Q4 2023 Trip.com Group Ltd Earnings Call
Operator: Good day, and thank you for standing by. Welcome to the Trip.com Group 2023 fourth quarter earnings conference call. At this time, all participants are in a listen-only mode.
Okay.
Okay.
Good day, and thank you for standing by what each of the chip Dot Com Group 2023 fourth quarter earnings Conference call. At this time, all participants are in a listen only mode.
Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you are going to press star one one on your telephone; you will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Michelle Qi, Senior IR Director. Please go ahead.
After the speaker's presentation, there will be a question and answer session to ask a question to recession, you want to press star one on your telephone.
Didn't hear an automated message advising your hand is reyes towards really a question. Please press star one again.
Please be advised that today's conference is being recorded I would now like to hand, the conference over to your first speaker today, Michelle Qi Senior IR Director. Please go ahead.
Michelle Qi: Thank you. Good morning, and welcome to Trip.com Group's fourth quarter and full year 2023 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 provision of the U.S. Private Security 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.
Michelle Qi: Thank you good morning, and welcome to chip they'll come Corp's fourth quarter and full year of 2023 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.
Speaker Change: During this call we will discuss our future outlook and performance, which are forward looking statements made under the safe Harbor provision of the U S. Private Securities Litigation Reform Act of 1919 five.
Speaker Change: Forward looking statements involve inherent risks and uncertainties.
Speaker Change: As such our results may be materially different from the views expressed today.
Michelle Qi: A number of potential risks and uncertainties are outlined in Trip.com Group's public filings with the Security and Exchange Commission. Trip.com does not undertake any obligation to update any forward-looking statement, except as required under applicable law. James, Jen, and Cindy will share our strategy and business updates, operating highlights, and financial performance for the fourth quarter of 2023 and the full year of 2023, as well as an option for the first quarter of 2024, and we will have a Q&A session after the prepared remarks. With that, I will turn the call over to Jim. James, please.
Speaker Change: A number of potential risks and uncertainties are outlined each of Dow com group's public filings with the Securities and Exchange Commission.
Speaker Change: Trip Com group does not undertake any obligation to update any forward looking statement, except as required under applicable law.
Jim Jim and Cindy will share strategy and business updates operating highlights and financial performance for the fourth quarter of 'twenty to 'twenty, three and the full year of 2023.
Speaker Change: Also with first quarter of 2024.
Speaker Change: And we will have a Q&A session. After the prepared remarks with that I will turn the call over to Jim.
Jim: Jim Please.
James Jianzhang Liang: Thank you, Michelle, and thank everyone for joining us on the call today. China's border reopening in 2003 has ignited a global travel surge. Our enhanced leadership in product and service has empowered us to significantly outperform the market. In 2003, our core OTA business reached a record high, achieving a GMV of approximately RMB 1.1 trillion or USD 160 billion.
Jim: Thank you Michelle and thanks, everyone for joining us on the call today.
Jim: I was born in REO financing.
Jim: Neither the global travel search.
Jim: I mean has the leadership in product and service.
Jim: It is too significantly.
Jim: Market.
Jim: In 2023.
Jim: <unk> business reached a record high.
Dan we have approximately RMB, one 1 billion.
Jim: Our U S D.
Dan: Thank you.
James Jianzhang Liang: It marked a yearly increase of nearly 130% and a growth of about 30% compared to 2019. Concurrently, our total net revenue also grew by 122% year-over-year and 25% compared to 2019. We significantly improved our adjusted EBITDA margin to 31% in 2023, which is the highest level over the past decade. In September 2023, we will begin.
Rob: It's Rob.
Rob: Danielle.
Rob: Thanks.
Rob: About 30% compared to 2019.
Rob: Our total net revenue also grew by.
Rob: 22% year over year, and a 25% compared to 2019.
Rob: With significantly improved.
Rob: The EBITDA margin to 31% in 2023, which is the highest level over the past decade.
Rob: September 2023.
James Jianzhang Liang: Buying back our own stock using the existing quota. Additionally, the board has approved the 2024 capital return program, further increasing our overall quota to a total of USD581 million. This decision demonstrates our strong confidence in the long-term value potential of the company. The Chinese travel market has been growing significantly, with outbound travel playing an increasingly large role due to easier visa access and the gradual resumption of international flights. Our global business is also thriving, particularly in the APEC region, reflecting a strengthened market presence and improved product competitiveness. Expanding our international operations with diversified products worldwide remains a key priority for us. As travel demand arises... We also recognize the increasing importance of enhancing our service. Through exceptional customer service, AI technology, and reliable content, we continue to invest in improving the user experience.
Rob: Ann.
Rob: Hi.
Speaker Change: I'll start using the existing quota.
Speaker Change: Additionally, the board has approved a 2020 for capital return.
Speaker Change: Great.
All quarter.
Speaker Change: $581 million.
Speaker Change: This demonstrates our strong confidence in the long term value and potential of the company.
Speaker Change: The China market has been growing significantly.
Speaker Change: Non travel playing an increasingly large urology.
Speaker Change: Yes.
Speaker Change: Julian assumption of international flights.
Speaker Change: Okay.
Awesome.
Speaker Change: Particularly in APAC, where Jeremy.
Speaker Change: Our strengthened.
Speaker Change: And then clearly the product competitiveness.
Speaker Change: Expanding our international operations with diversified products worldwide.
Speaker Change: As a key priority for us.
Speaker Change: As travel demand rises.
Speaker Change: We also recognize the increasing importance.
On the service.
Speaker Change: So and exceptional customer service.
Speaker Change: Apologies and reliable content.
Speaker Change: Anything that thing improving user experience.
James Jianzhang Liang: Our commitment to globalization and great quality, collectively known as our G2 strategy, drives us to continuously innovate and improve. The year 2023 marks China's reopening to the world, and 2024 will be a year of consolidating and expanding global tourism. I'm holding our G2 strategy.
Speaker Change: Amendment to global.
Speaker Change: And great quality.
Speaker Change: Tito strategy.
Speaker Change: Continuously H and then koos.
Speaker Change: Yes.
Speaker Change: China is reopening to the world in 2024 will be consolidated.
Speaker Change: Banking global tourism.
Speaker Change: I'm holding our tico strategy, we aim to become a leading player in the Asia market.
James Jianzhang Liang: We aim to become a leading player in the Asian market and the global market in three to five years. With that, I will turn the call over to Jane for operational highlights. Thank you, James. Good morning, everyone.
Speaker Change: Global markets and three to five years.
Speaker Change: I will turn the call over to Jim.
Speaker Change: The operational highlights.
Jim: Thank you James good morning, everyone.
Jane Jie Sun: As a quick overview, our net revenue in Q4 grew by 104% year over year and increased by 24% compared to 2019. During this period, the travel industry witnessed strong momentum, as rising travel sentiment drove growth, and supply side constraints continued to ease. Our hotel and air reservations grew by approximately 130% year over year.
Jim: So quick overview, our net revenue in Q4 grew by one 4% year over year and increased by 24% compared to 2019.
Jim: During this period the couple industry witnessed a strong momentum a thriving travel sentiment drove growth.
Jim: Supply side constraints continue to treat them.
Jim: Both.
Jim: Our hotel and air reservations grew by approximately 130% year over year.
Jane Jie Sun: For the full year of 2023, our total net revenue achieved year-over-year growth of 122% and 25%, compared to 2019. This outstanding result was due to the robust growth of travel demand and the exceptional performance across all of our business segments. Additionally, our adjusted EBITDA margin in 2023 significantly improved to 31%, reflecting the successful optimization of our cost structure and overall productivity enhancement. Now, let me walk you through different market performance, search. China, the mask.
Jim: For the full year of 2023, our total net revenue achieved year over year growth of why the 22% and 25%.
Jim: Compared to 2019.
Jim: This outstanding result was due to the robust relief of travel demand and the exceptional performance.
Jim: All of our business segments.
Jim: <unk>.
Jim: Adjusted EBITDA margin in 2023 significantly improved to 31%, reflecting the successful optimization of our cost structure and overall productivity enhancement.
Jim: Now, let me walk you through different market performance.
Jim: First China domestic.
Jane Jie Sun: In Q4, the Chinese domestic market continued to exhibit robust growth. Our domestic hotel bookings witnessed a year-over-year growth of over 130% or more than 60% compared to 2019. Demand for travel showed no signs of slowing down during the winter season.
Jim: In Q4, the China domestic market continued to exhibit robust growth, our domestic hotel bookings witnessed a year over year growth of over 130% or more of that.
Jim: Great.
Jim: <unk> 2019.
Jim: Demand for travel showed no signs of slowing down during the winter season pop.
Jane Jie Sun: Popular destinations such as Harbin in the northern part of the country experienced a surge in visitors. Additionally, individuals have been prioritizing travel expenditures over other daily expenses, indicating a shift towards experiential spending. This change in consumer behavior has significantly favored the travel industry, as more people allocate their resources towards exploring new places and creating memorable experiences. We have continued to expand our user base among the elderly demographics through the deep integration of product integration, content generation, and marketing efforts. In Q4, the number of users over 50 years old increased by more than 90% compared to 2019. And this is just a beginning to capitalize on the market opportunity for the retired community, which has spending power and ample time. Second, the Alba Market.
Jim: Popular destinations such as heartbeat.
Jim: Northern parts of the country experienced a surge in visitors.
Jim: Notable eight individuals have been prioritizing travel expenditures.
Jim: I bet, they lay expenses, indicating a shift towards experiential spending.
Jim: This change in consumer behavior has significantly favorite travel industry.
Jim: As more people allocate their resources towards exploring new places and create memorable experiences.
Jim: We have continued to expand our user base among the elderly demographics through the deep integration of product integration content generation and marketing efforts.
Jim: In Q4, the number of the users over 50 years old.
Jim: Creased by more than 90% compare to 2019.
Jim: This is just a beginning to capitalize on the market opportunity for retired community, which has spending power and ample time.
Jim: Second all bond market.
Jane Jie Sun: Despite the winter seasonality in Q4, album travel from China maintained the same level of recovery as the peak season in Q3. The gradual easing of supply-side constraints, such as increased international flight capacity and certain clearance of the visa block, played a significant role in facilitating this positive trend. Chinese travelers continue to exhibit high demand for travel to overseas destinations. Moreover, many countries have implemented visa-free policies specifically targeting Chinese travelers, further enhancing the appeal of these destinations and fueling their popularity.
Jim: Despite the winter seasonality in Q4.
Jim: Travel from China maintained the same level of the recovery as the peak season in Q3.
Jim: The gradual easing of supply side constraints, such as increased international flight capacity.
Jim: Certain clearance of the visa block played a significant role in facilitating this positive trend.
Jim: <unk> continued to exhibit high demand for travel to overseas destination.
Jim: Moreover, many country implemented visa fleet policies.
Jim: Typically targeting at Chinese travelers.
Jim: Enhancing the appeal of these destination and theory their popularity.
Jane Jie Sun: In Q4, Trip.com Group's outbound air ticket and hotel bookings recovered to more than 80% of pre-pandemic levels, surpassing the market overall recovery rate of 60%. Thailand, Singapore, Japan, Korea, and Malaysia remain as the top outbound travel destinations on our platform. Third, global markets. On the international front, we actively enhance our global market presence. Through the strong synergy of improved products, enhanced services, and targeted marketing efforts, we have witnessed steady growth in the APAC region. In Q4, total GMV of our overseas OTA brand grew by more than 70% year over year and increased by more than 100% compared to 2019. Now, let me walk you through a few strategic highlights.
Jim: In Q4 chip they'll call groups outbound air ticket and hotel bookings recovered to more than 80% of pre pandemic level.
Jim: So passing the market overall recovery rate of 60%.
Jim: Thailand, Singapore, Japan, Korea, Malaysia remain as the top outbound travel destination on our platform.
Jim: Third global markets.
Jim: On the international front, we activity, we actively enhance our global market Christian.
Jim: Through the strong synergy of improved products enhance the services and targeted marketing efforts, we have witnessed a steady growth in APAC region.
Jim: In Q4 total G M D.
Jim: Our overseas OTT brand grew by more than 70% year over year and increased by more than 100% compared to 2019.
Speaker Change: Now let me walk you through a few strategic highlights first.
Jane Jie Sun: First, globalization. If 2023 was about a return to travel, then 2024 will be the year when people go further than ever before. Travelers have become more comfortable and confident venturing around the world. They are taking to the skies, rails, roads, and the seas to experience unforgettable adventure. From music festivals to exotic adventures, travelers are increasingly seeking more than just a typical gateway. They are craving immersive cultural experiences, thrilling adventures, and music euphoria.
Speaker Change: First globalization.
Speaker Change: N T F 'twenty to 'twenty three was about a return to travel than 'twenty 'twenty four will be the year when people go farther than ever before.
Speaker Change: The travelers become more comfortable in the confidence than truly around the world. They are taking to the skies rails roads and the C to experience unforgettable adventurous.
Speaker Change: Our music festivals to exotic adventurous travelers are increasingly seeking more than just a typical gateway.
Speaker Change: They are craving for immersive cultural experiences through thrilling adventure and the music euphoria.
Jane Jie Sun: In light of this evolving travel preference, Trip.com Group is providing comprehensive travel information and insights, as well as expanding our global offering of products and services. Recognizing that the total addressable market in the major Asian regions is larger than that of China, our goal is to further expand our business scale by establishing ourselves as the leading player in the Asian market and the global market in the next three to five years. Our global OTA platform currently operates in 39 countries and regions across Asia, Europe, and the rest of the world. We offer users a wide range of travel options through our one-stop model, with our exceptional 24 times 7 multilingual in-house customer service and global SOS support. Our global users can receive immediate assistance through our AI chatbot or connect with live representatives within an average time of only 30 seconds.
Speaker Change: Valerie meaningful connections and quality time with their family and friends.
Speaker Change: In light of this evolving cabos preference chipped I'll call group is providing comprehensive travel information and insights as well as expanding our global offering in products and services.
Speaker Change: Recognizing that the total addressable market in a major Asia regions is larger than that of China.
Speaker Change: Our goal is to further expand our business scale by establishing ourselves as the leading player player in Asia market and the global market with the next three to five years.
Speaker Change: Our global Otas platform currently operates in 39 countries and regions across Asia, Europe, and the rest of the world.
Speaker Change: We offer users a wide range of travel options through our one stop model.
Speaker Change: With our exceptional 2004 time seven multilingual in house customer service and global Sos support our global users can receive immediate assistance through our AI chatbot or connect with life Representatives with Inc.
Speaker Change: Our average time of 30 seconds on me.
Jane Jie Sun: Over 60% of our global bookings are made directly through Trip.com. We have been successfully gaining mindshare and market share in the key Asian regions, including Hong Kong, Singapore, Korea, Japan, Thailand, and Malaysia. Second, the Unbound Market.
Speaker Change: Over 60% of our global bookings.
Speaker Change: <unk> directly through <unk> Dot com.
Speaker Change: We have been successfully gaining mindshare and market share in our key Asia regions, including Hong Kong, Singapore, Korea, Japan, Thailand, and Malaysia.
Speaker Change: Second inbound market.
Jane Jie Sun: China inbound travel is an untapped opportunity. Inbound tourism plays a vital role in a country's economy. For Tourism Dependent Countries, such as Thailand, inbound travel can contribute to more than 10% of its GDP. For developed nations, ginkgo nut treble can contribute to around 1 to 3% of its GDP. China's current level is less than 0.5%.
Speaker Change: Trying to inbound travel.
Speaker Change: Untapped opportunity.
Speaker Change: Inbound tourism plays a vital role in countries economy.
Speaker Change: Tourism dependent countries such as Thailand.
Speaker Change: Bound travel can contribute to more than 10% of GDP.
Speaker Change: <unk> developed a nation inbound trouble can contribute to around 123% of GDP.
Speaker Change: China's current level is less than 5%.
Jane Jie Sun: If China can reach a global average between 1 to 2%, it would unlock great market potential of another 1.5 to 2 trillion RMB. Recognizing the importance of inbound travel, China has included it as an integral part of its 14th five-year plan. The government has taken steps to facilitate inbound tourism by granting visa-free access to citizens of 10 countries so far, including France, Germany, Italy, the Netherlands, Spain, Ireland, Switzerland, Singapore, Malaysia, and Thailand.
Speaker Change: If China can reach a global average between 1% to 2% it would unlock a great market potential off another 1522 trillion RMB market.
Speaker Change: Recognizing the importance of inbound travel China has included it's integral part of its 14th five year plan.
Speaker Change: <unk> has taken steps to facilitate inbound tourism by granting visa free access, making trouble more convenient for international visitors.
Speaker Change: China has extended its visa free policies to citizens from 10 countries. So far.
Speaker Change: Including France, Germany, Italy, the Netherlands, Spain, Ireland, Switzerland, Singapore, and Malaysia, and Thailand.
Jane Jie Sun: Since the implementation of this visa-free policy, there has been a remarkable increase in inbound travel to China from these countries, with a rise of nearly 30% in December when compared to November, as reported by the Chinese National Immigration Administration. In 2023, Trip.com has already observed a significant surge in visitor numbers, with a four-digit increase compared to 2022. Moreover, the government is making progress in many areas, such as simplifying the visa application process, facilitating foreign credit card payments, and enabling online travel reservation with foreign passports. We anticipate that the forthcoming Inbound Tourism Policy will bring about favorable changes, creating new opportunities for the industry. With Trip.com Group's extensive customer reach and a robust supply chain, we are well prepared to capitalize on the future growth of inbound travel. Third, AI
Speaker Change: The implementation of this visa free policy they have been a remarkable increase in inbound travel to China from these countries with a rising nearly 30%.
Speaker Change: In December when compared to November.
Speaker Change: As reported by Chinese National Immigration administration.
In 2023 chip Dotcom has already observed a significant surge in visitor numbers with a four digit increase compared to 2022 more.
Speaker Change: Moreover, government is making progress in many areas such as simplifying visa application process facilitating borrowing credit card payments.
Speaker Change: And enabling online travel reservation with foreign passports.
Speaker Change: We anticipate that's the forthcoming inbound tourism policy will bring about favorable changes, creating new opportunities for the industry.
Speaker Change: With trip Com group.
Speaker Change: Sensitive customer reach and our robust to supply chain, we are well prepared and preparing to capitalize on the future growth of inbound travel.
Speaker Change: Third AI the integration of artificial intelligence has emerged as a transformational force revolutionizing the way, we experience and navigate the world.
Jane Jie Sun: The integration of artificial intelligence has emerged as a transformational force, revolutionizing the way we experience and navigate the world. Since the emergence of large language models in early 2023, we have been actively exploring the potential of these new technologies to make travel more convenient, personalized, and memorable for everyone. For example, our ERA assistant.
Speaker Change: Since the emergence of the large language models in early 'twenty two 'twenty three we have been actively exploring the potential of these new technologies to make travel more convenient personalized and memory for everyone.
Speaker Change: Our AI assistant.
Jane Jie Sun: TripGenie is revolutionizing trip planning with personalized itineraries, instant bookings, and a rapid response to couriers. Utilizing natural language processing on our extensive travel data, we aim to simplify the travel planning and reservation process. Our focus is on the constant enhancement of our model to align with users' behavior and data, providing a seamless and hassle-free travel experience. Additionally, Trip.com offers AI-driven travel recommendation lists.
Speaker Change: Chip Genie is resolution IV chip plenty waste personalised itineraries instant bookings and a rapid response to periods.
Speaker Change: Utilizing natural language processing to and our extensive travel data we aim to simplify the travel planning any reservation process.
Speaker Change: Our focus is on debt.
Speaker Change: Constant enhancement of our model to align with user behavior and data, providing seamless and hassle free travel experience.
Speaker Change: Additionally trip they'll call office, AI driven travel recommendations.
Jane Jie Sun: To improve booking experiences, these dynamic lists aim to meet diverse needs of users, utilizing the latest travel trends, real-time pricing information, and top-rated options. This does not only enable our partners to showcase their offering, but also provides users with reliable insight for informed decision making. We remain dedicated to enhancing our capability alongside the advancements in AI technology, as we firmly believe in its potential to drive exponential growth. Fourth, corporate responsibility.
Speaker Change: To improve booking experiences these dynamics.
Speaker Change: Aim to meet diverse needs of users utilizing the latest trouble twins.
Speaker Change: Real time pricing information and top rated options.
Speaker Change: This not only enable our partners to showcase their offering but also provide the user with reliable insights for informed decision making.
Speaker Change: We remain dedicated to enhancing our capability alongside the advancements in the AI technology.
Speaker Change: We firmly believe in its potential to drive exponential growth.
Speaker Change: Fourth corporate responsibility our travel industry has shown remarkable resilience in the face of <unk>.
Jane Jie Sun: Our travel industry has shown remarkable resilience in the face of the pandemic. As we navigate this recovery, our commitment to delivering high-end, high-quality customer experiences remains crucial. Equally important is our dedication to contributing to the growth of our partners in the industry as a whole. We recognize the significance of our role in not only providing exceptional services but also in fostering economic growth and achieving common prosperity by creating more job opportunities and actively contributing to economic development. We strive to make a positive impact in the communities we serve.
Speaker Change: Pandemic.
Speaker Change: We navigate this recovery our commitment to delivering high end high quality customer experiences remain crucial equally important is our dedication to contributing to the growth of our partners in the industry as a whole we recognize the cigna.
Speaker Change: Because of our role in not only providing it.
Sectional services, but also in fostering economic growth and achieving common prosperity.
By creating more job opportunities and actively contributing to economic development, we strive to make a positive impact.
Speaker Change: The communities we serve therefore.
Jane Jie Sun: Therefore, we are firmly committed to embracing sustainability as a fundamental component of our long-term growth strategy. At Trip.com Group, we have developed a sustainability strategy that prioritizes customer service quality, aiming to promote the sustainable development of our industry through community friendly, environmental friendly, family friendly, and stakeholder friendly guidelines. First, on community-friendly, we firmly recognize that sustainable tourism is a driving force of Economic Growth and Job Creation. According to the World Travel and Tourism Council's forecast, the sector will contribute 15.5 trillion USD to GDP by 2033, representing 11.6% of the global economy. Moreover, it will employ approximately 430 million people around the world, with nearly 12% of the global workforce.
Speaker Change: Therefore, we are firmly committed.
Speaker Change: Embracing sustainability as a fundamental component of our long term growth strategy.
Speaker Change: <unk> Dot Com group, we developed a sustainability strategy that prioritizes customer service quality aiming to promote the sustainable development of our industry through carminative friendly environmentally friendly family friendly as they called the <unk>.
Speaker Change: Italy guidelines.
Speaker Change: First on community friendly we firmly recognize the sustainable tourism is a driving force.
Speaker Change: Of economic growth and job creation.
Speaker Change: According to award travel and Tourism Council forecast the sector will contribute to 15.5 trillion USD two GDP by 2033, representing 11% 11.6% of the global economy more over.
Speaker Change: It will employ approximately 430 million people around the world with nearly 12% of the global workforce.
Jane Jie Sun: Trip.com Group takes a comprehensive approach to foster sustainable development within the travel industry. As part of our commitment to support the driving growth in the local communities, we have made sustainable investment in our Rural Revitalization Strategy. This strategy focuses on bolstering tourism by constructing high-end accommodations and providing training for tourism professionals, thereby stimulating economic growth and development in remote areas. Notably, the number of Trip.com Group country retreats has increased from eight to 27 over the past year. The annual per capita income of the local residents involved in the country retreats has risen by over 40,000 RMB. This economic growth contributes to the achievement of common prosperity, enabling more individuals to start their own business and secure employment opportunities within their community, ultimately contributing to an improved quality of life. Second, it is environmentally friendly.
Speaker Change: Chip they'll call group takes a comprehensive approach to foster.
Speaker Change: Stena bulk development within the travel industry as part of our commitment to support the driving growth in the local communities, we have made sustainable investment.
Speaker Change: In our rural revitalization strategy. This strategy focuses so both to bolstering tourism by constructing high end accommodation and providing training for tourism professionals, thereby stimulating economic growth.
Speaker Change: Element in remote areas.
Speaker Change: Notably the number of trip Com group country retreats has increased from eight to 27 over the past year. The annual per capita income off the local residents involved in the country retreats have risen by over 14.
Speaker Change: South into RMB.
Speaker Change: It's economical growth contributes to achievement of Docomo prosperity enable more individuals to start their own business and securing employment opportunity within their community.
Speaker Change: Italy contributing to an improved quality of life.
Speaker Change: Second environmental friendly to show our commitment to environmental preservation, we have introduced to our carbon hotel standard in 2023. This industry framework collaborate with our hotel partners to enhance accommodation.
Jane Jie Sun: To show our commitment to environmental preservation, we introduced our carbon hotel standard in 2023. This industry framework collaborates with our hotel partners to enhance accommodation sustainability and promote environmental protection. The initiative has yielded promising results, with over 1,500 partners being recognized as low-carbon hotels. Furthermore, we have made significant strides toward providing sustainable travel choices across all of our business lines. In addition to green hotel initiatives, we have also introduced the green flights program, which enabled travelers to qualify and also calculate the carbon footprint of their air travel and provide eco-friendly travel options to help reduce environmental impact. Through the Green Vehicle Initiative, we advocate for the use of electric vehicles or EDs to reduce carbon emissions in ground transportation. We also launched an innovative green corporate travel initiative that includes low carbon labels for flights, cars, trains, and hotels supported by a robust system for In the previous year alone, over 16 million customers of Trip.com Group chose to use green products. Third, family-friendly.
Speaker Change: Sustainability and promote environmental protection.
Speaker Change: The initiative has yield.
Speaker Change: I'm missing results with over 1500 partners being recognized as low carbon hotels.
Speaker Change: Furthermore, we have made significant strides towards providing sustainable travel choices across all of our business lines. In addition to Green Hotel initiatives. We have also introduced green flights program, which enables travelers to come.
Speaker Change: Si and also.
Speaker Change: Carbon footprint of the air travelers and provide equal friendly turbo option to help reduce environment impact.
Speaker Change: Through Green vehicle initiatives, we advocate for the use of electric vehicles or E d's to reduce carbon emission and ground transportation. We also launched an innovative green corporate traveller initiatives, which includes low carbon.
Speaker Change: For flights cars trains and a hotel supported by robust system for precise carbon emission calculation.
Speaker Change: In the previous year alone over 16 million customers of trip Com group chose to use marine products.
Speaker Change: Third family friendly chipped I'll call group place great importance on friendly friendly initiatives to strive to create agenda inclusive and diverse workforce currently female employees makeup more than 50% of our workforce reflect.
Jane Jie Sun: Trip.com Group places great importance on family-friendly initiatives to strive to create a gender-inclusive and diverse workforce. Currently, female employees make up more than 50% of our workforce, reflecting our commitment to fostering a balanced environment. We have implemented policies to support pregnant employees, starting from 2023. Employees who have been with our company for three years plus can receive a child care subsidy of 50,000 RMB for each child. Furthermore, Trip.com Group is proud to be the first company in China to adopt a hybrid work model. We believe this approach enhances employee satisfaction but also promotes productivity and creativity within our organization. Fourth, stakeholder friendly. We strive to put our customers first, providing exceptional services and value, meeting their needs, and ensuring their satisfaction.
Our commitment to fostering a balanced the environment, we have implemented policies to support pregnant employees.
Starting from 2023 employees, who have been with our company for three years, plus Kansas seats or child care subsidy of 50000 to RMB for each child.
Speaker Change: Furthermore, chip Dot Com group is proud to be the first company in China to adopt Highbridge work model.
Speaker Change: We believe this approach not only enhance employee satisfaction, but also promote productivity and creativity within our organization.
Speaker Change: Fourth stakeholder friendly we strive to put our customer first providing exceptional services and the value meeting their needs and ensuring their satisfaction.
Jane Jie Sun: Second, we are committed to delivering great value to our partners, contributing to the growth of our industry and collectively creating more job opportunities for society. And thirdly, we work hard to create value for our employees and shareholders, fostering a positive and rewarding environment that allows them to thrive and benefit from our success. In conclusion, the travel industry has been thriving since the start of 2023, driven by strong demand. We expect the industry to continue flourishing, fostering economic growth and cross-cultural connection. In light of this positive outlook, we are committed to innovating and strengthening our global offering to capitalize on these trends. We are confident in our ability to contribute to the growth and success of the travel industry for many years to come. With that, I will now turn the call over to Cindy.
Speaker Change: Second we're committed to deliver a great value to our partners contributing to the growth of our industry and are collectively creating more job opportunities for the society and thirdly, we work hard to create value for our employees and the shareholders.
Speaker Change: Fostering a positive and a rewarding environment to allowing them to thrive and the benefit from our success.
Speaker Change: In conclusion, the travel industry has been thriving since the start of 2023.
Speaker Change: Driven by strong demands.
Speaker Change: We expect the industry to continue flourishing fostering economic growth and cross cultural connection.
Speaker Change: In light of this positive outlook, we are committed to innovating and strengthening our global offering to capitalize.
Capitalized on these strengths we are confident in our ability to contribute to the growth and the success of the travel industry in many years to come.
Speaker Change: With that I will now turn the call to Cindy.
Cindy Xiaofan Wang: Thanks, Jane. Good morning, everyone. For the fourth quarter of 2023, Trip.com Group reported a net revenue of RMB $10.3 billion, representing a 105% increase year-over-year and a 25% decrease quarter-over-quarter. Despite this sequential decrease, which was mainly due to normal seasonality, the revenue was still 24% higher than the 2019 level. For the full year of 2023, net revenue reached RMB44.5 billion, representing a 122% increase year over year and a 25% increase from 2019. This growth was mainly driven by the strong release of travel demand following China's reopening at the beginning of the year. Accommodation reservation revenue for the fourth quarter reached RMB3.9 billion, representing a 131% increase year-over-year and a 32% growth compared to the 2019 level.
Cindy Xiaofan Wang: Sure. Thanks, James Good morning, everyone for the fourth quarter of 2023 Chip Dot Com group recorded net revenue of RMB 10.3 billion, representing a 105% increase year over year and a 25% decrease.
Cindy Xiaofan Wang: Quarter over quarter.
Cindy Xiaofan Wang: Despite the sequential decrease which was mainly due to normal seasonality. The revenue was still 24% higher than the 2019 level.
Cindy Xiaofan Wang: For the full year of 2023 net revenue reached RMB 44, 5 billion, representing a 122% increase year over year and a 25% increase from 2019.
Cindy Xiaofan Wang: This growth was mainly driven by the strong release of travel demand following China's reopening at the beginning of the year.
Cindy Xiaofan Wang: Accommodation reservation revenue for the fourth quarter reached RMB three 9 billion.
Cindy Xiaofan Wang: Representing a 131% increase year over year, and a 32% growth compared to the 2019 level.
Cindy Xiaofan Wang: China's market continues to demonstrate robust growth. Domestic hotel bookings grew over 60% above the pre-pandemic level, and outbound hotel bookings remained at more than 80% off the pre-pandemic limit. In addition, hotel bookings on overseas platforms continued to show triple-digit growth.
Cindy Xiaofan Wang: In the fourth quarter.
Cindy Xiaofan Wang: China market continue to demonstrate robust growth domestic.
Cindy Xiaofan Wang: Domestic hotel bookings grew over 60% above the pre pandemic level and outbound hotel booking remained at more than.
Cindy Xiaofan Wang: 80% of the pre pandemic level.
Cindy Xiaofan Wang: In addition hotel bookings overseas platform continued to show triple digit growth.
Cindy Xiaofan Wang: For the full year of 2023, accommodation reservation revenue totaled R&B 17.3 billion, a 133% increase from 2022 and a 28% increase from 2019. Transportation ticketing revenue for the fourth quarter was RMB 4.1 billion, representing an 86% increase year over year and an 18% growth compared to 2019. For the full year of 2023, transportation ticketing revenue was RMB18.4 billion, representing a 123% increase from 2022 and a 32% increase from 2019. The growth was mainly due to the strong growth in our domestic and global air ticketing business and robust recovery of outbound air ticketing booking. Package tour revenue for the fourth quarter was RMB704 million, representing a 329% increase year-over-year and recovering to 88% of the 2019 In the fourth quarter, domestic package tour continued to outgrow the 2019 level. On the other hand, the recovery in our bond package tool is still lagging behind, but the gap has been significantly narrowing.
Cindy Xiaofan Wang: For the full year of 2023 accommodation reservation revenue totaled.
Cindy Xiaofan Wang: To RMB 17, one 3 billion.
Cindy Xiaofan Wang: Mark here, 133% increase from 2022.
Cindy Xiaofan Wang: And the 828% increase from 2019.
Cindy Xiaofan Wang: Transportation ticketing revenue for the fourth quarter was RMB, four 1 billion, representing an 86% increase year over year, and then 18% growth compared to 2019.
Cindy Xiaofan Wang: For the full year of 2023 transportation ticketing revenue was RMB 18 4 billion.
Cindy Xiaofan Wang: Representing a 123% increase from 2022, and a 32% increase from 2019.
Cindy Xiaofan Wang: The growth was mainly due to the strong growth in our domestic and global air ticketing business and robust recovery and outbound of outbound air ticketing booking.
Cindy Xiaofan Wang: Packaged tour revenue for the fourth quarter was RMB seven four.
Cindy Xiaofan Wang: 4 million, representing a 329% increase year over year and recovering to 88% after 2019 level.
Cindy Xiaofan Wang: In the fourth quarter domestic package tour continue to outgrow the 2019 level.
Cindy Xiaofan Wang: On the other hand, the recovery in outbound package tour was still lagging behind but the gap has been significantly narrowed.
Cindy Xiaofan Wang: For the full year of 2023, package total revenue was RMB 3.1 billion, representing a 294% increase from 2022 and a recovery to 69% of the 2019 level. Corporate travel revenue for the fourth quarter was RMB634 million, representing a 129% increase year over year, which is 70% higher than the 2019 level. Air ticket bookings increased by double digits compared to the 2019 level, while hotel bookings more than tripled the 2019 level. For the full year of 2023, corporate travel revenue was RMB 2.3 billion, representing a 109% increase from 2022 and an 80% increase from 2019. Excluding share-based compensation charges, our total adjusted operating expenses were 17% lower than the previous quarter and 1.6% higher than the same period in 2019. For the full year of 2023, total adjusted operating expenses will be 8% higher than the 2019 level. Adjusted product development expenses for the fourth quarter decreased by 19% from the previous quarter and increased by 10% compared with the same period in 2019.
Cindy Xiaofan Wang: For the full year of 2023 packaged tour revenue was RMB three 1 billion.
Cindy Xiaofan Wang: Representing <unk>.
Cindy Xiaofan Wang: 294% increase.
Cindy Xiaofan Wang: 2022, and the recovery 269%.
Cindy Xiaofan Wang: Off the 2019 level.
Cindy Xiaofan Wang: Corporate travel revenue for the fourth quarter was RMB 634 million.
Representing a 129% increase year over year, which is 70% higher than the 2019 level.
Cindy Xiaofan Wang: Air ticket booking.
Cindy Xiaofan Wang: <unk> increased by double digits compared to the 2019 level, while hotel bookings have more than triple the 2019 level.
Cindy Xiaofan Wang: For the full year of 2023 corporate travel revenue was RMB, two 3 billion, representing a 109% increase from 'twenty to 'twenty, two and then 80% increase from 2019.
Cindy Xiaofan Wang: Excluding share based compensation charges, our total adjusted operating expenses were 17% lower than the previous quarter and one 6% higher than the same period in 2019.
Cindy Xiaofan Wang: For the full year of 2023 total adjusted operating expenses were 8% higher than the 2019 level.
Cindy Xiaofan Wang: Adjusted product development expenses for the fourth quarter decreased by 19% from the previous quarter and increased by 10% compared with the same period in 2019.
Cindy Xiaofan Wang: Adjusted GMA expenses for the fourth quarter decreased by 16% from the previous quarter and decreased by 1% from the same period in 2019. For the full year of 2023, the combined total of adjusted product development expenses and adjusted G&A expenses was 15% higher than the 2019 level. The total headcount of our product development and G&A team remained significantly lower than during the same period in 2019. Adjusted sales and marketing expenses for the fourth quarter decreased by 15% from the previous quarter and decreased by 6% compared with the same period in 2019. For the full year of 2023, adjusted sales and marketing expenses as a percentage of net revenue were 20%, compared to 26% during the same period in 2019. This was mainly due to improved marketing efficiencies and a strong release of pandemic demand from the beginning of the year. Adjusted EBITDA for the fourth quarter was RMB2.9 billion, representing a growth of 899% year-over-year and 117% compared to 2019. The adjusted EBITDA margin for the fourth quarter was 28%, in comparison to 6% in the same period of 2022 and 16% during the same period of 2019. For the full year of 2023, adjusted EBITDA was RMB14 billion.
Cindy Xiaofan Wang: Adjusted G&A expenses for the fourth quarter decreased by 16% from the previous quarter and decreased by 1% from the same period in 2019.
Cindy Xiaofan Wang: For the full year of 2023.
Cindy Xiaofan Wang: Combined total adjusted product development expenses, and adjusted G&A expenses were 15% higher than the 2019 level.
Cindy Xiaofan Wang: The total head count of our product development and G&A teams remained significantly lower.
Cindy Xiaofan Wang: During the same period in 2019.
Cindy Xiaofan Wang: Adjusted sales and marketing expenses for the fourth quarter decreased by 15% from the previous quarter and decreased by 6% compared with the same period of 2019.
Cindy Xiaofan Wang: For the full year of 2023, adjusted sales and marketing expenses as percentage of net revenue was 20% compared to 26% during the same period in 2019.
Cindy Xiaofan Wang: This was mainly due to improved marketing efficiencies and a strong release of pent up demand out of the gaming from beginning of the year.
Cindy Xiaofan Wang: Adjusted EBITDA for the fourth quarter was RMB, two 9 billion, representing a growth of 899% year over year, and a one country as 17% compared to 2019.
Cindy Xiaofan Wang: Adjusted EBITDA margin for the fourth quarter was 28%.
Cindy Xiaofan Wang: In comparison to 6% in the same period of 2022.
Cindy Xiaofan Wang: And 16% during the same period of 2019.
Cindy Xiaofan Wang: For the full year of 2023.
Cindy Xiaofan Wang: <unk> EBITDA was RMB 14 billion.
Cindy Xiaofan Wang: Representing roles, 550% year over year and an increase of 78% compared to 2019. Adjusted EBITDA margin for the full year over 2023 was 31% compared to 11% in 2022 and 22% in 2019. Diluted earnings per ordinary share and per ADS were RMB 1.94, or US dollar 27 cents, for the fourth quarter of 2023, excluding share-based compensation charges and fair value changes of equity security investments and exchangeable CDN notes. Non-Gap Diluted Earnings per Ordinary Share and per ADS were RMB4 or US$0.56 for the first quarter.
Cindy Xiaofan Wang: Presenting a growth.
Cindy Xiaofan Wang: Of 550% year over year, and an increase of 17, 8% compared to 2019.
Cindy Xiaofan Wang: Adjusted EBITDA margin for the full year over 2023 was 31% compared to 11% in 'twenty to 'twenty two and.
22% in 2019.
Cindy Xiaofan Wang: Diluted earnings per ordinary share and her ADR.
Cindy Xiaofan Wang: Well I'll be one nine for our U S dollar 27 states.
Cindy Xiaofan Wang: For the fourth quarter of 2023.
Excluding share based compensation charges and fair value changes of equity security investments in exchangeable senior notes.
Cindy Xiaofan Wang: GAAP diluted earnings per ordinary share and per avs.
Cindy Xiaofan Wang: Our RMB for our U S dollar 56 for the fourth quarter.
Cindy Xiaofan Wang: For the full year of 2023, diluted earnings per ordinary share and per ADS were RMB14.78 in US dollars, 2.08, excluding share-based compensation charges and Fair Value Changes of Equity, Security, Investment, and Exchangeable Senior Nodes. Non-Gap Diluted Earnings per Ordinary Share and per ADS, where I am the 19.48 on U.S. dollar 2.74 as of December 31st, 2023. The Balance of Cash and Cash Equivalents, Restricted cash, and shortened investment How to maturity Time Deposit and Financial Products, with RMB 77 billion or U.S. dollar 10.9 billion.
Cindy Xiaofan Wang: For the full year of 2023 diluted earnings per ordinary share and per ads were RMB 14.78.
Cindy Xiaofan Wang: The us dollar.
Cindy Xiaofan Wang: Two zero.
Cindy Xiaofan Wang: Zero eight.
Cindy Xiaofan Wang: Excluding share based compensation charges.
Cindy Xiaofan Wang: And fair value changes of equity security investments exchangeable senior notes.
Cindy Xiaofan Wang: No GAAP diluted earnings per ordinary share and per ads.
Cindy Xiaofan Wang: Were RMB 19.48, or U S dollar 2.74.
Cindy Xiaofan Wang: As of December 31st 2023.
Cindy Xiaofan Wang: The balance of cash and cash equivalents.
Cindy Xiaofan Wang: Restricted cash.
Turning last month.
Cindy Xiaofan Wang: How to maturity time deposit and financial products was RMB 77 billion or U S. Dollar 10 9 billion.
Cindy Xiaofan Wang: Given that the rapid business growth this year has significantly strengthened the group's cash flow, and we strongly believe that the company share price is undervalued. As of February 22, 2024, we repurchased US$224 million of our shares and reduced our share count by approximately 1% versus 2022, according to the regular capital return policy. The Board of Directors has recently granted authorization for the company to implement strategic capital return initiatives. These initiatives may encompass discretionary annual share repurchase, discretionary Annual Cash Dividend, or a combination of both.
Cindy Xiaofan Wang: Given that the rapid business rose this year has significantly strengthened the group's cash flow.
Cindy Xiaofan Wang: And we strongly believe that the a.
Cindy Xiaofan Wang: Our company our share price is undervalued as of February 22nd 2024.
Cindy Xiaofan Wang: <unk> repurchased U S dollar $224 million of our shares and reduced our share count by approximately 1% versus 2022.
Cindy Xiaofan Wang: According to the regular capital return policy.
Cindy Xiaofan Wang: Board of Directors has recently granted authorization for the company to implement strategic capital return initiatives.
Cindy Xiaofan Wang: These initiatives may income compared discretional annual share repurchase.
Cindy Xiaofan Wang: Discretional annual cash dividend.
Cindy Xiaofan Wang: Or a combination of both.
Cindy Xiaofan Wang: This reflects our dedication to our shareholders' investment and our belief in the strong long-term prospects of our business and the travel industry. To conclude, we are delighted that the travel market has been recovering significantly. Our performance has effectively reflected the rising consumer confidence and demand for travel. We are committed to driving strong growth in 2024, along with the continued upward trajectory in the travel market, and most importantly, to create value for our long-term shareholders. With that operator, please open the line for questions. Thank you. And as a reminder, to ask a question, you will need to press star 11 on your telephone and wait for a name to be announced. To withdraw your question, please press star 11 again.
Cindy Xiaofan Wang: This reflects our dedication to all shareholders investment and our belief in the strong long term prospect of our business and the travel industry.
So come true.
Cindy Xiaofan Wang: We are delighted that the travel market has been recovery significantly.
Cindy Xiaofan Wang: Our performance has effectively effectively reflect the rising consumer confidence and demand for travel.
Cindy Xiaofan Wang: We are committed to drive strong growth in 2024, along with the continued upward trajectory in the travel market.
Cindy Xiaofan Wang: And most importantly to create value for our long term shareholders.
Cindy Xiaofan Wang: With that operator, please open the line for questions.
Speaker Change: Thank you and as a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to a draw. Your question. Please press star one again, please standby will be compile the Q&A roster.
Operator: Please stand by while we compile the Q&A roster. One moment for our first question. Our first question will come from Joyce Ju from Bank of America. Your line is open.
Speaker Change: For first question.
Speaker Change: Our first question will come from the line of Joyce Ju from Bank of America. Your line is open.
Joyce Ju: Good morning, James, Jane, Cindy, congratulations on the strong results and thanks for taking my question. This quarter, the company's international platform Trip.com actually saw another robust quarter, and the management also mentioned a lot in your opening remark that globalization is actually our importance as a long-term goal. Could you kindly elaborate a little bit more on this front? What's Trip.com's current achievement, more details, any color will be fine, and the near-term, mid-term, and even longer-term goals and also the consequent, you know, strategies to achieve that? How would your G2 strategy help to reach this goal?
Joyce Ju: Good morning, James Jane Cindy Congrats on the strong results and thanks for taking my question this quarter in the company's internal hemo platform Triple Com actually saw another robust quarter and management also mentioned a lot in your opening remark that the globalization actually.
Joyce Ju: Our important likely in a long time ago could you kindly elaborate a little bit more on this front, what's the triple comps cognizant achieved mines more details on the call is working fine and the near to midterm is a longer term goals and although there are consequences like you know strategies to execute that Uh huh.
Joyce Ju: How would your June two strategy helped to reach the scope. Thanks a lot.
James Jianzhang Liang: Thanks a lot. Thank you very much for the question. Our G2 strategy focuses on globalization and great quality. We believe our long-term growth depends on the progression of our globalization strategy, which aims to build global products, supply chains, services, and technology for worldwide users. Asia is a top travel destination for travelers from China and other parts of the region.
Joyce Ju: Okay.
Speaker Change: Thank you very much for the question.
Speaker Change: So strategy is focus.
Speaker Change: And a great quantity.
Speaker Change: All of our long term growth reliance on the progression.
Speaker Change: <unk> strategy.
Speaker Change: Shames to build <unk>.
Speaker Change: Supply chain services and technology.
Speaker Change: Hey, Jay at the top.
Jay: Thanks, Shannon for travelers from China, and other parts of the region.
James Jianzhang Liang: By leveraging our strong supply chain, diverse product offering, and industry-leading service and technology, we strive to provide exceptional service for users in Asia and, subsequently, around the world. With respect to great quality, our mission is to provide the best travel experience with the best technology.
Jay: Leveraging our strong supply chain.
Speaker Change: Offering an industry, leading service and technology, we strive to provide exceptional service for you guys.
Speaker Change: Asia and subsequently around the world.
Speaker Change: With respect to <unk> mission is to provide the best travel experience.
Speaker Change: Technology.
James Jianzhang Liang: We have introduced TripGenie, an AI-based travel assistant, to enhance the travel planning experience. We're also using AI to improve the efficiency of our customer service, content generation, and IT operations. Thank you. Thank you. Thank you. Please take a moment for our next question. And our next question will come from the line of Alex Poon from Morgan Stanley. Your line is open.
Speaker Change: For example.
Speaker Change: We introduced.
Speaker Change: Amy and AI based travel assistant.
Speaker Change: Travel planning experience.
Speaker Change: So using AI to improve the efficiency of our customer service content generation and 19 operations.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: Thanks.
Speaker Change: Thank you one moment for our next question.
Okay.
Speaker Change: And our next question comes from the line of Alex Poon from Morgan Stanley. Your line is open.
Alex Poon: Hi, good morning. Congratulations, management, on a very strong quarter. My question is regarding our recent business performance, particularly around Chinese New Year and after for different segments, including domestic, outbound, and Trip.com. And how should we elaborate or extrapolate from this strong CNY performance into Q1 and the rest of the year? Thank you so much.
Alex Poon: Hi, Good morning, Congratulation management for very strong quarter.
Alex Poon: My question is regarding our recent business performance, particularly around Chinese new year.
Alex Poon: After for different segments, including domestic outbound trip dot com and how should we elaborate or extrapolate from the strong C&I performance into Q1 and the rest of the year. Thank you so much.
Jane Jie Sun: Thank you, Alex. As of 2023, our business has fully rebounded to pre-COVID levels. From this year forward, we will stop using 2019 as a benchmark for comparisons, except for our outbound travel sector. With regard to recent performance, let me start with market performance. The Chinese travel market has shown strong momentum quarter to date, especially during the Chinese New Year. The number of domestic tourists grew by 34% year-over-year, or 19% above the 2019 level, and outbound travel continues to recover with slight capacity during the Chinese New Year holiday, reaching around 70% of the 2019 level. And we are very happy to see that several countries have now offered visa-free entry for Chinese travelers.
Alex Poon: Yeah.
Speaker Change: Thank you Alex.
Speaker Change: F 2023 our business has fully rebounded to pre COVID-19 levels from.
Speaker Change: From this year forward.
Speaker Change: We will stop using <unk> as a benchmark.
Speaker Change: That is set for outbound travel segment.
Speaker Change: With regard to the recent past.
Speaker Change: Let me starting with the market performance.
Speaker Change: The China travel market has shown strong momentum quarter to date, especially during the Chinese new year.
Speaker Change: Number of domestic tourists grow by 34% year over year or 19% above the 2019 level and all of our travel continues to recover with flight capacity during the Chinese new year holiday reached around 70% of the 2019.
Speaker Change: <unk>.
Speaker Change: And we are very happy to see that the several see that several countries have now offering visa free entry for Chinese travelers.
Jane Jie Sun: With regard to our own performance, our company continues to outpace market growth, solidifying our positions, and gaining a significant market share. During the recent Chinese New Year holiday, our domestic hotel and air reservations increased by more than 60% and 50% year over year, respectively, and our all-bound hotel and air reservations have both surpassed the 2019 level. The January of 2023, including the Chinese New Year holiday, was a low base for travel activities, and the travel momentum only started to pick up after the Chinese New Year holiday.
Speaker Change: With regard to our own performance our company continues to outpace the market growth solidify our position and gaining significant market share.
Speaker Change: During the recent Chinese new year holiday, all domestic hotel and air reservations has increased by more than 60% and 50% year over year, respectively.
Speaker Change: Now I'll bump hotel and air reservation have both surpassed the 2019 level.
Speaker Change: At January.
Speaker Change: The general off 223, including the Chinese new year holiday with a low base for travel activity and the travel momentum only started to pick up after the Chinese new year, Therefore Ah Ah.
Jane Jie Sun: Therefore, we anticipate stronger year-over-year growth in the first half of Q1 this year and followed by a comparatively softer second half just because of the high base. And with regard to the international market, our Trip.com business has maintained a mid to high double-digit year-over-year growth. Therefore, we continuously see very strong growth in the travel market. Thank you. Thank you. Please take a moment for our next question. And our next question will come from Alex Yao from J.P. Morgan. Your line is open. Thank you, management, for taking my question. So the Civil Aviation Administration of China, i.e.
Speaker Change: We anticipate a stronger year over year growth in the first half of the Q1. This year followed by a comparatively softer.
Speaker Change: Second half just because of the high base.
Speaker Change: And with regard to the international markets, our Dot Com business has maintained a mid to high double digit year over year growth.
Speaker Change: Therefore, we are continuously to see a very strong a growth in the travel market.
Speaker Change: Thank you.
Speaker Change: Thank you one moment our next question.
Speaker Change: And our next question will come from the line of Alex Yao from Jpmorgan. Your line is open.
Alex Yao: Thank you imagine them for taking my question.
Alex Yao: So the civil Aviation administration of China.
Alex Yao: CAAC has projected that outbound flight capacity will reach 80% of pre-COVID levels by the end of 2024. This seems relatively slow considering that the capacity had already reached 70% during the Chinese New Year holiday. From your perspective, what factors might contribute to this slow recovery?
Alex Yao: She has project.
Alex Yao: The all bank, Florida capacity will reach 80% of pre COVID-19 levels in both 2024.
This seems relatively slow considering that the capacity already reached 70% during the Chinese new year holiday from your perspective, what factors might contribute to pause or slow recovery when does management anticipate full recovery.
Jane Jie Sun: When does management anticipate a full recovery in the outbound travel sector? Thank you.
Speaker Change: Oh bound travel sector. Thank you.
Speaker Change: Hmm.
Jane Jie Sun: Thank you, Alex. We hold very strong confidence in the full recovery of outbound travel. Firstly, our platform has observed a significant surge in interest in outbound travel, which indicates a robust demand from our users. Furthermore, China is becoming increasingly open to attract inbound tourism, which forms a part of the demand for China-related international travel. Secondly, the market supplier situation is improving. We have noticed a steady recovery in the number of inbound and outbound flights. Additionally, visa policy has become increasingly favorable.
Speaker Change: Thank you Alex.
Speaker Change: We hold a very strong confidence in the full recovery of outbound travel firstly, our platform has observed a significant search interest.
Speaker Change: And the outbound travel, which indicate a robust demand from our users.
Speaker Change: Furthermore, China, it's becoming increasingly open to attract inbound tourism, which forms a part of the demand for travel for China related international travel.
Speaker Change: Secondly, the market supplier situation is improving we have noticed a steady recovery in the number of inbound and outbound flights. Additionally, visa policy has become an increasingly favorable.
Jane Jie Sun: For instance, we observed that the market offering visa-free policies to Chinese travelers showed much better recovery during the Chinese New Year period compared to other destinations. And lastly, it's important to know that most markets outside of China will require two to three years to fully recover their international travel. Even a 70% to 80% recovery of outbound passenger volume in 2024 will indicate a year-over-year growth of approximately 65% to 90%. This clearly illustrates the potential for strong growth in outbound travel in the coming year. And with our own data, during the recent Chinese New Year holiday, our group already saw our air and hotel reservations fully bounce back and beyond the 2019 level. Thank you. Thank you. Please take a moment for our next question. And our next question comes from Jiong Shao from Barclays. Your line is open.
Speaker Change: For instance, we observed that the market offer offering visa free policies to Chinese travelers showed much better recovery during the Chinese new year period compared to other destinations.
Speaker Change: And lastly, it's important to know that the most markets outside of China. Our project to require two to three years to fully recover their international travel.
Speaker Change: Even the 70% to 80% recovery of outbound passenger volume in 'twenty 'twenty four will indicate a year over year growth of approximately 60 to 65% to 90%. This clearly illustrates the potential for the strong growth in outbound travel in the coming year.
Speaker Change: <unk>.
Speaker Change: And with our own data.
Speaker Change: During the recent Chinese new year holiday outlook.
Speaker Change: Outlook already saw all about air and hotel reservations fully balls back and beyond the 2019 level. Thank you.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Our next question.
Speaker Change: Okay.
Speaker Change: And our next question comes from the line of Joan Chow from Barclays. Your line is open.
Jiong Shao: Thank you very much for taking my question, and firstly, Happy New Year to you all. Thank you. Yeah. So there are a lot of cross-currents in the Chinese economy today, as you know. I mean, the property market, the stock market are doing terribly, people's confidence is very low, and the economy is kind of soft.
Joan Chow: Thank you very much for taking my question and for Steve Happy.
Joan Chow: Happy new year to you all.
Thank you.
Joan Chow: Yeah. So.
Joan Chow: So there are a lot of cross currents in the Chinese economy today as you know.
Joan Chow: The property market the stock market are doing terribly people's confidence is very low.
Joan Chow: Economies kind of solved you have put up very very strong results.
Jiong Shao: You have put up very, very strong results, and congratulations on that. I was just wondering, in Q4 and so far in Q1, what have you seen in terms of your travelers' spending behavior, leisure travel or business travel? Are they spending less, spending the same, or in terms of changes in destination? Anything you can share would be great. Thank you for your question. China is a very big country.
Joan Chow: Congrats on that I was just wondering in Q4 and still find Q1, what have you seen in terms your travelers spending behavior leisure travel all business travel or they're spending less spending the same or in terms of changes in destination anything you can.
Joan Chow: Sure.
Right.
Joan Chow: Hum.
Speaker Change: For your question, China is a very big country. There are a lot of different segments, we have seen that certain segments such as entertainment.
Jane Jie Sun: There are a lot of different segments. We have seen that certain segments, such as entertainment, music festivals, wellness, and travel, are doing very well. We have seen customers increase their travel demand based on the search volume on our platform. Many customers are going to different places, both domestically and to the rest of the world. The interest of our customers to explore different regions in the world has been enhanced compared to the pre-COVID level.
Speaker Change: Our music festivals wellness and travel these segments are doing very well we have seen customers have increased their travel demand based on our search volume on our platform many customer medicine. According to different places both domestically.
Speaker Change: And to the rest of the world are the interest for our customers to explore different to regions in the world has been enhanced compared to pre COVID-19 levels.
Jane Jie Sun: With the ease of travel restrictions and also gradual recovery for visa applications and flight capacity, we are hoping 2024 will be the year that we can take more customers to travel within China and to the rest of the world. So the travel demand is very strong, and we are very committed to providing the best service and products to our customers. Thank you. Thank you. One moment for our next question, and our next question comes from Simon Chung from Goldman Sachs. Your line is open.
Speaker Change: With the evenness of.
Speaker Change: Travel restrictions and also gradual recovery for the visa applications and flight capacity, we're hoping 'twenty 'twenty four will be the year that we can take more customers to travel within China and to the rest of the world. So the travel demand is there.
Speaker Change: Is strong and we are very committed to provide the best service and products to our customers. Thank you.
Thank you for a moment for our next question.
Yeah.
Speaker Change: Yes.
Speaker Change: And our next question comes from the line of Simon Cheung from Goldman Sachs. Your line is open.
Simon Chung: Hi, happy new year, everyone. Thanks for taking my questions. I just have one quick question in relation to the margins.
Simon Cheung: Hi, happy new year, everyone. Thanks for taking my questions.
Simon Cheung: Just have one quick question.
Cindy Xiaofan Wang: I think if you look in the prior several years, on a sequential basis, obviously, fourth quarter seasonally weaker, we should see some sort of a margin contraction. And we have seen that as well in your fourth quarter result. However, I think the magnitude of the correction, like, when I look at quarter on quarter, the EBIT margins have fallen by roughly about 6-7% compared to historically, maybe almost like mid-teens. It's seemingly tracking a bit better than anticipated. So I guess the question I have is, we have seen quite a few quarters of sales and marketing expenses tracking well below the 2019 level. And I just wanted to question how you're thinking about, you know, the trend, especially given, you know, incrementally, spending to be incurred, maybe in the OPC market, now that you have a more aggressive globalization strategy. Thank you. Thank you, Simon. With regard to sales marketing expenses in the fourth quarter of last year, we have seen a significant improvement in our marketing efficiencies, primarily due to our enhanced conversion, as well as the internal cross-selling initiative.
Simon Cheung: Relation to the margins.
Simon Cheung: I think if you look at it.
Speaker Change: Several years.
Speaker Change: On a sequential basis, obviously fourth quarter seasonally weaker we should see some margin contraction that we have seen that as well.
Speaker Change: Your fourth quarter results, However, I think the magnitude of correction.
Speaker Change: When I look at quarter on quarter, the EBIT margins by roughly about six 7% compared to what you saw quickly maybe almost like Mckinsey.
Speaker Change: We are tracking a bit better than anticipated.
Speaker Change: I guess the question I have is.
Speaker Change: We have seen quite a few quarters of sales and marketing expenses trucking.
Speaker Change: Trucking wont below the 2000 2019 level.
Okay.
Speaker Change: I just wanted to question, how youre thinking about the <unk>.
Speaker Change: Especially given incrementally that might be more spending to be to be incurred maybe in the oversea market now that you have a more aggressive globalization strategy. Thank you.
Speaker Change: Thank you.
Speaker Change: Oh with the regard to the sales and marketing expenses in the fourth quarter.
Speaker Change: Last year, we have seen a significant improvement in our marketing efficiencies.
Speaker Change: Primarily due to our enhanced conversion.
Speaker Change: As well as the internal cross selling initiatives and on top of that we also make a lot of investment.
Cindy Xiaofan Wang: And on top of that, we also make a lot of investment in, for example, content generation, which also significantly helps us to improve marketing efficiency. And our long-term goal is to further enhance marketing efficiency in both China as well as our international markets by focusing on increasing our direct traffic, increasing our direct traffic, as well as improving our cross-selling within our platform. But of course, for the international Trip.com business, we are also looking at the opportunity to further enhance our brand awareness outside of the Chinese market. Thank you. Thank you. Thank you. One moment for our next question, and our next question will come from Brian Gong from Citi. Your line is open.
In for example, the content generation, which also significantly help us to improve the marketing efficiencies and our long term goal is to further enhance the marketing efficiencies in both the China as well as our international markets by focusing our increasing our direct.
Speaker Change: Traffic.
Speaker Change: Increasing our direct traffic as well as to improving our cross selling within our platform, but of course that aimed for the international trip Doghouse.
Speaker Change: Our business. We are also looking at the opportunity to further enhance our brand awareness outside of China market. Thank you.
Okay.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Okay.
Speaker Change: And our next question comes from the line of Brian Gong from Citi. Your line is open.
Brian Gong: Good morning, James, Jane, Cindy, and Michelle. Happy New Year. And thanks for taking my question. My question is also regarding our international platform, Trip.com, which has recorded strong growth. Could you provide a bit more details on Trip.com's global footprint, GMO, and revenue contribution, as well as profitability? Also, what are the primary markets that Trip.com focuses on, and what are its key competitive advantages in those markets versus its competitors? Thank you. Thank you. We anticipate that Trip.com will contribute 15 to 20% of the group's total revenue over the next three to five years, with mid to high double-digit growth. And we believe that Trip.com growth is built upon our robust product logistics. Supplier chains, service standards, as well as technologies that we apply across various geographical regions.
Brian Gong: Good morning, James Jane Cindy and Michelle happy New year, and thanks for taking my question.
Brian Gong: Question is also.
Brian Gong: My question is also regarding <unk>.
Brian Gong: Our international platform trip.
Brian Gong: <unk> Dot com, which has recorded strong Bruce could you provide a bit more details on trip, though comps like global Creech Jam and a revenue contribution as well as profitability.
Brian Gong: Also what's not.
Brian Gong: Our primary markets, that's true Stockholm brokers, and what are <unk> key competitive advantages use those markets.
Bruce: You know its competitors. Thank you.
Bruce: Thank you we anticipated at the trip to haul will contribute a 15% to 20% of the group's total revenue over the next three to five years.
Bruce: With a mid to high double digit kick our growth and we believe that the trip they'll call rose is built upon our robust product logistics.
Supplier chain.
Bruce: Service standards as well as technologies that we apply across various Gerald Wesbanco riches.
Brian Gong: Our Trip.com is primarily focusing on the Asian market, which is the top outbound destination for travelers from both China and other parts within the region. It's worth noting that the combined size of the top Asian markets, excluding China, surpasses that of the mainland China in terms of growth booking. Our growth strategy with Trip.com starts with leveraging the strong air traffic from Skyscanner, then progresses from meta search to the mobile app, broadening our offering from air travel to hotel bookings and extends our reach from Asia, hopefully, to the rest of the global travel. Meanwhile, we anticipate that Trip.com will be profitable within the same timeframe. This will be driven by scalability, increased marketing efficiency through a strong mobile presence and With regard to the competitive advantage of our Trip.com platform, I think, firstly, Trip.com's mobile app offers a smooth and user-friendly search and booking experience.
Bruce: Oh trips all club primarily focusing.
Bruce: On the Asia market, which is the top outbound destinations for travelers from both China and other parts within the region.
Bruce: It's worth noting that the combined size of the top Asian market, excluding China surpasses that of the mainland China in terms of the gross bookings.
Bruce: Our growth strategy with trip dotcom stocks with leveraging the strong air traffic from Skyscanner.
Bruce: Set that progresses from meta search too.
Bruce: The mobile App are broadening our offering from air travel to the hotel bookings and extend our reach from Asia, hopefully to the rest of the global travel.
Bruce:
Bruce: Meanwhile, we and we.
Bruce: Dissipate that tripped I'll call what to be profitable within the same timeframe.
Bruce: This will be driven by the scalability increased marketing efficiencies through a strong mobile presence and brand name as well as a shift.
Bruce: The revenue mix February.
Bruce: Our hotel bookings.
With regards to the competitive advantage of our trip Dot com platform.
Bruce: I think firstly chip they'll call us mobile App offers a smooth and user friendly search and booking experience.
Cindy Xiaofan Wang: We also utilize our AI tools to provide personalized recommendations and special offers, which enhances our user engagement. Secondly, our comprehensive one-stop model covers nearly all travel needs, making it especially attractive to mobile app users. Our extensive experience in China has further solidified our expertise in this area. Thirdly, we offer 24-hour, 7-day customer services through mobile calls, online chats, or emails, ensuring users have a dependable content point for any issues that they encounter. Lastly, Trip.com provides a highly competitive product offering thanks to our group's strong market presence and well-established supplier relationship.
Bruce: We also utilized our AI choice to provide personalized recommendations.
Bruce: And special offers which enhancing our user engagement.
Bruce: Secondly, our comprehensive one stop mobile remote model.
Bruce: Model covers near.
Bruce: Nearly all travel needs, making it especially attractive to mobile app users.
Bruce: Our extensive experience in China has further solidified.
Bruce: Solidify our expertise in this area.
Bruce: We offer 24.
Bruce: We offer 24 hours seven days customer services through our mobile calls online chats or emails ensuring users have a dependable content point for any issues that are encountered.
Bruce: Lastly trip Dot com provides highly competitive product offerings.
Bruce: Two our group's strong market presence and well established at a supplier.
Bruce: <unk> ships.
Speaker Change: Thank you.
Cindy Xiaofan Wang: Thank you. One moment for our next question. And I see this.
Speaker Change: Okay.
Speaker Change: Thank you.
One moment for our next question.
Michelle Qi: This is all the time we have for Q&A today. I will now turn it back to Michelle Qi for any closing remarks. Thank you. Thank you, everyone, for joining us today. You can find a transcript and a webcast of today's call on investors.trip.com. We look forward to speaking with you on our first quarter of 2024 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. Everyone have a great day. Thank you for watching. Please subscribe.
Speaker Change: Actually this.
Speaker Change: This is all the time, we have for Q&A today, I will now turn it back to Michelle Qi for any closing remarks.
Michelle Qi: Thank you thank.
Michelle Qi: Thank you everyone for joining us today, you can find the transcript and webcast of today's call on the Investor trip Telecom will look forward to speaking with you on our first quarter of 2024 earnings call. Thank you and have a good day. Thank you very much.
Michelle Qi: Yeah.
Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect everyone have a great day.
Speaker Change: Okay.
Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].