In Part 1, I went through the basics of Trip.com. Which also includes Ctrip, Qunar, and Skyscanner.

My conclusions were:

• I like consolidated travel services. Especially with increasing services, experiences, and personalization over time. Including content.
• I like Trip’s regional, and increasingly global, network effects. Which are mostly from hotels.
• I like Trip’s attractive unit economics. It is mostly a digital (not human) operation.
• I like its growth runway. Trip.com can expand to new customer bases internationally. Plus, travel / hospitality spending should rise linearly with rising disposable income in China and Asia.
• Trip isn’t exposed to significant changing customer habits, tech disruption or government regulation.

That’s pretty great. I do have some concerns though.

• OTA’s have low frequency of usage and customer engagement. Customers just don’t buy plane tickets that often. Although Trip’s shift into content and experiences may be solving this (somewhat).
• OTA’s struggle with intermediation by digital giants that are closer to customers. Especially search engines, social networks, and attention-based businesses like TikTok and WeChat.
• Trip is a stand-alone travel service competing with much larger digital giants offering big suites of services (such as Meituan and Alibaba).

That said. Here are my 4 take-aways from my visit.

Note: This is all from public information (annual reports and Trip presentations).

Take-Away 1: Trip.com Has a Good Organic Growth Runway. With Lots of Dimensions.

I like platforms and digital ecosystems where the growth is coming from lots of places. Trip has several services. And a couple of user groups. And lots and lots of geographies. And the revenue is just organically increasing from lots of dimensions. It’s like watching a city grow.

That’s how Trip looks to me right now. Solid growth, mostly in China / Asia. But increasingly in Europe and other markets.

On my visit, they mentioned:

• DAU grew 70% YoY.
  • That is great. But I think a lot of this is a post-Covid return to baseline. But still great.
  • Note: Trip gets significant traffic from their demand partners, including Skyscanner, Google, Asia Miles, TripAdvisor, and Trivago.
• Platinum and diamond members grew 20% yoy. These are their high value members with bigger purchasing power.
• They are #5 in downloads. Not sure about this.
• Trip is now #4 in England (a new market for them). Note: They are low in Japan and Australia.

That’s all interesting.

I asked about where growth was getting traction right now. And I got a list of different activities.

• Small boutique hotels are growing. The foundation of the Trip platform is the interactions between the buyers and 1.7M hotels. To increase interactions and transactions you want to increase accommodations. That means growing boutique hotels and (maybe) private accommodations.
• Train tickets in Europe are a wedge. Trip wants to break into Europe. To do that, you typically find a wedge that gets you consumers for one service. Those new consumers have a good experience and then stay and use other services. And then you bundle. It looks like Trip is targeting train tickets in Europe with this approach. And train services across Europe are fragmented and not terribly convenient (when you try to buy multiple tickets for a longer journey). That appears to be their target.
• Attractions and tours are booming. They are selling tickets to things like artist tours, festivals, and events. This hot category is apparently up 100% yoy.
  • This goes under their “Package Tours and In-Destination Activities” business. They said they had +300,000 In-Destination Activities in 2024. These can be dining, shopping, day tours, attractions, show tickets, etc.
  • For packages, think transport plus hotel plus guides, visa services, insurance, local activities, attraction tickets, or local transport.

Take-Away 2: Trip Is Focusing on Inspirational Content Before Booking.

As mentioned, Trip added content sharing in 2018. This potentially addresses their biggest weakness, which is low frequency of customer usage. Plus, travel videos are a great category for content. They get tons of views.

But I was thinking about travel content in terms of engagement outside of their booked trips. Just something fun to watch, like YouTube and TikTok. Or as a mechanism to keep customers engaged while on their trip.

However, Trip said they were focused on content that customers consume before booking their travel. To help people get inspired. And to make their plans. That is really smart. It reminds me of Pinterest, which has a cool approach to getting attention and engagement.

On Pinterest, you create project folders. Like for redecorating a kitchen. Or planning a dinner or party. And then you hunt around the content (both UGC and PGC) and tag photos and put them in specific project folders. You get inspired. You get ideas. Before you launch the project. It’s like a bulletin board for your projects. And this happens long before you actually redecorate your kitchen.

That’s a great approach for Trip.com. You can create folders for future travel. You scan through various trips, hotels, activities, etc. And save them. I do this frequently do. I often scroll through YouTube videos about various locations. Get inspired. Maybe save ideas into a folder. And then maybe take a trip there in a year or so. For example, I’ve been watching Kazakhstan travel videos recently.

Anyways, I thought focusing the travel content on inspiration before booking was really interesting. Although, it’s not clear to me how much Trip’s move into content is actually shifting their DAU and MAU numbers.

Sub-Point: Deals and Promotions Are the Content That Really Matters.

Trip spends 20% of revenue on marketing (which includes content). And my guess is that deals and promotions are the largest lever for increasing users and revenue.

They do UGC, PGC and pUGC (professional user generated content) on their own app. As well as within the Trip accounts on social media sites. So that’s the activity I’ve been keeping an eye on. This includes:

• The big annual sales days (3/3 and 11/11).
• End of month sales (Pay Day).
• End of week sales (Weekly Super Sale)

Outside of this, Trip breaks its marketing into a couple of categories. This is from the Annual Report.

• Brand advertising
  • These are their travel ads for awareness. You’re going to see big Trip.com ads in airports across Asia in particular. And in bus and train stations. You’ll also see things like ads with celebrities. Watch for this more and more in Europe.
• Performance advertising
  • Search engines. This is a big concern. Google has a real presence in hotels and airline tickets. They are a big intermediary.
  • Also, watch for pr activities and keyword purchase.
• Cross-marketing
  • They coordinate with airlines, hotels, banks, telco, and ecommerce companies.
• Rewards program
  • Their Trip coins are interesting. I’m trying to get more information about this.
• Entertainment marketing
  • They appear to increasingly associate with music contests and other events. This increases awareness and likeability.

Take-Away 3: Trip’s Secret Weapon in Tech is Travel Data

Trip has lots and lots of travel data. Decades worth. And proprietary data at scale is rapidly becoming the key differentiator in GenAI and intelligence capabilities.

It’s worth looking at a breakdown of their tech activities (from annual reports). You can see where they are going.

• Customer use cases include:
  • Personalized recommendations
  • Streamlined user experiences
  • Enhanced user engagement
  • Sharing and viewing of UGC
• Ecosystem partner use cases include:
  • Demand prediction
  • Improved operating efficiency.
    • Ebooking system for hotels and accommodations
    • Pricing checks for airlines
  • Proprietary search and transaction engine
    • Search, recommendation, matching.

The KPIs are:

• Attract and retain users
• Improve experience

Which brings up my last point. GenAI

Take-Away 4: GenAI is an Upgrade But Not a Game Changer for OTAs (Yet)

Trip’s GenAI strategy looks pretty similar to what I have seen at most companies right now.

1. Experiment with putting GenAI into products and services. See if there is a 10x improvement.
   • For Trip, this means looking at services for both customers and ecosystem partners.
2. Adopt productivity tools internally.
3. Is possible, launch new AI services.

For Trip, that means:

• Trip Genie. Basically, putting LLM into products.
• Enabling customers to create itineraries.
• Planning tools.
• Start from search or chat
• Using LLM for Marketing and CSR

Within this, the use case that got my attention was their virtual tour assistant. That would be a new AI service that would accompany travelers during their trips. That is potentially interesting.

***

Ok. That’s it for Trip.com for now. I hope this is helpful. I’m trying to go back for a formal interview in the next couple of months.

My main areas of interest are:

• Personalization of content and deals / promotions. This includes:
  • Content feeds (and search tools).
  • Selections and recommendations – for destinations, themed activities, restaurant guides. And special deals.
  • Live streams – for their official channel and by PGC / pUGC (travel bloggers, KOLs, ecosystem partners)
  • Reviews and ratings
  • Feedback between users experience and offerings
• Membership tiers and rewards

Cheers, Jeff

• Why I Like Trip.com (1 of 2) (Tech Strategy)

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Related articles:

• GenAI Playbook (Step 3): How to Build Barriers to Entry with Intelligence Capabilities (9 of 10) (Tech Strategy)
• Why ChatGPT and Generative AI Are a Mortal Threat to Disney, Netflix and Most Hollywood Studios (Tech Strategy – Podcast 150)

From the Concept Library, concepts for this article are:4

• n/a

From the Company Library, companies for this article are:

• Trip.com / Ctrip / Qunar / Skyscanner

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I write, speak and consult about how to win (and not lose) in digital strategy and transformation.

I am the founder of TechMoat Consulting, a boutique consulting firm that helps retailers, brands, and technology companies exploit digital change to grow faster, innovate better and build digital moats. Get in touch here.

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This content (articles, podcasts, website info) is not investment, legal or tax advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. This is not investment advice. Investing is risky. Do your own research.