Operator: Good day, thank you for standing by. Welcome to Trip.com Group 2026 quarter one earnings conference call. I would now like to hand the call over to Michelle Qi, Senior IR Director.
Michelle Qi: Thank you. Good morning, welcome to Trip.com Group's first quarter of 2026 earnings conference call. Joining me today are Mr. James Liang, Executive Chairman of the Board, Ms. Jane Sun, Chief Executive Officer, and Ms. Cindy Wang, Chief Financial Officer. During this call, we will discuss our future outlook and performance, which are forward-looking statements made under the Safe Harbor Provisions of the U.S. Private Securities Litigation Reform Act of 1995. Trip.com Group does not undertake any obligation to update any forward-looking statements except as required under applicable law. James, Jane, and Cindy will share our strategy and business updates, operating highlights, and financial performance for the first quarter of 2026, as well as outlook for the second quarter of 2026. With that, I will turn the call over to James.
James Liang: Thank you, Michelle, and thanks everyone for joining us today. We started the year with strong momentum. Travel continues to drive consumption, create jobs, and support broader industry growth. In this context, we are focused on unlocking the full potential of inbound travel as a key engine for local economies. At the core of our approach is a simple idea: turning inbound travel into real, on-the-ground opportunities for local partners. We have set an ambitious goal to serve 200 million inbound travelers over the next five years. This reflects both the scale of the opportunity and the potential to connect local destinations with global demand. As policies become more favorable, the inbound travel market is opening like never before. Last year, Trip.com welcomed 20 million inbound travelers. In Q1 2026 alone, we have already served approximately 7 million travelers, laying a strong foundation for long-term growth. Our role is to connect the ecosystem. We help partners understand international traveler expectations, translate that knowledge into products and services that capture incremental demand, and raise awareness positioning China as an accessible and attractive destination through targeted marketing initiatives. These include offline promotions in key global transit hubs, joint campaigns with airline partners, and collaborations with international content creators. During the quarter, we engaged over 110,000 local partners in inbound-related services. For many, this was their first opportunity to connect with international travelers. We also collaborate with local partners across 29 high-potential destinations to design and deliver integrated travel experiences, connecting attractions, accommodations, and local services into seamless itineraries. Technology, and AI in particular, is becoming an increasingly important enabler across the travel ecosystem. We are building and deploying our own suite of AI agents to support both travelers and supply partners. These capabilities already help suppliers overcome language barriers, enhance content quality, and improve service responsiveness. Automated content tools enable suppliers to generate richer materials, including video, helping them showcase their offerings to a global audience. In customer service, AI-driven systems deliver faster, more consistent responses. More broadly, AI is transforming how travel products are discovered, evaluated, and purchased. We are actively opening our platform to third-party AI agents through Skills, MCP interfaces, and other AI-native integrations. Our goal is not only to be the go-to app for travelers, but also the trusted infrastructure for AI agents. Central to this strategy is the modularization of our proprietary travel capabilities — packaging our travel data, verified inventory, real-time pricing, and reliable transaction infrastructure into AI-ready services that can be integrated directly into agent workflows. We believe AI agents will emerge as a complementary gateway to travel demand. Our objective is simple: whenever a traveler turns to an AI assistant for help, our data, inventory, transaction capabilities, and service infrastructure are ready to power and complete the journey. With that, I will turn the call over to Jane.
Jane Sun: Thank you, James. Good morning, everyone. For the first quarter of 2026, our core OTA business recorded gross bookings of approximately RMB 300 billion. Group net revenue totaled RMB 16.2 billion. Inbound travel continued to grow strongly during the quarter, with gross bookings increasing by approximately 90% year-on-year. Asia remained our largest source of inbound travelers. Visitors from Europe and the U.S. also grew rapidly and now account for roughly 25% of total inbound traffic. Since the start of the year, inbound visitors have stayed an average of 5.1 days, up 11% year-on-year, reflecting deeper engagement and a growing preference for more immersive travel experiences. Inbound travel is evolving beyond standardized sightseeing toward more content-rich and culture-focused experiences. During the quarter, around 14,000 partners received their first-ever overseas orders through the Trip.com platform. On the international front, global travel demand remained resilient, particularly across the APAC region. During the quarter, gross bookings on our international OTA platform increased by approximately 65% year-over-year. As traveler behavior evolves, demand is increasingly extending beyond flights and hotels toward more integrated mobility experiences. We continue to leverage our transportation expertise to broaden our offerings across airport express, airport transfers, bus services, and other connected mobility solutions. Outbound travel remained resilient during the quarter, with travelers continuing to demonstrate a high degree of flexibility in their destination choices. Although regional geopolitical developments created some fluctuations across certain travel corridors, the overall business impact remained limited as travelers actively adjusted their itineraries and shifted demand toward alternative destinations. We observed outbound demand increasingly redirecting toward neighboring destinations such as Southeast Asia. Domestically, travel continued to benefit from strong seasonal demand, particularly around the Spring Festival holiday period. Local cultural and tourism vouchers continued to support consumption across multiple regions. Short-distance travel maintained strong momentum, reflecting growing demand for high-quality and easily accessible experiences closer to home. Our silver generation initiatives are also gaining traction. In Q1, hotel gross bookings for Old Friends Club increased by over 100% year-over-year. To better serve this segment, we are combining offline and digital capabilities — dedicated travel services through our offline flagship stores, as well as AI-powered conversational tools to lower the barriers to travel planning and make the overall booking experience more accessible for senior travelers. Entertainment-driven travel is rapidly emerging as one of the most dynamic growth opportunities. In Q1 2026, gross bookings from entertainment-driven travel increased by 74% year-on-year. Global events including sports, concerts, and cultural festivals are proving to be powerful catalysts for travel activity. Sporting events such as the Shanghai F1 not only stimulate the local economy but also attract inbound visitors from across the world. Music concerts similarly draw cross-regional travelers. Our efforts this quarter focused on three key areas. First, we continue to strengthen global demand connectivity — our Trip community connects more than 500,000 travel brands and suppliers with over 10,000 qualified creators, enabling localized, user-driven content. Our Global KOL China Exploration Program has brought together creators from Argentina, South Korea, Japan, Thailand, Singapore, Kazakhstan, and many other markets. Second, we continue to upgrade travel infrastructure and service capabilities. Our globally accessible product offerings cover approximately 450,000 hotels and 180,000 local attraction products. Third, by transforming traditional large group tours into smaller, more customized offerings, we are helping unlock new economic activity and supporting 50,000 travel-related jobs. Domestic small group travel orders on our platform have increased by 27% year-on-year, with 55% higher per capita spending and 11% longer stays compared to large group tours. With that, I will now turn the call over to Cindy.
Cindy Wang: Thanks, Jane. Good morning, everyone. For the first quarter of 2026, Trip.com Group reported total net revenues of RMB 16.2 billion, representing a 17% increase from the same period last year. Accommodation reservation revenue was RMB 6.5 billion, a 17% increase year-over-year, mainly attributable to steady momentum in international hotel bookings. Transportation ticketing revenue was RMB 6.1 billion, a 12% increase year-over-year, supported by global expansion and strong demand for international air and ground transportation. Package tour revenue was RMB 1.1 billion, a 19% increase year-over-year, mainly driven by expansion of international offerings and strong demand for small and customized tours. Corporate travel revenue was RMB 690 million, a 20% increase year-over-year, reflecting continued penetration of our managed corporate travel services. Excluding share-based compensation charges, adjusted product development expenses increased by 12% year-over-year. Adjusted G&A expenses increased by 5% year-over-year. Adjusted sales and marketing expenses increased by 24% year-over-year, mainly driven by heightened marketing efforts aligned with our business expansion. Adjusted EBITDA was RMB 4.8 billion, compared with RMB 4.2 billion in the same period last year. Diluted earnings per ordinary share and per ADS were RMB 3.67 or $0.53. Non-GAAP diluted earnings per ordinary share and per ADS were RMB 5.73 or $0.83. As of March 31st, 2026, the balance of cash and cash equivalents, restricted cash, short-term investment, held-to-maturity time deposit, and financial products was RMB 104.0 billion or $15.1 billion. Looking into the second quarter, we expect net revenue growth of approximately 3% to 8% year-over-year. Compared with the exceptionally strong growth environment in Q1, growth trends have moderated during the quarter. Our outlook reflects two primary factors. First, rising energy prices and recent geopolitical tensions have led to higher airfares, tighter airline capacity, and disruptions on certain international routes, particularly long-haul travel, contributing to a moderation in air travel demand and changes in booking patterns. Second, our guidance incorporates the near-term impact of upgrading our operational practices to align with updated industry standards and compliance frameworks. With that, operator, please open the line for questions.
Operator: Our first question comes from Simon Cheung of Goldman Sachs.
Simon Cheung: Could you share more on your long-term positioning and investment plans on the AI ecosystem you're building, and how Trip.com will leverage its vertical strength to stay competitive as AI agents increasingly shape how customers discover and plan travel?
James Liang: We believe AI will significantly improve how travelers discover, plan, and book travel, but it will not replace specialized travel platforms. Travel is a high-consequence category where value lies not just in recommendations, but in reliable execution — real-time inventory, deep supply connectivity, and robust global service infrastructure that we have built over decades. As travel AI shifts from information to fulfillment, it increasingly highlights our competitive advantages. Our strategy has two pillars. First, we are strengthening our own AI capabilities. We recently integrated our core search function with our AI assistant, enabling seamless natural language and voice-based search. Travelers can now submit highly complex requests involving multiple variables and receive instantly filtered bookable results, simplifying decision-making and reducing friction. We are also leveraging AI across the company to drive efficiency, from improving productivity in corporate functions to expanding automation in customer service. Second, we are connecting into broader AI ecosystems through APIs, MCPs, and agent frameworks, exploring collaborations with leading platforms globally to enable integrated travel planning and fulfillment within next-generation AI experiences. By embedding our robust supply into the world's leading AI platforms, we can tap into emerging AI-driven demand channels and capture new overseas demand more efficiently. Our goal is simple: wherever travel planning starts, Trip.com should be well-positioned to participate and deliver trusted execution.
Operator: Our next question comes from Yang Liu from Morgan Stanley.
Yang Liu: Trip.com aims to attract 200 million inbound travelers over the next five years. What are the key initiatives to drive this growth?
Jane Sun: Our nation's policy for inbound has opened up very favorably. More than 80 countries have received visa-free treatment. We also allow free in-transit treatment for stays within the country of up to 10 days. Alipay and WeChat Pay have enabled foreign credit cards to be used in China, which is a major improvement. Our team has worked very hard to welcome people from all over the world. First, we invited more than 1,000 KOLs to come and see the country, shoot videos, and post their experiences on social media. Second, when travelers call Trip.com's call center, we offer support in more than 30 languages, 24 hours a day, 7 days a week. Third, we connected with more than 110,000 suppliers, including 14,000 who were first-time recipients of inbound customers, which has improved hotels, attractions, and service levels for global customers. Lastly, we offer a one-stop shopping platform covering hotels, flights, attractions, and transportation, making it easy for newcomers who have never visited China before. As a result, we hosted about 20 million visitors last year and are working toward 200 million in the next five years.
Operator: Our next question comes from Thomas Chong of Jefferies.
Thomas Chong: How would you characterize the recent competitive landscape in the China OTA market, including the impact of regulatory developments and AI-driven platforms?
Jane Sun: The domestic OTA market remains structurally rational. Competition continues to center on quality of service, supply coverage, and user experience rather than aggressive price wars. On compliance, we see a clear and consistent focus on platform governance, transparent pricing, and fair competition. We fully support this direction and have proactively strengthened our compliance and operational discipline. While this has caused some short-term pressure on our metrics, we see this as an ordinary normalization in the long term. On AI platforms — they are reshaping how users discover and plan trips, with more users turning to conversational tools to brainstorm and plan their travel. We embrace these new interactions. However, travel remains a complex and service-intensive transaction where supply integration, fulfillment reliability, and after-sales service are critical, and those remain our core strengths. We are responding through disciplined execution, strengthening compliance, embedding AI into our products, and improving efficiency and service quality. These dynamics ultimately reinforce the importance of trusted large-scale OTAs whose value lies in broad supply, reliable fulfillment, and excellent end-to-end service.
Operator: Our next question comes from Wei Fang from Mizuho.
Wei Fang: Could you provide some updates on the ongoing regulatory review and how you are addressing the potential impact on near-term performance and mid- to longer-term operating outlook?
Cindy Wang: We are fully cooperating with the relevant authorities and maintaining constructive communication throughout the process. As the matter remains ongoing, it would be premature to speculate on the potential timeline or outcome at this stage. Over the past several months, we have proactively reviewed and refined certain business practices to further strengthen our internal compliance and governance framework. These adjustments may introduce some near-term impacts on our business and financial performance, but we believe they are constructive for the longer-term, healthy development of both our business and the broader travel industry. We recognize that regulatory frameworks for large platform companies continue to evolve globally and believe a transparent, fair, and well-regulated market environment will ultimately benefit consumers, support healthy competition, and enhance longer-term industry sustainability.
Operator: Our next question comes from Joyce Ju of Bank of America.
Joyce Ju: I noticed the recent regulatory announcement regarding train ticketing practices. Given that value-added services are closely linked to monetization of rail ticketing, how should we understand the potential financial impact?
Cindy Wang: We fully support the latest regulatory guidance about train ticketing practices and are working closely with the relevant authorities. Consumer trust and user experience remain central to our platform. From a strategic perspective, train ticketing remains an important user acquisition and engagement channel. Our focus is not only on ticket fulfillment but enabling users to complete the full travel journey, including transportation, accommodation, and destination services. From a financial standpoint, our business has become increasingly diversified over time, with continued growth across accommodation, international travel, and other segments. Consequently, domestic train ticketing's direct contribution to overall revenue and earnings has meaningfully declined over the years. As the industry adjusts to the new requirements, optimization of certain rail-related products and value-added services may create some near-term headwinds. These impacts are already reflected in our current expectations and are partially incorporated into our Q2 outlook. Over the longer term, our diversified business mix, robust cross-selling capabilities, ongoing efficiency gains, and disciplined cost management will support sustainable growth and a resilient profitability profile.
Operator: Our next question comes from Wei Xiong of UBS.
Wei Xiong: Could you please provide an update on recent booking trends and elaborate on the second quarter guidance? What are we seeing for the summer travel season, and how should we think about demand trends into the second half?
Cindy Wang: Travel demand got off to a solid start in 2026, and we delivered very strong performance across our business segments. For the second quarter, we expect net revenue growth of approximately 3% to 8% year-over-year. Growth has moderated from the exceptionally strong Q1 environment, reflecting a combination of macro and operational factors. For our China business, air travel demand has softened versus Q1 as higher airfares are influencing travel behaviors. Consumers are increasingly optimizing destinations, trip lengths, and transportation choices. Domestic hotel ADR has turned modestly positive year-over-year, reflecting resilient long-term demand and a more balanced supply-demand environment. Our Q2 guidance also includes the near-term impact of proactive product and compliance-related adjustments across certain business lines. We view these as constructive steps that strengthen our long-term platform quality, user experience, and sustainable growth. On our international business, higher airfares have reduced demand for certain long-haul routes, though part of the volume impact is offset by higher ticketing prices. International accommodation demand remains healthy, supported in part by local demand and short-haul travel flows. Inbound travel continues to be one of our strongest segments, driven by Asia source markets, favorable visa policy, improved connectivity, and growing recognition of China as a destination. Looking into the second half, visibility remains limited given the short booking window. We maintain a prudent outlook, expecting many current dynamics to persist with periodic fluctuations across specific markets and segments. We are balancing near-term operational discipline with multi-year strategic investment to stay resilient today and stronger tomorrow.
Operator: Our next question comes from Brian Gong of Citi.
Brian Gong: Could you share the key operational highlights of your international business and how you are thinking about the outlook for overseas markets in 2026?
Cindy Wang: Our international business continued to deliver very strong growth in the first quarter. Gross bookings of our international OTA platform increased by approximately 65% year-over-year, with inbound travel growing approximately 90% year-over-year. This growth was underpinned by robust broad-based demand across key source markets in APAC, Europe, and the U.S. From an operational perspective, mobile bookings through our app reached a new record high, reflecting success in strengthening direct traffic and user engagement. APAC remains the cornerstone of our international business and continues to offer significant longer-term growth opportunities. Year to date, Trip.com has significantly improved its margin profile. The compounding effects of expanding direct traffic, rising global brand awareness, and ongoing product innovations collectively support a structurally stronger profitability profile for our international segment. In 2026, our focus is to further expand across APAC, enhance user experience through AI and product innovation, and continue strengthening our service infrastructure, while maintaining a disciplined ROI-driven approach in other international markets. We will continue to deliver a reliable travel experience, strengthen our market position, and build a sustainable and profitable international business over the longer term.
Operator: That concludes the Q&A session today. I would now like to hand the call back to Michelle for closing remarks.
Michelle Qi: Thank you. Thanks everyone for joining us today. You can find the transcript and webcast of today's call on investors.trip.com. We look forward to speaking with you on our second quarter of 2026 earnings call. Thank you and have a good day.