Q2 2024 Trip.com Group Ltd Earnings Call

August 27, 2024

Operator: Good day, and thank you for standing by. Welcome to Trip.com Group 2024 Q2 earnings conference call. At this time, all participants are now in listening-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one again. Please be advised that today's conference is being recorded.

Good day and thank you for standing by welcome to Chip Dotcom script 2020, full Q2 earnings conference call.

At this time.

Speaker Change: Participants on a listen only mode.

Speaker Change: After the Speakers' presentation there'll be a question and answer session to ask a question. During this session you will need to press star one on your telephone.

Johan: Sure, Thanks yacht and automated message advising Johan is raised to.

Do you have to draw your question. Please press star one again.

Speaker Change: Please be advised that today's conference is being recorded.

Operator: I would now like to head to conference over to your speaker today.

Mrs.: I would now like to hand, the conference I bet, you'll speaker today Mrs.

Michelle Qi: Michelle, Qi, Senior IR Director, please go ahead. Thank you, Maggie. Good morning, and welcome to Trip.com Group's second quarter of 2024 earnings conference call. Joining me today on the call are Mr. Jens Liang, Executive Chairman of the Board. Ms. Jens Sun, Chief Executive Officer, and Ms. Cindy Wang, Chief Financial Officer.

Speaker Change: Sure Chi Senior IR director. Please go ahead.

Maggie: Thank you Maggie.

Speaker Change: Morning, and welcome to chip they'll come groups second quarter of 'twenty 'twenty four earnings conference call.

Speaker Change: Joining me today on the call are Mr. James Liang Executive Chairman of the board.

Speaker Change: MS Jane Sun, Chief Executive Officer and.

Speaker Change: Ms Cindy Wang Chief Financial Officer.

Michelle Qi: 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 material or different from the views expressed today. A number of potential risks and uncertainties are outlined in Trip.com Group's public filings with the Securities and Exchange Commission. Trip.com Group does not undertake any obligation to update any forward-looking statements, except as required under applicable law.

Speaker Change: You are in 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 1995.

Speaker Change: These forward looking statements involve inherent risks and uncertainties.

Speaker Change: As such.

Speaker Change: Results may be materially different from the views expressed today.

Speaker Change: A number of potential risks and uncertainties are outlined in chip Bill Com group's public filings with the Securities and Exchange Commission.

Speaker Change: They'll come group does not undertake any obligation to update any forward looking statement, except as required under applicable law.

Michelle Qi: Jens, Jens, and Cindy will share our strategy and business updates, operating highlights, and financial performance for the second quarter of 2024, as well as our trip for the third quarter of 2024. After the prepared remarks, we will have; I would turn the call over to Jens.

Speaker Change: Yes, Jane and Cindy will share our strategy and business updates operating highlights and financial performance for the second quarter of 2024 as well as all chips for the third quarter of 2024.

Speaker Change: After the prepared remarks, we will have in the Q&A session.

Speaker Change: With that I will turn the call over to James.

Jens Liang: Jens, please. Thank you, Michelle, and thanks everyone for joining us on this call today. Before we proceed further, I would like to highlight that today marks a significant step towards innovation in our approach. In a departure from traditional presentation, we are leveraging AI to facilitate our discussion. Through my digital twin, I am pleased to present to you one, the latest travel trends and developments in the market and two, our AI innovations and the business progress we have made so far. Building on the momentum from our robust first quarter, we are delighted to report continued growth across all segments in the second quarter, especially for cross-border travel.

Jane Sun: Yes. Please.

Jane Sun: Yes.

James Liang: Thank you Michelle and thanks, everyone for joining us on this call today before we proceed further I would like to highlight that today marks a significant step towards innovation in our approach and a departure from traditional presentation. We are leveraging AI to facilitate our discussion.

Speaker Change: Through my digital twin I am pleased to present to you.

James Liang: One the latest travel trends and developments in the market and to our.

James Liang: AI innovations and the business progress we have made so far.

James Liang: Building on the momentum from our robust third quarter. We are delighted to report continued growth across all segments in the second quarter, especially for cross border travel.

Jens Liang: In the second quarter, outbound travel remains popular and continues to drive growth in the travel market. With strong interest in popular A-PAC destinations like Japan and Thailand, major international events such as the European Soccer Cup and the Olympics have also attracted a diverse array of travelers to Europe, extending travel distances and enriching cultural experiences. Interestingly, our AI-powered trend data revealed that the introduction of new flight routes can significantly increase travelist interest in those specific destinations. Over the past three months, we have observed that new flight routes have doubled or more than double search volumes for the corresponding destination.

James Liang: Second quarter outbound travel remains popular and continue to drive growth in the travel market with strong interest in popular APAC destinations like Japan, and Thailand major international events, such as the European Soccer Cup and the Olympics have also attracted a diverse array of travelers to Europe extending travel distances.

James Liang: And then Richard cultural experience.

Richard: Interestingly, our AI powered Pip trends data revealed that the introduction of new flight route can significantly increase travelers interest in those specific destination.

Richard: Over the past three months, we have observed that new flight routes have doubled or more than doubled search volumes for the corresponding destination.

Jens Liang: Simultaneously, inbound travel to China has seen remarkable growth in the first half of 2024, with a 150% year-on-year increase. Notably, visitors from visa-free countries have surged by an impressive 190% over the same period. As international travelers explore the diverse landscapes of China and Chinese travelers venture to oversee destinations, the demand for tailored inspirations and personalized recommendations is growing. Common questions about must-do activities, must-try bites, and must-visit attractions highlight the need for reliable guidance. We strive to leverage AI to provide users with fresh and trendy options, empowering them to plan less and travel more. Powered by large language models, we can analyze vast amounts of data to understand individual preferences, respond to contingencies with adaptive recommendations, and deliver customized itineraries that resonate with each traveler's unique interest.

Richard: Simultaneously inbound travel to China has seen remarkable growth in the first half of 2024 with a 150% year on year increase notably visitors from visa free countries.

Richard: First by an impressive 190% over the same period.

Richard: As international travelers explore the diverse landscape of China, and Chinese travelers venture to overseas destination.

Richard: The demand for tailored inspirations and personalized recommendations is growing.

Speaker Change: Aman questions about muscular activities must probably bite and must visit attraction highlight the need for reliable guidance.

Speaker Change: We strive to leverage AI to provide users with fresh and friendly option empowering them to plan lap and travel more powered by large language models, we can analyze vast amounts of data to understand individual preferences.

Speaker Change: One two contingencies with adaptive recommendation and deliver customized itineraries that resonate with each travelers unique interest.

Jens Liang: In June, we unveiled our AI-powered 2024 Trip Best Global and Asia 100 List, which are based on real user reviews and year-round sales popularity. These lists enable travelers to select the best experiences a destination has to offer, including not only hotels and attractions, but also lifestyle choices such as restaurants and nightlife. Furthermore, our Trip Trends List tracks the hottest travel topics and events, revealing the latest travel trends based on user searches. These trends indicate that more individuals are now directing their discretionary income towards enriching travel experiences and premium services. For example, according to Trip Trends, the ancient Egyptian exhibition in Shanghai has been China's top attraction for the past three months.

Speaker Change: In June we unveiled our AI powered 2024 trip that global and Asia 100 list.

Speaker Change: These are based on real user reviews and year round Pell popularity. These lifts enable travelers to select the best experiences destination has to offer including not only hotels and attraction, but also lifestyle choices such as restaurants and nightlife.

Speaker Change: Furthermore, our trip translate protract, the hottest travel topics and events, revealing the latest travel trends based on user purchase.

Speaker Change: These trends indicate that more individuals are now directing their discretionary income towards enriching travel experiences and premium services.

Speaker Change: For example, according to trip trends to the ancient Egyptian exhibition in Shanghai.

Speaker Change: Top attraction for the past three months.

Jens Liang: Adding a playful twist to the experience, we introduce a unique visit with your cat's ticket, available exclusively on our platform, allowing visitors to bring their feline friends to see the cat's mummies. By making trip planning easier and more enjoyable, we enhance customer satisfaction, foster loyalty, and encourage repeat visits. These improvements ultimately drive growth and innovation within the travel industry. In conclusion, travel demand remains resilient as the enduring human desire to explore makes travel a lifelong pursuit for many. As we look to the future, AI stands ready to revolutionize the travel industry, offering unparalleled opportunities to inspire new journeys and hands-user experiences and boost operational efficiency.

Speaker Change: Adding a playful twist to the experience we introduced a unique visit with your cap ticket available exclusively on our platform, allowing visitors to bring their feline friends to see the cat mummy.

Speaker Change: By making trip planning easier and more enjoyable, we enhanced customer satisfaction foster loyalty and encourage repeat visits.

Speaker Change: These improvement ultimately drive growth and innovation within the travel industry.

In conclusion travel demand remains resilient at the enduring human desire to explore makes travel a lifelong pursuit for many as.

Speaker Change: As we look to the future AI stands ready to revolutionize the travel industry offering unparalleled opportunities to inspire new journeys enhance user experiences and boost operational efficiency we.

Jens Liang: We are committed to harnessing the power of AI and unlocking its full potential, ensuring we deliver exceptional value and continuous innovation to meet the evolving needs of our customers.

Speaker Change: We are committed to harnessing the power of AI and unlocking its full potential ensuring we deliver exceptional value and continuous innovation to meet the evolving needs of our customers with that I will turn the call over to Jane for operational highlights.

Jane: With that, I will turn the call over to Jane for operational highlights. Thank you, Jane. Good morning, everyone.

Speaker Change: Okay.

Jane Sun: Thanks Wolfgang.

Jane Sun: Good morning, everyone I'm also excited now.

Jane: Like Jane, I am also excited to introduce my digital self as we explore a new way of delivering our insight. By employing AI to guide this segment of the presentation, I will be showcasing key operational highlights and performance metrics across our various market segments. As a quick overview, our net revenue in Q2 grew by 14% year-over-year. Our adjusted everyday margin for this quarter was 35%. Over the past quarter, our hotel reservations by Chinese travelers have fared by around 20% year-over-year, reflecting its enduring interests. We are pleased to see that travel consumption in China remains resilient and the travel market continues to show robust growth following a strong start in 2024.

Speaker Change: So for a new way of delivering our inside.

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Jane: Outbound travel continues to be a significant driver of market growth, with international flight capacity restored to about 75% of the pre-pandemic levels. During the quarter, our outbound hotel and air ticket booking recovered to 100% compared with 2019 levels, continuing to outtake the industry average by an impressive 20-30%. Remarkably, booking surged to more than 120% of 2019 levels during the May-Lover Day holiday and over 110% during the Dragon Bolt Festival. The APAC region remains the top choice for Chinese travelers, with visa-free destinations such as Singapore, Thailand, and Malaysia seeing a strong refrigerant. In Northeast Asia, a favorable exchange rate has made Japan an even more attractive destination, and Korea had also experienced a notable increase in booking.

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Jane: Long-haul destinations are also gaining popularity; improved visa processing and international events such as the Europe Cup and the Olympics have further fueled this trend, leading to a year-over-year increase of over 100% in travel to France and Europe during the summer. The expanding travel radius of Chinese travelers indicates the eagerness to explore distant destinations, highlighting a shift toward higher travel expenditure. In addition to the increasing popularity of outbound travel, the enthusiasm for exploring destinations within China remains strong.

Speaker Change: Longhaul destinations are also coming popularity.

Speaker Change: With the prospect of them internationally banks, such as the World Cup umbrella.

Speaker Change: Further for a good strong leading to a year over year increase of over 100% and travel to pump in Europe during the summer.

Speaker Change: We are expanding travel radar for Chinese travelers.

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Speaker Change: In addition to the on crystal's popularity of outbound travel.

Speaker Change: Thank you welcome for exploring destinations within China remains strong.

Jane: To meet the changing preferences of travelers and support our hotel partners, Trips to Calm Groups is continually innovating. We collaborate closely with hotel partners to explore innovative use cases and offer targeted products and services such as enticing hotel packages and Old Friends Club promotion groups to gain traction to different customer cohorts. Interestingly, more travelers are now kicking out city jams in lesser-known tier 2 and 3 cities. To foster this trend, we have teamed up with 27 cities to boost local tourism. Cities like Chenzhou, Zubo, Luoyang, and Anshan have seen impressive growth rates, with traveler numbers doubling or even tripling year over year.

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Speaker Change: Local tourism.

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Jane: Additionally, we are collaborating with 22 local airports to form a marketing alliance, aimed at enhancing connectivity between regional and mainline flights. This initiative not only makes travel more convenient but also enhances the appeal of this destination, driving economic growth in this region.

Speaker Change: We are collaborating with 22 local airports perform a marketing alliance owned hospital kind of typical ruffino and online cloud platform that supports not only make travel more from volume, but also in terms of Brazil.

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Jane: On the global front, our International OTA platform has also experienced significant growth, with revenue scoring by around 70%. This includes a notable 76% increase in revenue from the APAC region. As we continue to focus on our mobile-first strategy, currently more than 65% of transactions on our International OTA platform are conducted through mobile platform. In Asia, this figure climbs even higher to around 75%. Building on our success in the APAC region, we are also witnessing an increasing interest from global travelers in visiting China. This high-speed interest has led to remarkable growth in our inbound travel segments, with a nearly 200% surge in looking in the first half of 2024 compared to the same period last year.

Speaker Change: Okay.

On a global front, our international Ultra platform has also experienced significant growth with revenues growing by around seven 4%.

Speaker Change: A note about 7% to 6% revenue from APAC.

Speaker Change: We'll continue to focus on our mobile first radical currently more than 5% of transactions on our international outdoor platform all conducted through mobile platform also at that time.

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Speaker Change: On China.

Speaker Change: Heightened interest have led to remarkable growth on our inbound travel program with nearly 200%.

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Jane: Inbound travel now accounts for more than 25% of our International OTA platform's revenue, up from the teen's level prior to COVID. Typically, we keep some countries with data free entry to China, arguing at the fastest rate, while Beijing, Shanghai, Guangzhou, and Xinjiang remain popular destinations. Foreign visitors are increasingly exploring cities such as Jiang Xiaoxi, Xi, Chengdu, and Harbin. China has facilitated travel by establishing mutual visa-free agreements with 23 countries and implementing a unilateral visa-free policy for citizens from 15 countries in Europe and Oceania. Additionally, citizens from 64 countries can benefit from a 72-144-hour visa-free transit policy when entering China.

Speaker Change: Bound travel now account for more than 25% of our international Ultra platform revenue up from the current level prior to Copel.

Speaker Change: Hopefully well see some countries report the full answer for prime now aren't growing at the fastest rate.

Our pro forma Shanghai, Guangzhou, and Shenzhen remained popular destination.

Speaker Change: Visitors are increasingly exploring Shanghai.

Speaker Change: Chengdu and harpoon.

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Speaker Change: Question really critical from fiscal four countries from Democrats on a seven for 144 hour with a full transfer policy when entering China first.

Jane: These policies allow international travelers to take a closer look and experience China's first time. We are glad that China continues to address empty challenges for foreign visitors and look forward to growing inbound business with industry partners.

Speaker Change: <unk> policies allow international travelers to Copa closer look on China first time, we are glad that China continues to address this challenge of borrowings.

Speaker Change: And we look forward to growing inbound business with industrial partners.

Speaker Change: Yes.

Jane: As we continue to expand our conventional business segment, we are thrilled to announce the performance of our old friends club, which was launched just last quarter to speeder to the 50 and above silver generation. Here, today's ECE users have spent more than 1.6 billion RMB on our platform. If the treatment comes at a time when the travel preferences of senior travelers have evolved notably over the past year.

Speaker Change: After completing the conventional footprint.

Speaker Change: Thrilled to announce the performance of our old friends.

Speaker Change: This was launched just last quarter to quarter to the first two are Bob Silber generation.

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Speaker Change: And consequently group towards what the go to choice for mental framework. However, at 2024 helpful shift towards customized correct our food.

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Speaker Change: Family members towards their own phone to assist elderly relative and planning trips and comparable travel perform their final from travel.

Jane: With China's economy on the rise, the silver generation is no longer synonymous with budget travel. Instead, they are increasingly drawn to meet the high and travel experiences. Seeking higher quality and more unique offerings, we see significant potential for future business growth within this demographic and are committed to catering to their evolving preferences to enhance their travel experiences.

Speaker Change: Yes.

Speaker Change: With China's economy on the wrong fulfill their generation with no longer synonymous with budget travel.

Speaker Change: They are increasingly drawn with the high on travel.

Speaker Change: Second higher quality and more unique offerings.

Speaker Change: With significant potential for future business growth within with demographics.

Speaker Change: And are committed to portray to their evolving preferences from Hasbro travel experimental.

Jane: In addition to developing initiatives tailored to the senior population, we also recognize the rising popularity of entertainment plus travel products among the younger generation. This innovative approach has proven highly effective, with the GNV of these products increasing by more than 70% year-over-year, reflecting user's clearing time and the trusted space in our brand. With this new type of products added to our arsenal, it also serves as an important tool for driving user acquisition. Additionally, to further expand our reach and take us to a global audience, we have rolled out these products on our global platform in six major Asian markets.

Speaker Change: Yeah.

Speaker Change: In addition to developing electrical performance.

Speaker Change: The former population.

Speaker Change: Also recognized the rising popularity of entertainment travel product among the younger generation.

Speaker Change: Innovative approach has proven highly effective with the <unk>.

Speaker Change: Products improved by more than 70% year over year, reflecting clearly comp and the trust of both in our brands with this new type of product added to our Arsenal. It also serves as an important tool for driving with the acquisition of.

Speaker Change: Additionally to further expand our reach to a global audience, we have rolled out this product on a global platform.

Jane: This strategic move ensures that we can attract and engage young travelers from diverse backgrounds, reinforcing our commitment to innovation and customer satisfaction.

Speaker Change: For open market. This strategic move ensures that we can attract young.

Speaker Change: Young travelers from diverse backgrounds, reinforcing our commitment to innovation and customer satisfaction.

Jane: At Trip.com Group, we prioritize not only business development, but also social responsibility and industry sustainability. This commitment to these values has significantly improved our MSI rating, elevating it by two levels from BD2A. To further reduce greenhouse gas emissions, we offer electric vehicle options for car rentals and actively promote the utilization among our users. Additionally, we encourage our hotel partners to install solar panels to harness renewable energy. Our flexible work-from-home options also contribute to reducing carbon emissions and enhancing employer satisfaction. In summary, travel consumption in China continues to demonstrate remarkable resilience, with robust demand across various segments.

Speaker Change: At <unk> Dot Com group, we will prioritize not only business development, but also social responsibility on industry sustainability.

Speaker Change: Shipments to these values have significantly improved our in our Florida elevating will buy two level from <unk> to.

Speaker Change: Further reduce greenhouse gas emissions, we offer electric vehicle options for car rental and actively promote or with levels from among our users. Additionally, we encourage our hotel partners to install solar panels to harness renewable energy our flexible work from home options also contributed to reducing carbon emissions and enhancement.

Operator: Good day and thank you for standing by.

Operator: Welcome to Trip.com Group 2024 Q2 earnings conference call. At this time, all participants are now listening only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star one on your telephone. You will then hear an automated message advising your hand is raised. To have enjoyed your question, please press star one one again. Please be advised that today's conference is being recorded.

Speaker Change: Employee satisfaction.

Speaker Change: So in summary travel consumption in China continues to demonstrate remarkable resilience with robust demand across various segments. The positive market outlook instills, a sense of optimism and drives our enthusiasm for the new unless of course, we have introduced.

Jane: The positive market outlook instills a sense of optimism and drives our enthusiasm for the new initiative we have introduced. By collaborating closely with our dedicated partners, we are poised to achieve even greater success.

Speaker Change: By collaborating closely with our dedicated partners, we are poised to achieve even greater success.

Cindy Wang: With that, I will now turn the call over to Cindy. Thanks Jane, good morning everyone. For the second quarter of 2024, Trip.com Group reported a net revenue of 12.8 billion RMB, representing a 14% increase from the same period last year and a 7% increase from the previous quarter. Primarily due to strong recovery in the travel market, accommodation reservation revenue for the second quarter was 5.1 billion RMB, representing a 20% increase year over year and a 14% increase quarter over quarter. Outbound hotel bookings have fully recovered to the 2019 level. Domestic hotel bookings have also seen robust growth and outpaced the industry, despite a tough comparison basis.

assembled: With that I will now turn the call over to assembled.

Operator: I would now like to hand the conference over to your speaker today.

Speaker Change: Okay.

Michelle Qi: Michelle Qi, Senior IR Director, please go ahead. Thank you, Maggie.

Michelle Qi: Michelle Qi, Senior IR Director, please go ahead. Thank you, Maggie. Good morning and welcome to Trip.com Group's second quarter of 2024 earnings conference call. Joining me today on the call are Mr. Jens Leon, executive chairman of the board. Ms. Jens Sun, chief executive officer and Ms. Cindy Wang, chief financial officer.

Speaker Change: Hum.

Thanks, James Good morning, everyone for the second quarter of 2024, <unk> Dot Com group reported a net revenue of $12 8 billion renminbi, representing a 14% increase from the same period last year and a 7% increase from the previous quarter, primarily due to a strong recovery.

Michelle Qi: Good morning and welcome to Trip.com Group's second quarter of 2024 earnings conference call.

Michelle Qi: Joining me today on the call are Mr. Jens Leon, executive chairman of the board. Ms. Jens Sun, chief executive officer and Ms. Cindy Wang, chief financial officer. Here in 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 material or different from the views expressed today.

Speaker Change: In the travel market accommodation reservation revenue for the second quarter was $5 1 billion renminbi, representing a 20% increase year over year, and a 14% increase quarter over quarter outbound hotel bookings has fully recovered to the 2019 level domestic hotel.

Operator: Here in 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 material or different from the views expressed today. A number of potential risks and uncertainties are outlined in Trip.com Group's public filings with the security and exchange commission. Trip.com Group does not undertake any obligation to update any forward looking statements except as required under applicable laws.

Speaker Change: Bookings have also seen robust growth and outpaced the industry. Despite a tough comparison basis transportation ticketing revenue for the second quarter was $4 9 billion renminbi, representing a 1% increase year over year, and a 3% decrease quarter over quarter outbound air ticket book.

Cindy Wang: Transportation ticketing revenue for the second quarter was 4.9 billion RMB, representing a 1% increase year over year and a 3% decrease quarter over quarter. Outbound air ticket bookings have fully recovered to the 2019 level, with our domestic air business outpacing the market and global air business experiencing robust growth. Package tour revenue for the second quarter was 1.0 billion RMB, representing a 42% increase year over year and a 16% increase quarter over quarter. Domestic package tour has already surpassed the 2019 level and continue to show robust growth. The year over year growth was mainly driven by outbound package tour, which has increased by multiple.

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 Group does not undertake any obligation to update any forward looking statements except as required under applicable laws. Jens, Jens and Cindy will share on strategy and business updates, operating highlights and financial performance for the second quarter of 2024, as well as all trips for the third quarter of 2024. After the prepared remarks, we will have a Q&A session. With that, I will turn the call over to Jens.

Speaker Change: <unk> has fully recovered to the 2019 level with our domestic air business outpacing the market and global air business experiencing robust growth packaged tour revenue for the second quarter was one zero billion renminbi, representing a 42% increase year over year and 16.

Operator: Jens, Jens and Cindy will share on strategy and business updates, operating highlights and financial performance for the second quarter of 2024, as well as all trips for the third quarter of 2024. After the prepared remarks, we will have a Q&A session.

Speaker Change: <unk> increased quarter over quarter domestic package tour has already surpassed the 2019 level and continue to show robust growth the year over year growth was mainly driven by outbound package tour, which has increased by multifold corporate travel revenue for the second quarter was 600.

Jens Leon: With that, I will turn the call over to Jens. Jens, please. Thank you, Michelle. And thanks everyone for joining us on this call today.

Cindy Wang: Corporate travel revenue for the second quarter was 633 million RMB, representing an 8% increase year over year and a 24% increase quarter over quarter. This was primarily due to more companies choosing to adopt managed corporate travel services, excluding share-based compensation charges. Adjusted product development expenses for the second quarter decreased by 2% year over year. Adjusted general and administrative expenses for the second quarter increased by 6% year over year, mainly due to an increase in personnel related expenses. Adjusted sales and marketing expenses for the second quarter increased by 22% from the previous quarter and increased by 20% from the same period last year.

Jens Leon: Jens, please. Thank you, Michelle. And thanks everyone for joining us on this call today.

Speaker Change: 33 million renminbi, representing an 8% increase year over a year and a 24% increase quarter over quarter. This was primarily due to more companies choosing to adopt managed corporate travel services, excluding share based compensation charges adjusted product development expense.

Jens Leon: Before we proceed further, I would like to highlight that today marks a significant step towards innovation in our approach. In a departure from traditional presentations, we are leveraging AI to facilitate our discussion. Through my digital twin, I am pleased to present to you one, the latest travel trends and developments in the market and two, our AI innovations and the business progress we have made so far. Building on the momentum from our robust first quarter, we are delighted to report continued growth across all segments in the second quarter, especially for cross-border travel.

So for the second quarter decreased by 2% year over year, adjusted General and administrative expenses for the second quarter increased by 6% year over year, mainly due to increase in personnel related expenses.

Speaker Change: <unk> sales and marketing expenses for the second quarter increased by 22% from the previous quarter and increased by 20% from the same period last year. The increase was primarily due to increased marketing promotion activities to drive business growth, particularly for our global OTT platforms.

Cindy Wang: The increase was primarily due to increased marketing promotion activities to drive business growth, particularly for our global OTA platform. Adjusted EBITDA margin was 35% for the second quarter compared with 33% in the same period last year and in the previous quarter. Diluted earnings per ordinary share and per ADS were among the 5.57 or US$77 for the second quarter of 2024. Excluding share-based compensation charges and fair value changes of equity securities investments and exchangeable senior notes, non-GAAP diluted earnings per ordinary share and per ADS were among the 7.25 or US$1 for the second quarter. As of June 30, 2024, the balance of cash and cash equivalents, restricted cash, short-term investment, held to maturity time deposit, and financial products was 99.0 billion RMB or 13.6 billion US dollars.

Jens Leon: In the second quarter, outbound travel remains popular and continues to drive growth in the travel market. With strong interest in popular A-PAC destinations like Japan and Thailand, major international events such as the European Soccer Cup and the Olympic have also attracted a diverse array of travelers to Europe, extending travel distances and enriching cultural experiences. Interestingly, our AI-powered trip trend data revealed that the introduction of new flight routes can significantly increase travel's interest in those specific destinations.

Adjusted EBITDA was $4 4 billion renminbi for the second quarter compared with $3 7 billion renminbi in the same period last year and 4.0 billion renminbi in the previous quarter adjusted EBIT margin was 35% for the second quarter compared with 33%.

Speaker Change: In the same period last year and in the previous quarter diluted earnings per ordinary share and per avs were RMB 557, or U S. Dollars 77 for the second quarter of 2024, excluding share based compensation charges and fair value changes of equity securities investments and.

Jens Leon: Over the past three months, we have observed that new flight routes have doubled or more than double-search volumes for the Corresponding Simultaneously, inbound travel to China has seen remarkable growth in the first half of 2024, with a 150% year-on-year increase. Notably, visitors from visa-free countries have surged by an impressive 190% over the same period. As international travelers explore the diverse landscapes of China and Chinese travelers venture to overseas destinations, the demand for tailored inspirations and personalized recommendations is growing.

Speaker Change: <unk> senior notes non-GAAP diluted earnings per ordinary share and per ads will renminbi 725, or one U S dollar for the second quarter.

Speaker Change: As of June 32020 for the balance of cash on cash equivalents restricted cash and short term investments held to maturity of time deposit and financial products was 99.1 billion renminbi or $13 $6 billion. In conclusion, we are pleased to see that travel demand.

Jens Leon: Common questions about must-do activities, must try bites, and must visit attractions highlight the need for reliable guidance. We strive to leverage AI to provide users with fresh and trendy options, empowering them to plan less and travel more. Powered by large language models, we can analyze vast amounts of data to understand individual preferences, respond to contingencies with adaptive recommendations, and deliver customized itineraries that resonate with each traveler's unique interest. In June, we unveiled our AI-powered 2024 Trip Best Global and Asia 100 list, which are based on real user reviews and year-round sales popularity.

Cindy Wang: In conclusion, we are pleased to see that travel demand remains strong and that our company continues to perform well, even with a tough comparison basis. As we look ahead, we are confident that 2024 will be another great year for travel. We are dedicated to carrying out our strategic plans, which sets us up for continued growth and success.

Speaker Change: Strong and that our company continues to perform well even with a tough comparison basis. As we look ahead. We are confident that 2024 will be another great year for travel we are dedicated to carrying out our strategic plans, which sets us up for continued growth and success with that.

Operator: With that operator, please open the line for questions.

Speaker Change: Later, please open the line for questions.

Cindy Wang: Could you explain why you chose to use digital humans for this earnings call and provide more details on Trip.com Group adoption of AI technology? We chose to use digital humans for this earnings call to underscore our commitment to innovation and our dedication to leveraging transformative technology that has the potential to revolutionize the industry. By incorporating these virtual agents, we not only make our communication more engaging and captivating, but also highlight our forward thinking approach.

Speaker Change: Could you explain why you chose to use digital humans for this earnings call and provide more detail on trip com group's adoption of AI technology.

Speaker Change: We chose to use digital human for this earnings call to underscore our commitment to innovation and our dedication to leveraging transformative technology that has the potential to revolutionize the industry.

Jens Leon: These lists enable travelers to select the best experiences a destination has to offer, including not only hotels and attractions, but also lifestyle choices such as restaurants and nightlife. Furthermore, our Trip Trends list tracks the hottest travel topics and events, revealing the latest travel trends based on user searches. These trends indicate that more individuals are now directing their discretionary income towards enriching travel experiences and premium services. For example, according to Trip Trends, the ancient Egyptian exhibition in Shanghai has been China's top attraction for the past three months.

Speaker Change: By incorporating these virtual agents will not only make our communication more engaging and captivating, but also highlight our forward thinking approach.

Cindy Wang: This choice hints at exciting future applications such as in live streaming shows and other scenarios, demonstrating the versatility and transformative potential of digital human technology. On our platforms, we have already employed virtual agents like virtual James to introduce popular destinations such as Shanghai and Tian.

This choice hints that exciting future applications, such as in live streaming shows and other scenarios demonstrating the versatility and transformative potential of digital human and technology on our platform. We have already employed virtual agents like virtual game to introduce popular destinations such as Shanghai.

Jens Leon: Adding a playful twist to the experience, we introduced a unique visit with your cat's ticket, available exclusively on our platform, allowing visitors to bring their feline friends to see the cat's mummies. By making trip planning easier and more enjoyable, we enhance customer satisfaction, foster loyalty and encourage repeat visits. These improvements ultimately drive growth and innovation within the travel industry.

Speaker Change: Beyond.

Cindy Wang: In addition to the general use of generative AI and customer service, co-pilot in software engineering and the virtual agents you've seen, we have integrated several other AI powered tools to enhance user experience on our mobile platforms. These include Trip Chat, which offers tailored recommendations for top accommodations, dining options and activities around the world; Trip Trends, which showcases trending events and provides inspiration for users seeking your experiences; and Trip Genie, which helps travelers in planning their itineraries with real time insights, personalized suggestions and customizable options.

Speaker Change: In addition to the general use of generative AI and customer service co pilot in software engineering and the virtual agents you have seen we have integrated several other AI powered tools to enhance user experience on our mobile platform. These include trips.

Jens Leon: These improvements ultimately drive growth and innovation within the travel industry. In conclusion, travel demand remains resilient as the enduring human desire to explore makes travel a lifelong pursuit for many. As we look to the future, AI stands ready to revolutionize the travel industry, offering unparalleled opportunities to inspire new journeys, enhance user experiences, and boost operational efficiency.

Speaker Change: Which offers tailored recommendations for top accommodations dining options and activities around the world trip trends, which showcases trending events and provides inspiration for users seeking new experience with.

Jens Leon: In conclusion, travel demand remains resilient as the enduring human desire to explore makes travel a lifelong pursuit for many. As we look to the future, AI stands ready to revolutionize the travel industry, offering unparalleled opportunities to inspire new journeys, enhance user experiences, and boost operational efficiency. We are committed to harnessing the power of AI and unlocking its full potential, ensuring we deliver exceptional value and continuous innovation to meet the evolving needs of our customers.

Speaker Change: <unk>, which helps travelers and planning their itineraries with real time insights.

Speaker Change: Realized suggestions and customizable options overall.

Jens Leon: We are committed to harnessing the power of AI and unlocking its full potential, ensuring we deliver exceptional value and continuous innovation to meet the evolving needs of our customers.

Cindy Wang: Overall, the adoption of AI technology at Trip.com Group demonstrates our commitment to enhancing both operational efficiency and customer experience. By integrating AI across various touch points, we are able to provide more personalized, consistent, and scalable interactions, ultimately driving innovation and delivering greater value to our customers.

Speaker Change: Overall, the adoption of AI technology of trip Com group demonstrates our commitment to enhancing both operational efficiency and customer experience.

Jane: With that, I will turn the call over to Jane for operational highlights. Thank you, Jane.

Operator: With that, I will turn the call over to Jane for operational highlights. Thank you, Jane.

Speaker Change: By integrating AI across various touch points.

Speaker Change: We are able to provide more personalized consistent and scalable interactions ultimately driving innovation and delivering greater value to our customers.

Jane: Good morning, everyone. Like Jane, I am also excited to introduce my digital self as we explore a new way of delivering our insight. By employing AI to guide this segment of the presentation, I will be showcasing key operational highlights and performance metrics across our various market segments. As a quick overview, our net revenue in Q2 grew by 14% year-over-year. Our adjusted everyday margin for this quarter was 35%. Over the past quarter, our hotel reservations by Chinese travelers have first by around 20% year-over-year, reflecting this enduring interest.

Speaker Change: Yeah.

Cindy Wang: Thank you.

Speaker Change: Thank you.

Operator: As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please send by as we compile the Q&A roster. Just a moment for the next question, please.

Speaker Change: As a reminder to ask a question. Please press star one on your telephone a way for your name to be announced to assure your question.

Speaker Change: Please press star one again.

Speaker Change: Please standby as we compile the Q&A roster.

Jane: We are pleased to see that travel consumption in China remains resilient and the travel market continues to show robust growth following a strong start in 2024. Outbound travel continues to be a significant driver of market growth, with international flight capacity restored to about 75% of the pre-pandemic levels. During the quarter, our outbound hotel and air ticket bookings recovered to 100%, compared with 2019 levels. Continue to outtake the industry average by an impressive 20% to 30%.

Speaker Change: Just a month or so next question. Please.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Yeah.

Joyce Drew: Our first question comes from the line of Joyce Drew from Bank of America. Please go ahead. Good morning, James, Jianzhang, and Michelle. Thanks for taking my question. My question is related to the travel demand.

Speaker Change: Our first question comes from the line of Joyce Ju from Bank of America. Please go ahead.

Joyce Ju: Good morning, James Jane Cindy and Michelle Thanks for taking my question. My question is related to the X.

Joyce Drew: Recently, we have seen a clear desaleration trend in China's consumption growth. I'm just wondering if management has observed a similar trend in the travel spending? Any colors on individual or business travel spending behaviors will be great. Have you seen any companies tighten their travel budgets, and how does this will actually affect Trip.com's business? Thanks a lot.

Speaker Change: Recently, we have seen a clear.

Jane: Remarkably, booking search to more than 120% of 2019 levels during the May-Lay-Berby holiday and over 110% during the Dragon Bolt Festival. The A-package and remains the top choice for Chinese travelers with visa-free destinations such as Singapore, Thailand, and Malaysia seeing a strong refrigerant. In Northeast Asia, a favorable exchange rate has made Japan an even more attractive destination, and Korea had also experienced a notable increase in booking. Long-haul destinations are also gaining popularity, improved visa processing and international events such as the Europe Cup and the Olympics have further fueled this trend, leading to a year-over-year increase of over 100% in travel to France and Europe during the summer.

Speaker Change: Clear deceleration trend in China's consumption grows.

Speaker Change: I'm just wondering.

Speaker Change: And then has observed a similar trend index.

Speaker Change: Any colors on individual business travel spending behaviors will be great.

Speaker Change: Have you seen any.

Company's titles.

Speaker Change: And how does does well actually a factory of dot coms business. Thanks, a lot.

Speaker Change: <unk>.

Cindy Wang: Thanks, Joyce, for your question. What we have seen is that the GME per traveler on our platform remains quite consistent from last year. So the buying power still holds quite consistent with last year. Secondly, a lot of our customers are getting their visas to travel around the world. So part of the increase in the price overseas offset partially on the ADR pressure. So we have seen quite a steady increase. And certainly from the search volume, we realized that customers' interest to explore domestically as well as internationally are very high.

Julie: Thanks Julie.

Julie: Sure.

Speaker Change: What we have seen is patch <unk> purr travel.

Speaker Change: Traveler, our platform remain quite consistent.

Speaker Change: From last year.

Oh the <unk>.

Speaker Change: Power still hold quite consistent with last year.

A lot of our customers are getting that leads us to probably to travel around the world.

Jane: The expanding travel radius of Chinese travelers indicates the eagerness to explore distance destinations, highlighting a shift toward higher travel expenditures. In addition to the increasing popularity of outbound travel, the enthusiasm for exploring destinations within China remains strong. To meet the changing preferences of travelers and support our hotel partners, TripCom Group is continually innovating. We collaborate closely with hotel partners to explore innovative use cases and offer targeted products and services such as enticing hotel packages and all-branded club promotion deals to gain traction to different customer cohorts.

Speaker Change: So part of the increase in the Pi overseas offset partially.

Speaker Change: ADR pressure and.

So we have seen quite steady increase and certainly from the search volume we realize.

Speaker Change: Realize that customers' interest to explore domestically as well as internationally.

Cindy Wang: So we believe travel in the long run still is a robust industry. We just need to work very hard to provide the best product and service to our customers. Thank you.

Speaker Change: Hi.

So we believe travel in the long run still is a robust industry. We just need to work very hard to provide the best product and a service to our customers. Thank you.

Jane: Interestingly, more travelers are now keeping out hidden gems in lesser-known tiers, two and three cities. To foster this trend, we have teamed up with 27 cities to boost local tourism. Cities like Chenzhou, Zubo-Loyang, and Anshan have seen impressive growth rates with traveler numbers doubling or even tripling year over year. Additionally, we are collaborating with 22 local airports to form a marketing alliance, aimed at enhancing connectivity between regional and mainline flights. This initiative not only makes travel more convenient but also enhances the appeal of this destination, driving economic growth in this region.

Speaker Change: Okay.

Cindy Wang: Any thanks. Thank you.

Speaker Change: Yeah.

Speaker Change: Many thanks.

Operator: Just a moment for our next question.

Speaker Change: Thank you just a moment so next question.

Speaker Change: Okay.

Alex Poon: Next question comes from a line of Alex Poon of Morgan Stanley. Please go ahead.

Speaker Change: Next question comes from the line of Alex Poon of Morgan Stanley. Please go ahead.

Alex Poon: Hello James, James, Cindy, Michelle, and our new AI friends. Hope you had a great summer vacation. Speaking of summer holiday, could you provide more details about our travel bookings in the summer? And also the outlook for the second half of the year. Thank you very much.

Alex Poon: Hello, James Jane Cindy, Michelle and our new AI friends.

Speaker Change: You had a great summer vacation.

Alex Poon: Speaking of summer holiday could you provide more details about our travel bookings in the summer and also the outlook for second half of the year. Thank you very much.

Jane: On the global front, our International OTA platform has also experienced significant growth with revenue soaring by around 70%. This includes a notable 76% increase in revenue from the APAC region. As we continue to focus on our mobile first strategy, currently more than 65% of transactions on our International OTA platform are conducted through mobile platform. In Asia, this figure climbs even higher to around 75%, building on our success in the APAC region.

Cindy Wang: Sure. With regard to the summer performance quarter to date, our China business has maintained robust momentum, with outbound travel driving the growth. Outbound air and hotel reservations have exceeded 110 to 120% of the 2019 levels, consistently outperforming the market by 20% to 30%. Domestic hotel reservations have shown double-digit year-over-year growth despite a challenging comparison to the same period last year. With regard to the overseas platform, Trip.com has maintained robust growth in the mid to high-end double-digit percentage range.

Sure.

Speaker Change: The quota.

Speaker Change: With regard to the similar performance quarter to date, our China business has maintained.

<unk> momentum with outbound travel driving the growth.

How about air and hotel reservations have exceeded Eric.

Speaker Change: Now, reaching 110% to 120% off the 2019 levels.

System play outperforming the market by 20% to 30%.

Jane: We are also witnessing an increasing interest from global travelers in visiting China. This high-speed interest has led to remarkable growth in our inbound travel segments with nearly 200% surge in looking in the first half of 2024 compared to the same period last year. Inbound travel now accounts for more than 25% of our International OTA platform's revenue up from the King's level prior to COVID. Typically, we meet from countries with visa-free entry to China arguing at the fastest rate, while Beijing, Shanghai, Guangzhou, and Xinjiang remain popular destinations.

Speaker Change: Domestic hotel reservations have shown double digit year on year growth. Despite a challenging comparison to the same period last year.

Speaker Change: With regard to the overseas platform Triple Com has maintained robust growth in the mid to high end double digit percentage range.

Cindy Wang: With regard to the forecast for the second half, despite we always have very limited visibility due to the short-working windows in China. We expect the travel activities in the second half to generally follow normal seasonal patterns. Year-over-year comparison will be more favorable after the National Day holiday due to a relatively easier comp in the last year. In the global market, we anticipate Trip.com to continue its robust growth, with Sky Skinner and other overseas brands also expected to maintain a healthy growth trajectory.

Speaker Change: With regard to the forecast for the second half.

Speaker Change: Despite a weak we always have very limited visibility due to the short booking windows in China, We expect our the travel activities in the second half to generally follow normal seasonal patterns.

Jane: Foreign visitors are increasingly exploring cities such as Shanghai, China, China, China has facilitated travel by establishing mutual visa-free agreement with 23 countries and implementing a unilateral visa-free policy for citizens from 15 countries in Europe and Oceania. Additionally, citizens from 64 countries can benefit from a 72-144-hour visa-free transit policy when entering China. These policies allow international travelers to take a closer look and experience China's first time. We are glad that China continues to address empty challenges for foreign visitors and look forward to growing inbound business with industry partners.

Speaker Change: Although year comparison would be more favorable after the national day holiday due to a relatively easier comp in the last year.

Speaker Change: In the global market, we anticipate chip I'll call to continue its robust growth with Skyscanner and other overseas. Brent also expect it to maintain a healthy growth trajectory. Thank you.

Cindy Wang: Thank you.

Speaker Change: Thank you.

Speaker Change: Okay.

Jane: As we continue to expand our conventional business segment, we are thrilled to announce the performance of our old friends club, which was launched just last quarter, completed to the 50 and above silver generation. Here today, ECU users have spent more than 1.6 billion yuan on our platform. This achievement comes at a time when the travel preferences of senior travelers have evolved notably over the past year. In 2023, Group Tourists were the go-to choice for many seniors.

Speaker Change: Okay.

Speaker Change: Yeah.

Jane: However, 2024 has seen a shift towards customized tours, as seniors increasingly seek quality and novelty in their travel experience. Seen using demands, old friends club offers 700 exclusive products that cost 40 destinations and collaborate with 1,600 hotels to provide over 4,000 tailored hotel options. Additionally, we introduce the family car teacher. This allows younger tech-study family members to use their own phones to assist elderly relatives in planning trips and computing travel booking, thereby making travel easier for seniors.

Speaker Change: Okay.

Speaker Change: Yeah.

Thomas Chong: Next, we have Thomas Chong from Jefferies. Please go ahead.

Speaker Change: Next we have.

Speaker Change: Thomas Chong from Jefferies. Please go ahead.

Thomas Chong: Hi. Good morning. Thanks, management, for the question and the solid set of results.

Thomas Chong: Hi, Good morning, Thanks management for the question and a solid first half result.

Thomas Chong: Could you provide more details about the domestic ADL trend during the summer? What factors are contribute to the softness in price? How does that impact your business performance, and how do you expect prices to move in the future?

More details about the domestic ADR trend during the summer blockbuster tangibly able to default to that implies a help us best in class performance and how do you guys but.

Speaker Change: Just to look in the future. Thank you.

Cindy Wang: Thank you.

Cindy Wang: Thank you, Thomas. Although our domestic hotel area and average air fairs decreased on a year-over-year basis, sequentially the summer prices have proved as we enter the stronger season. The increase in hotel and air supply has put pressure on short-term prices, particularly when compared to the high benchmark set during last year's peak seasons. For instance, a number of listed hotel inventories on our platform has increased by about 20% year-over-year. Additionally, urban travel has significantly increased this year, during mid-to-high-end travelers away from only domestic options. And the decrease of hotel ADR and average air ticket price have partially offsetting our very strong volume growth.

Speaker Change: Thank you Tomas, although our domestic hotel ADR and average airfares decreased on a year over year basis sequentially, there similar prizes half truths.

Jane: With China's economy on the rise, the silver generation is no longer synonymous with budget travel. Instead, they are increasingly drawn to meet the high end travel experiences, seeking higher quality and more unique offerings. We see significant potential for future business growth within this demographic, and are committed to catering to their evolving preferences to enhance their travel experiences.

Speaker Change: Truth is slightly as we enter the stronger CS.

Speaker Change:

Speaker Change: The increase in hotel and air supply has put pressure on short term prices, particularly when compared to the high benchmark set you were at last year's peak seasons for instance, the number of listed hotel inventories are our platform has increased.

Jane: In addition to developing initiatives tailored to the senior population, we also recognize the rising popularity of entertainment of travel products among the younger generation. This innovative approach has proven highly effective with the G&B of these products increasing by more than 70% year-over-year, reflecting with the clear intent and the trusted space in our brand. With this new type of products added to our arsenal, it also serves as an important tool for driving younger acquisitions.

20% year over year.

And Additionally, outbound travel has significantly increased this year.

Speaker Change: Mid to high end travelers away from only domestic option options.

Speaker Change: Okay.

Speaker Change: And the decrease of our hotel ADR and average air ticket price have partially offsetting our very strong volume growth. However in the longer term cure it as a platform the increase in overall supply what benefits us.

Jane: Additionally, to further expand our reach and take us to a global audience, we have rolled out these products on our global platform in six major Asian markets. This strategic move ensures that we can attract and engage young travelers from diverse backgrounds, reinforcing our commitment to innovation and customer satisfaction.

Cindy Wang: However, in the longer term period as a platform, the increase in overall supply will benefit us, especially in the longer term period. With regard to the outlook, we expected the ADR pressure to ease somewhat, maybe in the Q4 this year, and to generally follow the normal seasonality in the future. While in the longer term, as I said, we believe that the extension and diversification of travel supply will significantly contribute to the overall growth stability of the travel business.

Speaker Change: Especially in the longer term cure it.

Speaker Change: With regard to the outlook.

Speaker Change: We expect that the ADR pressure to ease somewhat maybe in the Q4 this year and to generally follow the normal seasonality in the future.

Jane: As Trip.com Group, we prioritize not only business development but also social responsibility and industry sustainability. This commitment to these values has significantly improved our MSI rating, elevating it by two levels from BD2A. To further reduce greenhouse gas emissions, we offer electric vehicle options for car rentals and actively promote the utilization among our users. Additionally, we encourage our hotel partners to install solar panels to harness renewable energy. Our flexible work-from-home options also contribute to reducing carbon emissions and enhancing employer satisfaction.

Speaker Change: While in the longer term as I said, we believe that the expansion and diversification of travel supply was significantly contribute to the overall growth.

Speaker Change: Ability of the travel business. Thank you.

Cindy Wang: Thank you.

Speaker Change: Thank you.

Brian Gong: Next, we will have Brian Gong from the City.

Speaker Change: Next we will have Brian Gong from Citi. Please go ahead.

Brian Gong: Please go ahead. Ma Ying, Jianzhang, Cindy, and Michelle, thanks for taking my question, and congratulations on started results. So my question is regarding our own bond.

Jane: In summary, travel consumption in China continues to demonstrate remarkable resilience with robust demand across various segments. The positive market outlets instills a sense of optimism and drives our enthusiasm for the new initiatives we have introduced. By collaborating closely with our dedicated partners, we are poised to achieve even greater success.

Brian Gong: Morning, James Jane Cindy and Michelle Thanks for taking my question and congratulations on solid results. So my question is regarding.

Speaker Change: Our outbound.

Cindy Wang: Our own bond is in the center quarter and could please provide more details about the recovery pace of all the bond during the summer break and also the outlook for the second half of this year. And what are the latest price trends? Thank you.

Brian Gong: Yes.

Speaker Change: The competition, leaving a certain quarter and could you. Please provide more details about the recovery pace.

Speaker Change: All the volatile summer break and also the outlook for the second half of last year and what are the latest.

Cindy Wang: With that, I will now turn the call over to Cindy.

Cindy Wang: Thanks Jane, good morning everyone. For the second quarter of 2024, Trip.com Group reported a net revenue of 12.8 billion RMB, representing a 14% increase from the same period last year and a 7% increase from the previous quarter. Primarily due to strong recovery in the travel market, accommodation reservation revenue for the second quarter was 5.1 billion RMB, representing a 20% increase year over year and a 14% increase quarter over quarter. Outbound hotel bookings have fully recovered to the 2019 level.

Speaker Change: <unk> trends thank you.

Cindy Wang: The total outbound flight capacity has recovered to nearly 80 percent of the 2019's level during the summer, with Chinese airlines showing even higher recovery rates.

Speaker Change: Thank you.

The total outbound flight capacity has recovered to nearly 80% of the 2019 level during the summer with Chinese airlines, showing even higher recovery rates, we anticipate that the slides capacity will remain stable over the next couple of months.

Cindy Wang: We anticipate that the flight capacity will remain stable over the next couple of months, based on last year's patents. And we also expect a continuous improvement in the international travel offerings in the coming year, in the coming years, with regard to the pricing. During the summer, average outbound airfares are still 5 to 10 percent above the pre-COVID levels and slightly increased the quarter of a quarter.

Speaker Change: Based on last year's patents and we also expect a continuous improvement.

Speaker Change: Improvement in the international travel offerings in the coming year in the coming years with regard to the pricing during December average Albar airfare are still 5% to 10% above the pre COVID-19 levels and slightly increased quarter over quarter.

Cindy Wang: Domestic hotel bookings have also seen robust growth and outpaced the industry despite a tough comparison basis. Transportation ticketing revenue for the second quarter was 4.9 billion RMB, representing a 1% increase year over year and a 3% decrease quarter over quarter. Outbound air ticket bookings have fully recovered to the 2019 level with our domestic air business, outpacing the market and global air business experiencing robust growth. Package tool revenue for the second quarter was 1.0 billion RMB, representing a 42% increase year over year and a 16% increase quarter over quarter.

Cindy Wang: Thank you.

Speaker Change: Yeah.

Thank you.

Speaker Change: Okay.

Alex Yao: Next question, we have come from the line of Alex Yao of JP Morgan.

Speaker Change: Thank you next question come from the line of Alex Yao of Jpmorgan. Please go ahead.

Cindy Wang: Domestic package tour has already surpassed the 2019 level and continue to show robust growth. The year over year growth was mainly driven by outbound package tour which has increased by multifold. Corporate travel revenue for the second quarter was 633 million RMB, representing an 8% increase year over year and a 24% increase quarter over quarter. This was primarily due to more companies choosing to adopt managed corporate travel services, excluding share-based compensation charges.

Alex Yao: Please go ahead. Good morning, Management. Thank you for taking my question, and welcome to the AI friends to join this investment community. And I sincerely hope AI will become a powerful driver to Trip.com's long-term growth. So, coming back to the question, can you provide more details on Trip.com's performance in Q2, including a breakdown by markets and the product lines? Additionally, could you elaborate on Trip.com's margin trend? Thank you.

Alex Yao: Good morning management. Thank you for taking my question and welcome to them too Hey.

Alex Yao: Hey, guys. Thanks to John just the investment community and I sincerely hope.

Guy: Hey, Guy will become a powerful driver too should that Tom mentioned gross.

Guy: Tom Thanks for the question.

Alex Yao: Can you provide more details on <unk> dot coms performance in Q2, including a breakdown by markets.

Alex Yao: Additionally, could you elaborate.

Cindy Wang: Adjusted product development expenses for the second quarter decreased by 2% year over year. Adjusted general and administrative expenses for the second quarter increased by 6% year over year, mainly due to increase in personnel related expenses. Adjusted sales and marketing expenses for the second quarter increased by 22% from the previous quarter and increased by 20% from the same period last year. The increase was primarily due to increased marketing promotion activities to drive business growth, particularly for our global OTA platform.

Speaker Change #102: Dot com margin trends. Thank you.

Cindy Wang: Thank you, Alex. Trip.com achieved a robust revenue growth of approximately 70% in the second quarter, contributing roughly about 10.5% to the group's total revenue. The APEC region accounted for over 70% of Trip.com's total revenue and showed the strongest growth among all regions, increasing by 76% year-over-year. Cross-selling from transportation to hotels continued to rise, with hotel-related revenue accounted for 35% to 40% of Trip.com's total revenue in the second quarter. Mobile is also another contributor. Mobile contributed significantly increased with 65% to 70% of others placed through Trip.com's mobile apps globally. And in the APEC region, mobile contributes over 75%.

Alex: Thank you Alex.

Chip: Chip I'll call achieved a robust revenue growth of approximately 70% in the second quarter contributing roughly about 10, 5% to the group's total revenue.

Speaker Change #105: The APAC region accounted for over 70% of chip costs total revenue and showed the strongest growth among our reagents, increasing by 76% year over year Cross selling Francesca station, two hotels continue to rise, which hotel with hotel.

Cindy Wang: Adjusted EBITDA was 4.4 billion RMB for the second quarter compared with 3.7 billion RMB in the same period last year and 4.0 billion RMB in the previous quarter. Adjusted EBITDA margin was 35% for the second quarter compared with 33% in the same period last year and in the previous quarter. Diluted earnings per ordinary share and per ADS were at $5.57 or US$77 for the second quarter of 2024. Excluding share-based compensation charges and fair value changes of equity securities investment and exchangeable senior notes, non-gap diluted earnings per ordinary share and per ADS will rent minb, 7.25 or 1 US$ for the second quarter.

Speaker Change #105: <unk> related revenue accounted for 35% to 40% of chip chip they'll cost total revenue in the second quarter.

Mobile is also another contributor mobile contributed.

Speaker Change #105: Significantly increased with 65% to 70% of orders placed as true chip they'll call us mobile apps globally and in the APAC region.

Speaker Change #105: On the mobile contribution over 75%.

Cindy Wang: With regard to the Trip.com's margin, as mentioned in the previous quarter, the Trip.com brand will continue to prioritize growth, while closely monitor the ROI in each of the market. But given the ample growth opportunity in the international market, we will continuously invest in this brand.

Speaker Change #106: With regard to the trip cause margin.

Speaker Change #106: As mentioned in the previous quarter the trip Com brand will.

Speaker Change #106: We'll continue to prioritize gross while closely monitored the ally in the each of the markets.

Cindy Wang: As of June 30th, 2024, the balance of cash and cash equivalence, restricted cash, short-term investment, held to maturity time deposit and financial products was 99.0 billion RMB or 13.6 billion US$. In conclusion, we are pleased to see that travel demand remains strong and that our company continues to perform well even with a tough comparison basis. As we look ahead, we are confident that 2024 will be another great year for travel. We are dedicated to carrying out our strategic plans which sets us up for continued growth and success.

Speaker Change #106: Yeah.

Speaker Change #106: Given the ample growth opportunity in the international market, we will continuously to invest in this brand.

Cindy Wang: Thank you. We will also continue to focus on the product innovation as well as the service qualities to enhance the user experiences while making a necessary investment to increase our grant recognitions in the relevant market. So far, we are very pleased with our strategy and executions. With regard to the differentiation of the selling point for the Trip.com business, firstly, we are one-stop shopping centers in the travel industry, and secondly, we grow our business mainly through the mobile channels, and we already see very successful and high percentage contributions from the mobile channels, which will help us to have a strong leverage, especially on the sales marketing expenses in the longer term period.

Cindy Wang: In conclusion, we are pleased to see that travel demand remains strong and that our company continues to perform well even with a tough comparison basis. As we look ahead, we are confident that 2024 will be another great year for travel. We are dedicated to carrying out our strategic plans which sets us up for continued growth and success.

Speaker Change #107: Thank you.

Speaker Change #107: Yes.

Speaker Change #107: Okay.

Speaker Change #107: Thank you.

Speaker Change #107: Next we have.

Speaker Change #107: Joan from UBS. Please go ahead.

Joan: Thank you good morning, James Jane Cindy and Michelle. Thank you for taking my question and congratulations on the very solid results.

Operator: With that operator, please open the line for questions.

Jens Leon: Could you explain why you chose to use digital humans for this earnings call and provide more details on trip.com group adoption of AI technology? We chose to use digital humans for this earnings call to underscore our commitment to innovation and our dedication to leveraging transformative technology that has the potential to revolutionize the industry. By incorporating these virtual agents, we not only make our communication more engaging and captivating but also highlight our forward thinking approach.

Operator: Could you explain why you chose to use digital humans for this earnings call and provide more details on trip.com group adoption of AI technology? We chose to use digital humans for this earnings call to underscore our commitment to innovation and our dedication to leveraging transformative technology that has the potential to revolutionize the industry. By incorporating these virtual agents, we not only make our communication more engaging and captivating but also highlight our forward thinking approach.

Joan: I wanted to follow up on our international business.

Speaker Change #109: So our international business has achieved another quarter of very solid growth could management share. If you have observed any increased competition in the Asia markets recently, and how does that impact to our business and also could management elaborate what Oxford Dot coms key competitive advantages against local and global.

Jens Leon: This choice hints at exciting future applications such as in live streaming shows and other scenarios demonstrating the versatility and transformative potential of digital human technology. On our platforms, we have already employed virtual agents like virtual James to introduce popular destinations such as Shanghai and Teon. In addition to the general use of generative AI and customer service, co-pilot in software engineering and the virtual agents you've seen, we have integrated several other AI-powered tools to enhance user experience on our mobile platform.

Operator: This choice hints at exciting future applications such as in live streaming shows and other scenarios demonstrating the versatility and transformative potential of digital human technology. On our platforms, we have already employed virtual agents like virtual James to introduce popular destinations such as Shanghai and Teon. In addition to the general use of generative AI and customer service, co-pilot in software engineering and the virtual agents you've seen, we have integrated several other AI-powered tools to enhance user experience on our mobile platform.

Speaker Change #110: In overseas markets. Thank you.

Speaker Change #110: Sure.

Speaker Change #111: As I said, given there are ample growth opportunity.

Speaker Change #112: Especially in the APAC market.

Speaker Change #112: For all the travel players.

Speaker Change #112: Firstly I think to APAC.

Speaker Change #113: <unk> is currently the fastest the gross written.

Speaker Change #112: In the whole world.

Speaker Change #112: <unk> the online penetration rate.

Speaker Change #112: In this region is still relatively low, but there is a rapid shift from offline to online.

Speaker Change #112: As well as the mobile platform, which will benefit all the online players in this industry.

Chip: Chip I'll call aimed to provide one stop travel services.

Jens Leon: These include trip chat which offers tailored recommendations for top accommodations, dining options and activities around the world, trip trends which showcases trending events and provides inspiration for users seeking your experiences, trip genie which helps travelers in planning their itineraries with real time insights, personalized suggestions and customizable options. Overall the adoption of AI technology at trip.com group demonstrates our commitment to enhancing both operational efficiency and customer experience. By integrating AI across various touch points, we are able to provide more personalized, consistent and scalable interactions, ultimately driving innovation and delivering greater value to our customers.

Operator: These include trip chat which offers tailored recommendations for top accommodations, dining options and activities around the world, trip trends which showcases trending events and provides inspiration for users seeking your experiences, trip genie which helps travelers in planning their itineraries with real time insights, personalized suggestions and customizable options.

Chip: Including not only the transportation, but also accommodations activities and many more.

Speaker Change #114: Primarily through our mobile apps. This approach also travelers are unique and convenient experiences that's what that differentiate chip they'll call from other players.

Speaker Change #114: We will also continue to focus on the product innovation as well as the service qualities to enhance the user experiences, while making necessary investments to increase our brand recognition in the relevant markets.

Operator: Overall the adoption of AI technology at trip.com group demonstrates our commitment to enhancing both operational efficiency and customer experience. By integrating AI across various touch points, we are able to provide more personalized, consistent and scalable interactions, ultimately driving innovation and delivering greater value to our customers.

Operator: Thank you.

Speaker Change #114: So far we are very pleased with our strategies and executions.

Speaker Change #114: With regard to the the differentiation of the.

Speaker Change #115: Oh selling points for the Triple combo.

Speaker Change #115: Firstly, we are one stop shopping centers in the in the travel industry and secondly, we.

Operator: Thank you. As a reminder to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please send by as we compile the Q&A roster. Just a moment for the next question, please.

Operator: As a reminder to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please send by as we compile the Q&A roster. Just a moment for the next question, please.

Speaker Change #115: Grow our business.

Speaker Change #115: Mailings through the mobile channel and we already see very success.

Speaker Change #115: Very.

Speaker Change #115: Successful and high percentage contribution from the mobile channels, which will help us to have a strong leverage, especially on the sales marketing expenses in the longer term period, and lastly, but not least we are aiming to provide the best services in the travel industry.

Cindy Wang: And lastly, in our list, we are aiming to provide the best services in the travel industry to serve the local customers.

Speaker Change #116: Tree to serve the local customers. Thank you.

Cindy Wang: Thank you.

Speaker Change #116: Okay.

Joyce Zhu: Our first question comes from the line of Joyce Zhu, from Bank of America. Please go ahead. Good morning, James, James, Jianzhang and Michelle. Thanks for taking my question. My question is related to the travel demand. Recently we have seen a clear deceleration trend in China's consumption growth. I'm just wondering if management has observed a similar trend in the travel spending and it colors individual or business travel spending behaviors will be great.

Speaker Change #116: Okay.

Operator: Just a moment for the next question, please.

Speaker Change #117: Thank you just a moment. So next question please.

Speaker Change #117: Okay.

Speaker Change #117: Yeah.

Joyce Zhu: Have you seen any companies, tighten their travel budgets and how does this will actually affect Trip.com's business? Thanks a lot. Thanks Joyce, for your question. What we have seen is that the GME per traveler on our platform remain quite consistent from last year. The buying power still holds quite consistent with last year. Secondly, a lot of our customers are getting their visas to travel around the world. Part of the increase in the price oversees offset partially on the ADR pressure.

Simon Chun: Next, we have Simon Chun from Golden and Sex. Please go ahead. Hi, Management. Thanks for taking my question. Just one quick question in relation to the margins. Come help to see that your margin continues to trend quite well, and in this particular quarter, seems like your product development is a percent of the revenue actually falling quite sharply. Now that you're obviously going to be investing a bit more on the AI, can you perhaps help to help us to understand and quantify what sort of investment you're going to be spending? And correspondingly, the second quarter, second half, what sort of margin trend we should anticipate.

Next we have Simon Cheung from Goldman Sachs. Please go ahead.

Simon Cheung: Hi management. Thanks for taking my question just one quick question in relation to the margins.

Simon Cheung: Come help to see that your margin continued to trend quite well and in this particular quarter.

Speaker Change #119: Seems like your product.

Speaker Change #120: <unk> as a percentage of revenue actually fallen quite sharply.

Speaker Change #121: Now that you, obviously youre going to be investing a bit more on the AI.

Speaker Change #122: Can you, perhaps help to help us to understand and quantify it.

Speaker Change #123: Massimo you cannot be spending.

And of course, one thing.

Speaker Change #124: The second quarter second half once a low margin trend, we should anticipate thanks a lot.

Simon Chun: Thanks a lot.

Joyce Zhu: We have seen quite a steady increase. Thirdly, from the search volume, we realized that customers' interest to explore domestically as well as internationally are very high. We believe travel in the long run still is robust industry. We just need to work very hard to provide the best product and service to our customers. Thank you.

Cindy Wang: Sure, thank you. Generally, we expect our margin to follow the typical seasonal pattern. Q3 usually see the highest margin, slightly above the Q2 levels, while the Q4 normally is the slowest season of the year. You may notice that we increased or we invested in sales and marketing expenses in the Q2, which was in line with our expectations and consistent with our previous communications. Due to the seasonality and shift in our revenue mix, we expect that the marketing expenses ratio to slightly increase in the upcoming quarters. However, it will still demonstrate significant efficiency gains compared with our pre-COVID levels.

Speaker Change #124: Okay.

Operator: Just a moment for our next question.

Sure. Thank you.

Speaker Change #125: Generally we expect our margin to follow the typical season.

Speaker Change #126: Seasonal pattern Q3, usually see the highest margin slightly above the Q2 levels. While the Q4 normally is the slowest season at all.

Speaker Change #127: A year.

Speaker Change #126: Yeah.

Speaker Change #126: The way.

Speaker Change #126: You may notice that we increased the Oh, we invested in sales and marketing expenses in Q2, which was in line with our expectations and consistent with our previous communications.

Speaker Change #126: Due to the seasonality of shift in our revenue mix, we expect the marketing expenses ratio to slightly increase in the upcoming quarters. However.

Alex Poon: Next question comes from a line of Alex Poon of Morgan Stanley. Please go ahead.

Jens Leon: Hello James, James, Cindy, Michelle, and our new AI friends. I hope you had a great summer vacation. Speaking of summer holiday, could you provide more details about our travel bookings in the summer and also the outlook for second half of the year? Thank you very much. Sure. With regard to the summer performance quarter to date, our China business has maintained robust momentum with outbound travel driving the growth. Outbound air and hotel reservations have exceeded 110 to 120% of the 2019 levels, consistently outperforming the market by 20 to 30%.

Alex Poon: Hello James, James, Cindy, Michelle, and our new AI friends. I hope you had a great summer vacation. Speaking of summer holiday, could you provide more details about our travel bookings in the summer and also the outlook for second half of the year? Thank you very much.

Speaker Change #126: It will still demonstrate significant efficiency gains.

Eric.

Speaker Change #126: Our pre COVID-19.

Cindy Wang: In a longer term period, we expect to enhance our marketing efficiencies across markets by prioritizing direct traffic and cross-selling, as I said.

Eric: Levels in the longer term period, we expect it to enhance our marketing efficiencies across markets.

Eric: Our <unk> direct traffic and cross selling as I said.

Alex Poon: Sure. With regard to the summer performance quarter to date, our China business has maintained robust momentum with outbound travel driving the growth. Outbound air and hotel reservations have exceeded 110 to 120% of the 2019 levels, consistently outperforming the market by 20 to 30%. Domestic hotel reservations have shown double-digit year-year growth despite a challenging comparison to the same period last year. With regard to the overseas platform Trip.com has maintained robust growth in the mid to high end double-digit percentage range.

Cindy Wang: And over the next, with regard to the general margin trend, over the next few years, we anticipate that our China business margin will benefit from the scalability of the business model and a favorable business mix, the revenue mix, particularly in the outbound travel and accommodations. Meanwhile, our overseas operations will remain in the investment as well as the extension cycle. The overall group margin will reflect this business mix.

Eric: And over the next to with regard to the general margin trend over the next few years, we anticipate that our China business Martin will benefit from the scalability of the business model and as and a favorable business mix the revenue mix.

Eric: Actually in the outbound travel and <unk>.

Eric: And accommodations.

Eric: Our overseas operations will remain in the investment as well as the expansion cycle. The overall gross margin will reflect this business mix.

Jens Leon: Domestic hotel reservations have shown double-digit year-year growth despite a challenging comparison to the same period last year. With regard to the overseas platform Trip.com has maintained robust growth in the mid to high end double-digit percentage range. With regard to the forecast for the second half, despite we always have very limited visibility due to the short-working windows in China, we expect the travel activities in the second half to generally follow normal seasonal patterns.

Cindy Wang: While in the very longer term period, we do not foresee any structure limit for us to achieve the future profit margin which will be comparable with our international peers.

Eric: In the very longer term curate, we do not foresee any structure limit for us too.

To achieve the future profit margin, which well comparable with our international cares. Thank you.

Alex Poon: With regard to the forecast for the second half, despite we always have very limited visibility due to the short-working windows in China, we expect the travel activities in the second half to generally follow normal seasonal patterns. Year-over-year comparison will be more favorable after the national day holiday due to a relatively easier comp in the last year. In the global market, we anticipate Trip.com to continue its robust growth with SkyScanner and other overseas brands also expected to maintain a healthy growth trajectory.

Cindy Wang: Thank you.

Speaker Change #129: Thank you.

Speaker Change #129: Okay.

Speaker Change #130: Thank you.

Drong Shao: Our next question comes from a line of Drong Shao of Buckleys.

Speaker Change #131: Our next question comes from the line of Joel <unk> of Barclays. Please go ahead.

Jens Leon: Year-over-year comparison will be more favorable after the national day holiday due to a relatively easier comp in the last year. In the global market, we anticipate Trip.com to continue its robust growth with SkyScanner and other overseas brands also expected to maintain a healthy growth trajectory. Thank you.

Drong Shao: Please go ahead. Thank you for taking my question. It's great you are starting to use AI for your earnings cause. You also mentioned some of the AI initiatives internally, such as I think you mentioned TripBass and TripTrans.

Speaker Change #132: Thank you for taking my question.

Speaker Change #133: It's great you are starting to use AI for your earnings calls.

Speaker Change #134: You also mentioned some of the.

Speaker Change #135: Our initiatives internally such as.

Speaker Change #135: I think you mentioned chip bass and trip trends.

Cindy Wang: I was wondering if you can elaborate on exactly how those things work and from the sort of operational perspective and also the related business impact from some of these AI initiatives. Thank you.

Operator: Thank you.

Speaker Change #137: I was wondering if you can elaborate on exactly how do those things work.

Speaker Change #138: From the operational perspective, and also the <unk>.

Speaker Change #138: Related business impact.

Speaker Change #138: From some of these AI initiatives. Thank you.

Cindy Wang: Sure. TripBass and TripTrans are part of our innovative use of AI and the entire road to our dynamic content strategy. We aim to drive consumer awareness and provide relevant information that makes trip planning easier and saves time for our travelers. TripBass offers curated lists that help global travelers select the best experiences in the destinations, including not only hotels, attractions, restaurants, as well as nightlife. To date, the TripBass test covers more than 190 countries and regions across 14 popular scenes. Over 70% of TripBass users have consulted TripBass, with more than 80% finding it helpful. Travel partners featured in this list have seen significant improvement in traffic and revenue on our platform.

Okay.

Speaker Change #138: Sure.

Gymnast and trip trends are part of our innovative use of AI and are integral to our dynamic content strategy.

Speaker Change #138: We aim to drive consumer awareness and provide relevant inflammation that makes trip planning easier.

Speaker Change #139: The safe patent for our travelers and chip are best offers curated list that help robe global travelers select the best experience.

Thomas Chong: Next, we have Thomas Chong from Jeffries. Please go ahead and take a look at some of the details about the domestic ADL trend during the summer. How do you expect prices to move in the future?

Speaker Change #138: As.

Speaker Change #138: Past experiences in the destinations.

Speaker Change #138: Including not only hotels attractions restaurants, as well as night life to date, the tripped up fish test covers more than 190 countries and regions across 14 popular themes.

Speaker Change #140: Over 70% of the <unk>.

Speaker Change #141: Users have consolidate chip asked with more than 80% fighting it is helpful.

Jens Leon: Thank you. Thank you, Thomas. Although our domestic hotel idea and average air fares decreased on a year-over-year basis, sequentially the summer prices have proved the slightly as we entered the stronger season. The increase in hotel and air supply has put pressure on short-term prices, particularly when compared to the high benchmark set during last year's peak seasons. For instance, a number of listed hotel inventories on our platform has increased by about 20 percent year-over-year.

Thomas Chong: Thank you. Thank you, Thomas. Although our domestic hotel idea and average air fares decreased on a year-over-year basis, sequentially the summer prices have proved the slightly as we entered the stronger season. The increase in hotel and air supply has put pressure on short-term prices, particularly when compared to the high benchmark set during last year's peak seasons. For instance, a number of listed hotel inventories on our platform has increased by about 20 percent year-over-year.

Speaker Change #142: Travel partners featured in this list have seen significant improvement in traffic and revenue on our platform.

Cindy Wang: TripTrans tracks popular travel topics and events, providing insight into current and future trends. It is tailored to user based in different locations, and we have shared some interesting findings in how our prepared remarks.

Speaker Change #142: Chuck trends tracks popular travel topics and events, providing insight into current and future trends.

Speaker Change #142: Is tailored.

Speaker Change #143: Two user base in different locations and we have shared some interesting findings in our prepared remarks.

Cindy Wang: In addition to these two, we also introduced the AI Power Travel Assistant, Trip.Dini. Trip.Dini has continued to evolve with new features. For example, in the second quarter, the latest version allows friends to co-add it by tenorace, making the trip planning process more convenient and enjoyable. While Trip.Dini is a complex tour with future improvement. It is already one of the leading travel assistant applications in the industry, and we are pleased to observe that interactions with the Trip.Dini positively correlated with user-oity and cross-selling ratios.

Speaker Change #144: In addition to these two we also introduced the AI powered the travel assistant chip not genius Chipboard Jeanie has continued.

Jens Leon: And additionally, our bond travel has significantly increased this year, going to high end travelers away from only domestic options. And the decrease of hotel ADR and average air ticket price have partially offsetting our very strong volume growth. However, in the longer term period as a platform, the increase in overall supply will benefit us, especially in the longer term period. With regard to the outlook, we expected the ADR pressure to ease somewhat, maybe in the Q4 this year, and to generally follow the normal seasonality in the future. While in the longer term, as I said, we believe that the extension and diversification of travel supply will significantly contribute to the overall growth and stability of the travel business.

Thomas Chong: And additionally, our bond travel has significantly increased this year, going to high end travelers away from only domestic options. And the decrease of hotel ADR and average air ticket price have partially offsetting our very strong volume growth. However, in the longer term period as a platform, the increase in overall supply will benefit us, especially in the longer term period. With regard to the outlook, we expected the ADR pressure to ease somewhat, maybe in the Q4 this year, and to generally follow the normal seasonality in the future. While in the longer term, as I said, we believe that the extension and diversification of travel supply will significantly contribute to the overall growth and stability of the travel business.

Speaker Change #144: <unk> to evolve with new features for example in the second quarter. The latest version allows France, two co abbott's itineraries, making the trip planning process more convenient and enjoyable watch it not genius is a complex tool with schuh.

Operator: Thank you.

Speaker Change #144: True for future improvement it is already one of the leading travel assistant applications in the industry and we are pleased to observe that interactions.

Speaker Change #145: With the chip thought jeanie positively correlated with user loyalty and cross selling ratios.

Cindy Wang: In addition to all these new products that powered our AI, we also continuously improve our internal tools. For example, the AI-assisted instant message tool, which already significantly improves the efficiencies for our core centers. And at the same time improves the user experience. So, going forward, as James explained, we will continuously invest in AI and let AI help us to improve the user experience and as well as to control and increase the operational efficiencies for the company.

Speaker Change #146: In addition to all of these new product that's powered by AI, we also continuously to improve for us.

Speaker Change #146: Our internal choice for example, the AI assisted.

Speaker Change #146: Instant message tool, which will all of which already significantly improved the efficiencies for our call centers and at the same time improve the user experiences so going forward as Jane as James explained we will continuously to invest.

Brian Gong: Next, we will have Brian Gong from the city. Please go ahead. Ma Yuan, Jianzhang, Cindy and Michelle, thanks for taking my question and congratulations on solid results. So my question is regarding our own bond. Our own bond is in the same quarter, and could please provide more details about the recovery pace of our bond during the summer break and also the outlook for the second half of this year. And what are the latest price trends?

James Liang: In AI and to <unk>.

Jane Sun: <unk> AI help us to improve the user experience and as well as to control.

Speaker Change #147: <unk> increased the operational efficiencies for the company. Thank you.

Cindy Wang: Thank you.

Speaker Change #148: Thanks Super helpful.

Speaker Change #148: Okay.

Thank you for the question.

Ellie Jiang: Just a moment, so next question, please. Next, we have Ellie Jiang from Macquarie. Please go ahead.

Speaker Change #149: Just a moment. So next question please.

Speaker Change #149: Yeah.

Yes.

Speaker Change #150: Next we have Ali John from Macquarie. Please go ahead.

Brian Gong: Thank you. The total outbound flight capacity has recovered to nearly 80 percent of the 2019th level during the summer with Chinese airlines showing even higher recovery rates. We anticipate that the flight capacity will remain stable over the next couple of months, based on last year's patents. And we also expect a continuous improvement in the international travel offerings in the coming years, with regard to the pricing. During the summer, average outbound airfare are still 5 to 10 percent above the pre-COVID levels and slightly increased quarter over quarter. Thank you.

Ellie Jiang: Good morning, Management. Thanks for taking my questions. I have a question on inbound. Could you elaborate on the opportunities in the China inbound travel market and how do we plan to further capture this market opportunity? The opportunities also include the total revenue contribution. Can you also talk about the contribution of inbound travel to the entire Trip.com's brand's overall business? Thank you.

Speaker Change #150: Yes.

Ali John: Good morning management, Thanks for taking my questions.

Speaker Change #152: Have a question on inbound so could you elaborate on the opportunities in the China inbound travel market.

Speaker Change #153: How do we plan to further capture this market.

Speaker Change #153: Market opportunities.

Speaker Change #153: Also in terms of the total revenue contribution can you also talk about the contribution of inbound travel to the entire dot coms brands overall business. Thank you.

Cindy Wang: Sure. The inbound travel market to China represents a significant opportunity, valued at trillion R&D level. We are pleased to see China addressing entry challenges for the foreign visitors, such as visa, payment, and internet access. And we look forward to expanding our inbound business with industry partners. Trip.com is very well positioned to capitalize on these opportunities. First, our platform offers comprehensive travel information and highly competitive products and services through a convenient one-stop mobile app. And secondly, the rapidly expanding user base reflects the search in the inbound travelers to China, attracting new users from key source markets.

Sure.

Speaker Change #155: Inbound travel market to China represents a significant opportunity.

Speaker Change #156: At the trillion RMB level, we are pleased to see China addressing entry.

Dressing and sheet challenges for the foreign visitors such.

Speaker Change #157: Such as visa payment and Internet access and we look forward to extending our inbound business with industry partners.

Speaker Change #158: Chip I'll call is very well positioned to capitalize on these opportunities first our platform offers comprehensive travel information and highly competitive products and services through a convenient one stop mobile app.

Alex Yao: Next question, we have come from the line of Alex Yalff, of JP Morgan. Please go ahead. Good morning, management. Thank you for taking the question and welcome to the AI friends to join this investment community. And I sincerely hope. AI will become a powerful driver to Trip.com's long-term growth. So come back to the question.

Operator: Thank you.

Chip: And secondly, the rapidly expanding user base reflect the search in inbound travellers to China, attracting new users from key source markets.

Cindy Wang: Inbound hotel and inbound hotel and air reservations on Trip.com platform grew about 200% year over year. And inbound travel now contributes over 25% to the Trip.com brand's overall business.

Speaker Change #158:

Enbrel hotel and reservations.

Oh, and sorry, inbound hotel and air reservations on trip Com platform grew about 200% year over year and inbound travel now contributes over 25% to the trip Com brand is overall business. Thank you.

Cindy Wang: Can you provide more details on Trip.com's performance in Q2, including a breakdown by markets and the product lines? Additionally, could you elaborate on Trip.com's margin trend? Thank you. Thank you, Alex. Trip.com achieved a robust revenue growth of approximately 70% in the second quarter, contributing roughly about 10.5% to the group's total revenue. The APEC region accounted for over 70% of Trip.com's total revenue and show the strongest growth among all regions, increasing by 76% year over year.

Alex Yao: Can you provide more details on Trip.com's performance in Q2, including a breakdown by markets and the product lines? Additionally, could you elaborate on Trip.com's margin trend? Thank you. Thank you, Alex. Trip.com achieved a robust revenue growth of approximately 70% in the second quarter, contributing roughly about 10.5% to the group's total revenue. The APEC region accounted for over 70% of Trip.com's total revenue and show the strongest growth among all regions, increasing by 76% year over year.

Cindy Wang: Thank you.

Speaker Change #158: Yes.

Speaker Change #158: Okay.

Parash John: Just a moment for our next question, please. Next, we have Parash John from HSBC. Please go ahead. Thank you for taking my question. Hi, James, Jane, and Michelle.

Speaker Change #159: Thank you just a moment for our next question. Please.

Speaker Change #159: Next we have Paros John from HSBC. Please go ahead.

Paros John: Thank you for taking my question James.

Speaker Change #161: James Jane and then Michele.

Parash John: I do, if I may, and one more strategic. In the past decade, we have seen management of Trip was pretty active in terms of M&A, both domestic, as well as international. Past three years have been launched out by COVID.

Speaker Change #161: Finally.

Speaker Change #162: One one more strategic.

Speaker Change #162: Half decade, we have seen at management.

Cindy Wang: Cross-selling from transportation to hotels continued to rise, with hotel-related revenue accounted for 35% to 40% of Trip.com's total revenue in the second quarter. Mobile is also another contributor. Mobile contributed significantly increased, with 65% to 70% of others placed through Trip.com's mobile apps globally. And in the APEC region, Mobile contribute over 75%.

Alex Yao: Cross-selling from transportation to hotels continued to rise, with hotel-related revenue accounted for 35% to 40% of Trip.com's total revenue in the second quarter. Mobile is also another contributor. Mobile contributed significantly increased, with 65% to 70% of others placed through Trip.com's mobile apps globally. And in the APEC region, Mobile contribute over 75%.

Speaker Change #162: In terms of M&A, both domestic as well as international.

Speaker Change #162: Australia was up by Covid.

Cindy Wang: What's the current dynamics or the opportunities in the M&A space you can share?

Speaker Change #163: Glen dynamics are the opportunities in M&A.

Cindy Wang: And the second question is, with a steady state margin for file now and a steady generation of cash flow, how shall we think about the capital return policy going forward?

Speaker Change #162: Sure.

Speaker Change #162: Second question is.

Speaker Change #164: The steady state margin profile now and next generation of cash flow, how should we think about capital return.

Speaker Change #165: Obviously going forward. Thank you.

Speaker Change #164: Yeah.

Speaker Change #164: Okay.

Cindy Wang: Sure. Yeah, we've been actively looking at, always actively looking at all opportunities in the travel industry, in the whole global market. However, I think the sex to all the investment that we made in the past few years, and we already have the most valuable travel aspect in the portfolio in the group.

Speaker Change #164: Sure.

Speaker Change #166: Yeah, we've been actively looking at always are actively looking at all opportunities.

Speaker Change #166: In the travel industry in the whole global market.

Alex Yao: With regard to the Trip.com's margin, as mentioned in the previous quarter, the Trip.com brand will continue to prioritize growth, while closely monitor the ROI in each of the market. But given the ample growth opportunity in the international market, we will continuously invest in this brand. Thank you.

However, I think the.

Speaker Change #166: Thanks to all the investments that we made.

Speaker Change #166: In the past few years and we already have that.

Speaker Change #166: The most valuable travel asset.

Speaker Change #166: Yeah.

Speaker Change #166: In the portfolio in the group. So now the first priority for us is to maximize the synergies among different brand within the group and grow our business mainly through organic growth.

Cindy Wang: So now, the first priority for us is to maximize the synergies among different friends within the group and grow our business, mainly through organic growth. And second, for the shareholder returns.

Speaker Change #166: And second.

Speaker Change #166: A.

Speaker Change #166: Shareholder returns.

Cindy Wang: Yes, at the Trip.com Group, we manage our capital with a long-term ownership mindset, focusing on four key priorities. First, investment for the growth. Our top priority, as we said in the previous questions, given we have ample growth opportunity, especially in the global market. Our top priority now is still building the sustainable competitive advantages and fostering our business growth. And secondly, we will; we practice discipline, cost management to achieve higher long-term returns. And secondly, we prudently manage leverage to maintain strategic flexibility and avoid concentrated maturities. And fourth, the shareholder returns.

Speaker Change #166: Yes, we at the Triple call group, we manage our capital with long term ownership mindset focusing on four key priorities. The first investment for the growth our top priority as we said in the previous questions.

Operator: Next we have, we've shown from UPS. Please go ahead. Thank you.

Jens Leon: Good morning, James James, Indian Michelle. Thank you for taking my question and congratulations on the very solid results. I want to follow up on our international business. So our international business has achieved another quarter of very solid growth. Could a management share if you have observed any increased competition in the Asian markets recently? And how does that impact your business? And also could management elaborate what our Trip.com's key competitors and advantages against local and global peers in overseas markets.

Operator: Good morning, James James, Indian Michelle. Thank you for taking my question and congratulations on the very solid results. I want to follow up on our international business. So our international business has achieved another quarter of very solid growth. Could a management share if you have observed any increased competition in the Asian markets recently? And how does that impact your business? And also could management elaborate what our Trip.com's key competitors and advantages against local and global peers in overseas markets.

Speaker Change #166: Questions.

Speaker Change #166: We have ample growth opportunity, especially in the global market. Our top priority now is still building sustainable competitive advantages and fostering our business grows and secondly.

Speaker Change #167: We will.

Speaker Change #167: We practice disciplined cost management to achieve higher long term returns as Jack said play.

Jens Leon: Thank you. Sure. As I said, given there are ample growth opportunity, especially in the APEC market for all the travel players. Firstly, I think the APEC still is currently the fastest growth region in the whole world. And secondly, the online penetration rate in this region is still relatively low. There is rapid shift from offline to online as well as the mobile platform, which will benefit all the online players in this industry.

Operator: Thank you. Sure. As I said, given there are ample growth opportunity, especially in the APEC market for all the travel players. Firstly, I think the APEC still is currently the fastest growth region in the whole world. And secondly, the online penetration rate in this region is still relatively low. There is rapid shift from offline to online as well as the mobile platform, which will benefit all the online players in this industry.

Jack: We prudently manage leverage to maintain strategic flexibility and avoid concentrated maturities.

Speaker Change #168: And force.

Cindy Wang: We aim to provide consistent returns through either in a way of a different sense or by a tax while manage our cash strategically. Thank you.

The shareholder returns, we aim to provide consistent returns through either in a way of a dividend or buybacks.

Speaker Change #170: While managed our cash strategically thank you.

Cindy Wang: Thank you so much. Thank you. Thank you for all the questions.

Speaker Change #168: Yeah.

Speaker Change #171: Perfect. Thank you so much.

Speaker Change #172: Thank you.

Speaker Change #172: Thank you for the questions. This concludes our Q&A session I will now hand, the conference back to Michele.

Michelle Qi: This concludes our Q&A session. I will now hand the conference back to Michelle. Thank you. Thanks everyone for joining us today. You can find the transcript on the webcast of today's call on Investors.com. We look forward to speaking with you on our third quarter of 2024 earnings call. Thank you, and have a good day. Thank you.

Jens Leon: Trip.com aims to provide one stock travel services, including not only the transportation, but also accommodations, activities, and many more primarily through our mobile apps. This approach offers travelers a unique and convenient experiences that would differentiate Trip.com from other players. We will also continue to focus on the product innovation as well as the service qualities to enhance the user experiences while making a necessary investment to increase our grant recognition in the relevant market.

Operator: Trip.com aims to provide one stock travel services, including not only the transportation, but also accommodations, activities, and many more primarily through our mobile apps. This approach offers travelers a unique and convenient experiences that would differentiate Trip.com from other players. We will also continue to focus on the product innovation as well as the service qualities to enhance the user experiences while making a necessary investment to increase our grant recognition in the relevant market.

Michele: Thank you thanks, everyone for joining us today, you can find the transcript and webcast of today's.

Speaker Change #174: This call on Investor <unk> Com.

Speaker Change #174: We look forward to speaking with you on our third quarter of 2024 earnings call. Thank you and have a good day. Thank you. Thank you.

Operator: This concludes today's conference call. Thank you all for participating.

Speaker Change #175: This concludes today's conference call. Thank you all for participating you may now disconnect.

Operator: You may now disconnect.

Jens Leon: So far, we are very pleased with our strategy and executions, which is regard to the differentiation of the selling point for the Trip.com business. Firstly, we are one-stop shopping centers in the travel industry. And secondly, we grow our business mainly through the mobile channels. And we already see very successful and high percentage contributions from the mobile channels, which will help us to have a strong leverage, especially on the sales marketing expenses in the longer term period. And lastly, but not least, we are aiming to provide the best services in the travel industry to serve the local customers. Thank you. Just a moment for the next question, please.

Operator: So far, we are very pleased with our strategy and executions, which is regard to the differentiation of the selling point for the Trip.com business. Firstly, we are one-stop shopping centers in the travel industry. And secondly, we grow our business mainly through the mobile channels. And we already see very successful and high percentage contributions from the mobile channels, which will help us to have a strong leverage, especially on the sales marketing expenses in the longer term period. And lastly, but not least, we are aiming to provide the best services in the travel industry to serve the local customers. Thank you. Just a moment for the next question, please.

Speaker Change #175: Okay.