resilience of local and short haul travels which are less impacted.
Pandemic.
And a brief recovery in long haul travel following the easing of restrictions in July and August why offset it.
ROE resurgence in late August .
I'll take recovery in our overseas markets also contributed to our hotel business performance.
Acacia ticketing revenue for the third quarter of 2022 was RMB two 6 billion.
<unk>, a 44% increase year over year, and a 49% increase quarter over quarter recovering to 17.
After 2019 level.
This was mainly due to the easing of travel restrictions in July and early August .
Domestic long haul travel.
Of course, driven by the summer demand.
Transportation ticketing performance quickly went soft or the second half of the question.
Due to a new round of virus outbreak since late August .
Yeah.
Our international business maintained its growth momentum and was rapidly recovery.
Packaged tour revenue for the third quarter of 2022.
387 minutes, which remained stable year over year and represented.
217% increase quarter over quarter.
Recovering to 24% after 2019 level. This was mainly driven by the strong summer demand in the first two months of the quarter.
Oh, great travel revenue for the third quarter of 2022 was RMB 317 million, representing a 9% increase year over year, and 76% increase quarter over quarter.
10% higher band of 2019 level.
Now really due to the easing of relaxation of travel restrictions in July and August .
Excluding share based compensation charges, our total adjusted operating expenses.
Greece or by 15% year over year and towards a saving of 22% compared to the same period in 2019.
Adjusted product development expenses for the quarter increased by 43% from the previous quarter and was a savings of 10% compared to the same period in 2019.
Adjusted G&A expenses for the third quarter increased by 46% from the previous quarter and an increase of 4% when compared to the same period in 2019.
These were mainly related to the increase in performance bonus paid to key operation and technology teams to reward their excellent performance.
Accordingly.
Hi, Jeff.
Marketing expenses for the third quarter increased by 76% from the previous quarter, mainly due to increased amount of marketing investment in China.
In overseas market to capture the strong recovery in demand.
We're still assuming a 43% compared to the same period in 2019, as we continue to speak with our stringent cost control protocols.
Adjusted EBITDA was RMB, one <unk> billion for the third quarter compared to RMB 537 million in the same period last year and RMB 355 minutes in a previous quarter.
Adjusted EBITDA margin was 21% for the third quarter compared to 10% in the same period last year and 9% in the last quarter.
Diluted income per ordinary share and per ads were RMB 41 cents.
The us dollar.
For the third quarter of 2022.
Excluding share based compensation charges and fair value changes of equity security investments and exchangeable senior notes no GAAP annuity income per ordinary share and per avs.
158, or USD <unk>, 20% for the quarter.
As of September 32022, our balance of cash and cash equivalents.
Cash and short term investment held to maturity time deposit and financial products was RMB 62 billion or U S. Dollar eight 7 billion.
Turning to the fourth quarter of 2022, we would like to share some color of our business.
To date.
Mystic travel performance was soft due to xyrem with surgeries.
The pandemic control measures.
According to public data industry level air passenger volumes in October and November 17th.
70% to 80% below the 2019 level.
The hotel side were slightly better and a more resilient local and shortfall of demand with industry levels for shell rack com, 40% to 50% below the 2019 level.
In such times of difficulty we are glad to see our business.
Outperform the industry across segments with local hotel reservations, maintaining positive growth in the first two months in Q4.
<unk> announcement.
David pandemic related measures in mid November send positive signals.
We were encouraged to see subsequent improvement in the domestic travel reservations.
We are also happy to see the authority continues to soften it's cold. It rules in December we said dropping off house QR codes, and PCR past results checks before entering most public areas and salary across cities.
Although relaxation.
Outside of China.
Travel momentum in Europe , and U S remains largely stable in this quarter to date, despite uncertainties and challenges from macro environment.
Our business recovery in APAC, excluding China also continues to accelerate and we hope to see better performance in the coming quarters.
While the world has been leaning COVID-19 behind gradually entry a post pandemic era.
They still have to go down a choppy recovery path in the near term.
Uncertainties continuous linger and things out of English Street in company's control.
We will continue to stick with our spending protocol and cash flow management, while I remain cautiously optimistic.
<unk> environment and be ready to seize any opportunity in the coming future.
With that operator, please open the line for questions.
Thank you we will now begin the question and answer session to ask a question. Please press star one one on your telephone you had that you ought to make good message to wisely Yohan. This race candidly.
Candidly beat your questions to one question each time.
This time by while we compile the Q&A roster.
First question comes from the line of Alex Yao from J P. Morgan. Please proceed.
Good morning management team. Thank you for taking my question.
Who do you you mentioned that the Williams would be being hopefully be harmed what are the trends you have seen user behavior and what these companies do.
Would it be Oklahoma.
Also you mentioned there could be.
Nishu.
So I'm curious can you share with us your observation for lending trying to business in recent weeks. Thank you.
Yeah.
Thank you for the question.
To see the global travel demand continued to be resilient, even in the demand substantially over previous quarters.
And the global economy continued to show strong performance.
Challenges, we expect to see a similar pattern.
In China, and our confidence and a strong desire.
Chinese travelers in a post COVID-19.
Carlo preferences.
That's been evolving well with D. C is the new norm.
<unk>.
For example.
Yes.
As only rice is remote working.
And accessible.
Okay.
Also become a new preference for many users.
It's huge.
Community in the leisure segment, which has been our expertise in the past decade, and we continue to make achievements.
And our local focus and vision.
Okay.
Right.
Innovation strategy penetrating into lower tier cities.
Hi.
User engagement.
Yes.
We're also leveraging our content strategy and I want to stop that and to build a solid foundation.
Great.
Post Covid era.
Okay.
Yeah with regard to the recent.
Bookings trend China's recent optimization.
Colgate, Massachusetts.
A significant step forward is quite encouraging.
The whole travel industry.
We actually saw very strong sequential increase in domestic flight and hotel reservations in the past two weeks.
Following this announcement.
And the execution of this new measurement across cities.
But in the very near term, we are still cautious as we enter it's usually a slight fever for both business and leisure travel.
It also might take some time for people to get through the first wave of infection.
For travel demand cooked fully released and <unk>.
But we anticipate to see a very nice rebound in growth in the domestic the domestic travel segment.
Next year.
Thank you.
Okay.
For the questions next question one moment. Please our next question comes from Thomas Chong of Jefferies. Please proceed.
Hi, Good morning, Thanks management for taking my question.
Can you share more color about the domestic piece and that be comfortably into full public color. How we should think about that.
Domestic E B, all and quick weight as well as about how we should think about the international ADR and take rate.
Thank you.
Thank you Thomas.
In the in the first two months of Q4, our domestic travel momentum was pretty much muted due to the spread of Covid cases, and especially the very strict cost control measures.
In October and November industry Air passenger boiler was about 70% to 80% before the pre COVID-19 level with the help of all saw comparable a resilient local and shop at the bank and the hotel industry Revpar, what steel, 40% to 50% below that.
Pre COVID-19 level according to public data.
But we are very glad to see our business continue to outperform the industry across beckman in such a very difficult time and our local hotel reservation maintained a positive growth in the first two months it.
In the in the fourth quarter.
With regard to the domestic.
With regard to the a b R E.
Generally they move in the same direction at the overall travel demand.
Our ADR has fully recovered to pre COVID-19 level in.
In July and August in the summer Ah and was done at the arm starting from September eight.
ATI with both are below the 2019 level in the past two months.
And the quick way.
Has been quite stable.
With regard to the International Hotel ADR at the hotel ADR all our international platform are still recovering towards the pre COVID-19 level, but has that improved significantly on a year over year basis.
Which partially contributed to the revenue recovery. Thank you.
Thank you for the question one moment for the next question next.
Next question rehab James Lee from Mizuho Group. Please proceed.
Hi, Thanks for taking my questions. Congratulations on very good results on the international business and maybe on that topic.
Yeah can you help us maybe breakdown the international performance, maybe by brand by product and maybe by region and just give a sense how much of a recovery.
In the quarter and how should we think about the revenue contribution coming from international markets.
Sure I'm, a third quarter or the global travel market continues to recover I did.
By Pat when you go to market.
In terms of the performance by our different product as we shared in the prepared remarks. The overall air ticketing booking all of our global platform has increased to over 100% year over year and to recover to 80% to 90% of 2019.
Level in the third quarter, our non Chinese hotel bookings on our global platform.
Grew more than 45% versus the 2019 level.
Our reservations well our attraction tickets and embark nisha activity a global platform maintained at triple digit year over year growth, which is a 30% growth sequentially in the third quarter.
In terms of a different religion, despite tat wings in the Europe and the American market such has no shortage of air capacity and labor strikes in the summer revenues from our EMEA and American market remains well above the pre COVID-19 level.
Over a year basis.
Reservations maintained a high double digit growth.
And travel activity in the APAC region rebounded very quickly in.
In the past the summer.
With flight reservations up 400.
Percent year over year, and both our air and hotel reservations in the APAC region are making solid progress towards full recovery to the pre COVID-19 level.
In terms of the total revenue contribution from the international platform and grew more than 140.
Yeah over here.
Which country beauty about 15% to 20% Oh volatile to revenue in the third quarter.
And the EBITDA margin of certain international brands have reached all even surpassed the pre COVID-19 level in the Q3. Thanks.
Thanks to the continued revenue recovery and improving in the operational efficiency. Thank you.
Great. Thanks.
Thank you for the question one moment for the next question.
The next question as we have talked shall from Barclays. Please proceed.
Thank you very much for taking my questions.
Kevin.
Yeah.
Chinas.
Yes.
Has been very decisive.
Swift.
If you can share some of your thoughts about the outlook for Chinese new year.
No.
Back to school.
Hopefully you all look.
Outbound, which.
I'm trying to do.
March.
Why do you think that a spike.
There is going to happen sometime next year, how that's going.
Uh huh.
Balls.
Thank you so much.
Thank you.
So the calendar of the Chinese new year, it's not Oh.
The parties there Kevin.
One of them, it's not a big holiday in China.
Hum that due to the short booking window the visibility of course Green Festival.
The Chinese and Indian reservation.
At this moment is still no. However, the search interest went up.
By sweep Han.
Photon following the.
The announcement of the new corporate policy. We are also seeing significant increase.
Reservations as well, but the current orders are not meaningfully.
To forecast the travel activity include festival Jeff.
First off does very short booking windows are in the past couple of years.
Hum.
And then with regard to the recovery of the the outbound travel following the recent release of Covid policy optimization and the messages that the authority will continue to refine cross border related health care measures.
Well I think its reasonable to anticipate a further changes.
That will facilitate that.
Cross border travel and many airlines also announced the plan to increase international flight capacity and to date. The average week Clayton found an outbound flight has more than doubled in the past four to five months or so.
To about 10% of 2019 level and Oh, it will continue to grow.
Following Furthermore, following the release of the New policy November the search volume for inbound and outbound travel skyrockets in the subsequent stages a day.
Cross border Air ticket reservations in mainland China also reached the highest level.
2020.
To date move bonds and outbound flight reservation recovered to about.
20% of the pre Covid.
Level.
With regard to the outlook all bowel recovery outlook.
Toward the next year.
We are encouraged to see the very strong rebound off of travel demand.
The overseas market in the previous quarters, and we believe it is the same case in China, where travelers, especially the mid to high end traveler also have very strong desire to travel.
Internationally.
Thank you.
Thank you for the questions.
The next question comes from Alex Poon from Morgan Stanley . Please proceed.
Thank you for.
And for taking my questions. Congrats on very strong results future outlook and everyone keeping good health. So my question is related to.
So I think as things are getting reopened we will too.
I'll go very quickly so how should investors think about.
Once we get back to 2019 level.
I've got to make a future growth drivers.
Thank you very much.
Oh, yes.
Yes, so for the future growth, we have seen very strong pent up and then in a long time assess the government to relax the policy.
The OSI test a search of the search for both domestic travel as well as our international travel.
Fortune Dot com will catch domestic travel international travel very positively first of all.
Thanks for the.
Kabul for people, who are staying in the high end hotels, a value for money and also our comprehensive product offering has been very well liked by our customers who prefer to stay in the high end hotels. So that segment has.
Oh enjoyed a resilient growth in the past even during a very difficult time.
Secondly, our team also penetrate further into the lower tier cities to encourage the users engagement and make sure. We are happy to dis attached to market as quickly as possible.
Suddenly for international travel because we offer a very high end of the comprehensive product as well as a solid customer service, we're able to bring other customers who have the interest to travel abroad.
The during the lockdown and with the relaxation of the trouble we have seen a huge a search for the outbound travel and going forward in the long run that will become another very strong.
Our initiatives for our team to capitalize on so overall I think with domestic travel as well as Internet International travel are the opportunity.
It's a very oh.
Prevalent.
Our team is working very hard to spend to strengthen our service product and also the technology infrastructure to build that in.
Try to enable our customers to see the best of the domestic attractions as well as well as the global attractions.
Thank you.
Thank you.
Thank you for the question one moment for the next question.
Our next question comes from Pinho from Th capital. Please proceed.
Well Marty Robbins.
So oh well costs lower.
Corker, both Moslem I'll pause and Watson.
Yeah, Hi.
Well I won't occur going forward.
And a coffee.
<unk> margin and the law.
Thank you.
Uh huh.
So the there are two.
Major part of our call.
Of all our expenses side, one is on the people side. The other is found itself in marketing so on the people side. The total head count actually remained stable sequentially and even slightly lower in the Q3, a year over year basis.
And going forward, we expect our total staff level to a rainbow are generally stable.
Stable.
Especially for the China domestic Cup business.
While the cost per headcount.
I told according to the performance of the company are on the sales and marketing side, we always follow a very strict to ally drove the investment protocols for our sales and marketing spending and a large majority of all itself our marketing expenses.
It's discretional Hum in the Q3, we actually increased the investment in sales and marketing activities.
China and overseas market just to capture all the very strong recovery momentum, especially at the beginning of the Q3 and our marketing spending in China with swiftly scaled down in the second half of the quarter as the travel demand declined due to the emergence of Covid cases, and as well as the.
Great.
Travel control measures are going forward.
We will.
Keep N N Giles spending protocol and be adaptive to the fast changing environment just to swiftly capsule the recovery opportunity.
And two of total resources.
In a tough time.
In addition, actually hour improvement on our content offering and.
Our app strategy and cross selling and technology will also help us to continuously to improve our marketing efficiency.
Especially in the long run.
So in terms of the operating margin.
We always are explained we think or we have a very good business model and.
When that business can return to a normal level, we can have a very reasonable.
A reasonable and healthy.
Operating margins going back to at least up to 22, 7% level.
Thank you.
One quick one.
Thank you for the question. The next question comes from waste shrunk from UBS. Please proceed.
Yeah.
Good morning management. Thank you for taking my question.
I want to hear your updated thoughts on the domestic competitive landscape because as the domestic travel market is set to recover next year do we expect the competitive pressure to increase for example from other otas stepping up subsidies or from potential new entrants into the market.
And if that happens what's our strategy to defend our market share. Thank you.
Yes, so full competitive landscape I think our focus has always be a customer first and all upon the second if we do both well the results would show a itself and we will stand out in a competition. So what we have seen is a stabilize the market.
With the.
Pandemic everything evening out.
And the market is very stable.
Whenever we're able to capitalize on the opportunity in a couple of friends.
First of all the same C T travel and short haul travel is growing very well and that is due to the pandemic a lot of people are attorney.
Travel within short distance, which they have more control in that segment of our market.
Growth is very strong we have seen.
Pick up in that segment.
On cross sell.
For a one stop shopping.
We're able to cross sell that product would be.
Can be used and that is very efficient in terms of U E.
Okay.
First of all.
Okay.
Uh huh.
[laughter] to upsell based on distance for example, when they arrive Isa.
Attraction.
Not only were able to sell one product.
Based on our understanding of the customer normally will be able to help our partners.
Certain job, where ethic area to upsell for these product and because tripped up.
Neville attracts high end high quality customers, we know.
Normally are able to help a lot.
To maximize their sale.
Sales in the region and thirdly is the engagement.
And customers on site, what we have seen is the enhancement of our product and our content.
More customers on call last night and to use. This engagement is you can see as well if you look at the time they spend on our sites is increasing every year and user engagement. The interest for people to do research with Knight and use our products to cross.
Oh by different product on site.
So very effectively so these are the strengths, we have and if we truly listen to our customers and always put their interest first and also help our partners to.
To weather through the storm, we won't be able to stand out in the competitive landscape.
Thank you.
Thank you.
For the questions.
One moment for the next question.
Our next question comes from Brian Gong from Citi. Please proceed.
Thanks management for taking my question, just a follow up to our overseas business, we have seen some challenges.
But to the lending markets.
Hopefully, we think a bulk of the recovery.
Our international brands into the fourth quarter or into next year.
How do you think the changing and on that point.
Environment, we all change your strategy and what will be the.
Impact on your spending thank you.
Yeah.
Yeah. Thank you.
Our growth.
Oh the international.
Our platform actually we see are the as I explained before although there are some halloween in the macro environment closely.
So far we didn't go unnoticed to too much impact at all on overseas the platform both.
Both in the.
European EMEA area as well as the U S.
And then maybe because we are still in the very early stage of our development in the overseas market.
And that our comparable basis, a very small but.
But I think as long as we can continuously improve our product offering as well as a very efficient.
Sales and marketing are initiative at all.
Sales and marketing.
Our spendings.
We want our we are very confident we can continuously to achieve a healthy growth.
In the in those regions.
With regard to the APAC region.
Cause the Asia Pac region has just started to reopen to compel a bully. We also have a very a pretty strong product offerings as well as the brand recognitions in the region. So in the next year, we think we have that break.
Good opportunity to catch up.
The pent up demand recovery in this region. So overall, we are still quite optimistic on the continued growth.
For our international market.
Thank you.
No further questions.
Our next question comes from the.
Uli Chung from Hi, Tom International. Please proceed.
Right.
That's true.
Could you share more color on the trials.
Could you update us, especially with Coca Cola likes it.
Would you process the strategy.
Our expectation in Q2.
Yes.
Yeah.
Sorry, I didn't hear it clearly are you asking for the content strategy.
Right I was wondering did you process.
On the strategy.
And I can kind of work would it be don't want expectations.
Thank you.
Okay. Okay. Thank you.
So actually the behavior itself, our global travelers have evolved over the past three years are from their travel preference to decision making process.
It is the go off our content strategy to inspire and provides credible a recommendation to empower travelers to discover the most unique things to do that.
The year.
Around the world, but so in the in the third quarter, we continuously to improve our content generation and user engagement.
Ability.
In the in the third quarter, the number of content creators increased by 20% year over year and the amount of daily average.
D C and content continue to grow year over year. For example in September there were 76% more content being generated by our users when compared to the same period last year.
With regard to the user engagement the average viewer duration all content platform increased by 8% year over year and the average number of contents billed per user also increased by about 24%.
The conversion rates also adapt nations related content increased by 14% to 40.
Yeah, 244% in Q3 from the first half of this year.
There is no particular form of content that will always go viral.
Actually instead of pursuing a creation of Mira content.
We remain focused on providing the most suitable and twin batesville contents that can easily be exactly by users through search and filters are this is asked me why we created the trip back to life.
Which have bucket list of travel topics with credibility and authenticity as we believe professional trustworthy and easy accessible recommendation.
Plus one stop.
Our service model.
Well enable trip they'll call ctrip to build a close loop travel ecosystem going forward.
Okay.
Thank you for your questions.
With that I'll like to turn the call back to Michelle Qi from the company for closing remarks.
Thank you.
Thanks, everyone for joining us today, you can find the transcript and webcast of today's call on investors don't treat Bill Com. We look forward to speaking with you on the fourth quarter of 2022 earnings call. Thank you and have a good day.
Thank you very much.
Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Yeah.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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Okay.
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