Trip.com is quietly navigating through the storm.

According to sources, during the combined Mid-Autumn Festival and National Day holiday period, Trip.com's long-haul travel orders increased their overall share by 3%, while cross-provincial tour orders rose 45% year-on-year. Among these, chartered car tours emerged as a new hotspot, with Beijing orders surging 75% year-on-year, and orders to scenic destinations such as Aba in Sichuan doubling. Meanwhile, county-level tourism and cross-border provincial tours were booming, with Zhaotong (at the junction of Yunnan, Guizhou, and Sichuan), Hezhou (at the junction of Guangxi, Hunan, and Guangdong), and Ganzhou (at the junction of Jiangxi, Guangdong, Hunan, and Fujian) seeing order growth rates of 95%, 88%, and 70% respectively.

Notably, inbound tourism, which Trip.com views as its second growth curve, performed even more strongly. During the double holiday period, one-day tour order volumes surged nearly 300% year-on-year, ticket orders grew over 220%, and train ticket orders increased more than 170%. Among these, the Asian market contributed over 60% of orders, with Russia growing over 90% year-on-year, the UK over 60%, and Malaysia and Singapore growing 40%-50%. Shanghai, Beijing, Guangzhou, Shenzhen, and Chengdu were the preferred destinations for inbound tourists.

This tangible recovery appears to be overshadowing the shadow of antitrust penalties. On the eve of the National Day holiday, Trip.com released its Q2 2026 financial report. The full 5.179 billion yuan antitrust fine was recorded in that quarter, directly pushing the quarterly net loss to -2.4 billion yuan, with first-half net profit plummeting 99.55% year-on-year.

In our view, the landing of Trip.com's penalty in July and the industry administrative guidance meeting in September, which involved Meituan, Douyin, Tongcheng, Fliggy, and others, formed a resonance, marking a shift in online hotel booking industry regulation from case-by-case enforcement to systemic governance, and further clarifying the competitive boundaries in the online hotel booking sector. In particular, after the regulatory hammer cracked Trip.com's core business model that supported high profits, can the new narrative of globalization + AI truly support Trip.com's second phase of growth?

The Collapse of a System Built on Easy Profits

Perhaps the public's understanding of Trip.com's monopoly still停留在 the "choose one of two" concept. Details disclosed in the regulatory penalty decision reveal that Trip.com built a system to control hotel pricing power and channel selection rights through traffic allocation. The industry-criticized "special card - gold card - no card" tiered cooperation system was quite covert: exclusive requirements were never written into paper contracts, relying entirely on verbal negotiations by business managers, with the core bargaining chip being the platform's traffic favoritism.

Specifically, this mechanism was designed in three stages: Special card hotels could receive the highest priority exposure and traffic support, at the cost of signing a total distribution agreement, providing no less than 15% reserved rooms, bearing 12%-15% commissions, and their core room inventory could not be listed on competitor platforms. Gold card hotels had to promise the lowest price across the entire network, with selling prices at least 5% lower than other platforms, corresponding to a 10%-12% commission rate. Non-card merchants received no traffic support but still had to ensure that prices on Trip.com were not higher than any other channel.

In addition, regulatory documents also mentioned "price adjustment assistant," "listing pass," and a backend price comparison system: the platform would compare hotel public pricing across all channels in real time. Once it found that Trip.com's price was higher, it could directly force a reduction through tools, supplemented by traffic restrictions, deduction of order reserves, and other punitive measures to ensure the rigid implementation of the lowest price.

Therefore, the regulatory penalty was intended to break through this tiered control system and dismantle the competitive barriers built by price controls. In March of this year, Trip.com took the "price adjustment assistant" offline; by the end of July, the special card and gold card cooperation systems were fully terminated, and existing merchants gradually migrated to a new cooperation framework. According to sources, Trip.com's hotel ranking algorithm has already been adjusted, with factors such as consumer feedback, service quality, product competitiveness, and historical conversion rates receiving higher weight. The core of the new model is to return power to merchants, meaning hotels can independently choose the number of cooperation platforms, independently decide pricing strategies for each channel, and fully return inventory and pricing power to operators.

For Trip.com, this amounts to declaring the end of an era where exclusive agreements locked in resources. Industry competition returns to its essential logic: whoever can bring more orders to merchants and provide better service to users will win cooperation. In this regard, Trip.com CFO Wang Xiaofan admitted that during the process of hotel partners migrating to the new operating model and market practices readjusting, domestic business will inevitably experience "certain fluctuations."

Multiple hotel industry practitioners told us that hotels no longer need to forcibly abandon other channels to preserve traffic favoritism from a single platform; nor do they need to passively reduce prices or participate in involuntary promotions when platform rules change. The autonomy of business decisions is truly increasing. It should be noted that in the past, hotel operators spent a great deal of energy studying the ranking rules and activity requirements of a single platform, while core actions such as product refinement and membership operations were marginalized. Now, hotels' operational focus is returning to service itself, and the long-diluted independent operational capabilities will once again become the core competitiveness of hotels.

This also marks that the relationship between the hotel and travel industry and OTA platforms is shifting from traffic allocation to capability symbiosis: what platforms output is no longer just orders, but a complete set of digital operational capabilities including revenue management, dynamic pricing, and membership operations. Moreover, after the lifting of exclusive restrictions, multi-platform operation by hotels will become the industry norm. Meituan can further penetrate the high-star hotel market, Douyin connects content marketing to transaction closure, and various platforms continue to increase investment, making market competition even more intense. The shift in OTA competition focus from resource locking to service and efficiency is precisely the original intent of regulatory governance.

However, the reshuffling of the landscape only changes the redistribution of market share. The essence of OTA is still a trust business. From flight refunds and changes to hotel coordination, in high-ticket, long-chain travel consumption, users still tend to choose platforms with higher service certainty.

A Fractured Fundamental Picture

The market generally believes that the 5.179 billion yuan fine is a one-time book impact, and the extent of its impact on Trip.com's main business remains to be seen. But the negative effects have already appeared in the Q2 financial report. During the period, Trip.com's total revenue was 15.66 billion yuan, a slight increase of 6% year-on-year and a decrease of 3% quarter-on-quarter, with growth significantly slowing compared to the previous quarter.

By business segment, accommodation reservation revenue, the first pillar, was 6.576 billion yuan, up 6% from 6.225 billion yuan in the same period last year. This included a 122 million yuan revenue offset from rectification (refund of merchant order reserves). Excluding this, the actual growth rate was about 8%. It is worth noting that this 8% growth includes the fast-growing international business. If the domestic accommodation segment is separated out, the growth rate would be even lower.

Second, transportation ticketing revenue, which has traffic gateway value, was 5.35 billion yuan, down 1% year-on-year and down 12% quarter-on-quarter, mainly affected by factors such as high oil prices and geopolitical conflicts suppressing air ticket demand. At the same time, rigid growth on the expense side continues to squeeze profit margins: Q2 sales and marketing expenses were 3.8 billion yuan, up 15% year-on-year, significantly higher than the 6% revenue growth rate. Management attributed this to global expansion, but the increase in marketing investment forced by intensifying domestic competition cannot be ignored.

In our view, the value of Trip.com's traffic lies in the rigid demand for travel. Users first buy air tickets and train tickets, then convert to hotel and vacation bookings. This is its commercial closed loop that has operated for many years. Now that growth at the entrance is declining or even negative, pressure will inevitably gradually transmit to downstream businesses, creating cracks in the entire traffic foundation.

Even after excluding the 5.2 billion yuan fine, Q2 net profit was approximately 2.7 billion yuan, which appears to still be in a profitable range, but it has already declined year-on-year. Adjusted EBITDA was 4.565 billion yuan, a decrease of approximately 300 million yuan year-on-year. At the same time, changes in commission rates have also become a focus of market attention. Third-party research shows that after rectification, the comprehensive commission rate for domestic hotels has been reduced to some extent. CITIC Securities estimates that for every 1% reduction in commission rate, Trip.com's adjusted net profit for 2026 will be affected by approximately 10%.

In light of this, the real major test is actually in the third quarter. At the end of July, the new model was fully switched. Under the new rules, changes in revenue growth, commission rates, and profit margins will all truly land. Before that, any conclusion about Trip.com's fundamentals is premature.

So, is Trip.com's moat still there? Objectively speaking, the brand awareness accumulated over more than 20 years, user travel habits, a massive supply chain system, and mature fulfillment and after-sales capabilities are all real competitiveness. The vast majority of hotels will still regard Trip.com as their largest online order source and will not actively abandon this channel because of a single fine.

However, the thickness of the moat has been greatly reduced. Trip.com must step out of its comfort zone of easy profits and re-adapt to the rhythm of earning hard money. Fortunately, Trip.com still has a sufficient cash safety cushion. As of the end of June, the company's cash and cash equivalents, short-term investments, and other items totaled approximately 100.5 billion yuan, with ample capital reserves. Moreover, continuous share buybacks since 2025 have supported the stock price, and the pace of buybacks accelerated in the first two quarters of this year.

In summary, the 5.2 billion yuan fine really hurt Trip.com, and it also drags along declining commission rates, rising marketing expenses, and weak domestic demand. Trip.com will need time to digest these pressures.

Can Inbound Tourism and AI Drive a Second Phase of Growth?

Facing the transformation pains of its domestic business, Trip.com told two growth stories on its earnings call: inbound tourism and AI.

First, inbound tourism. This year, visa-free policies have been intensively implemented, and Trip.com was among the first to benefit from this wave. In Q1 2026, visa-free foreign arrivals accounted for 77.9%. In Q2, the inbound tourism business continued to maintain high double-digit year-on-year growth, with 118,000 hotels and over 3,600 scenic spots receiving inbound orders. Growth in lower-tier markets was particularly significant: in the first half of the year, the number of hotels in third-, fourth-, and fifth-tier cities receiving inbound orders increased by 38.3%, 46.2%, and 47.9% year-on-year respectively, all higher than the overall growth rate of 33.6% for platform hotel merchants. During the Mid-Autumn Festival and National Day holiday, inbound one-day tour orders surged nearly 300% year-on-year, ticket orders grew over 220%, and train ticket orders increased over 170%, making it a veritable second growth curve for Trip.com.

However, the industry pain points of inbound tourism are precisely Trip.com's growth bottlenecks. First, foreign-related services in first-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen basically meet standards, but when extending to third- and fourth-tier cities and the central and western regions, hotels generally lack foreign language service staff, scenic spots lack standardized multilingual signage and explanations, and even basic reception needs are difficult to meet. Trip.com tries to attract traffic by radiating from leading cities to surrounding areas, but the coverage is very limited and cannot fundamentally change the inbound tourism pattern of "strong east, weak west; strong cities, weak countryside."

Second, in international tourism cities such as London and New York, performance revenue generally accounts for more than 15% of total tourism revenue. In contrast, most domestic outdoor live performances are presented only in Chinese, lacking full English explanations and subtitles, and there are very few nighttime consumption scenarios for foreign tourists. Liang Jianzhang also admitted that domestic daytime tourism activities are already relatively rich, but there is still huge room for improvement in foreign-related services for nighttime performances, dining, and leisure scenarios.

Third, the Tourism Authority of Thailand has an average annual special publicity budget of 200 million US dollars, while China's official tourism publicity budget is still at the tens of millions of US dollars level. Although Trip.com has elevated Trip.com's brand investment to a strategic level, even exceeding domestic market investment, it still faces a magnitude gap compared with the tens of billions of dollars in marketing investment by European and American giants such as Booking and Expedia.

Of course, the core issue ultimately comes down to monetization efficiency. The operating costs of inbound tourism are much higher than domestic tourism. Multilingual service systems, global call centers, and localized marketing all require huge infrastructure investment, and the return on investment cycle is long. Over the past many years, Trip.com has continued to invest resources in overseas customer acquisition and domestic supply reception capacity: on the supply side, it has promoted multilingual adaptation of hotels and merchant training, worked with nearly 300 scenic spots to deploy multilingual ticket sales and collection equipment, and connected the entire chain of booking, payment, and ticket collection for foreign tourists. On the product side, it encourages destinations to develop cultural experience, performance, and other vacation products, helping more merchants connect to the international tourist consumption chain. In terms of inbound tourism brand marketing, it invited Jackie Chan to serve as a global ambassador for Chinese tourism promotion, introducing Chinese destinations to the international market. These investments may not quickly translate into quarterly profits, but they are the foundation for long-term growth.

Next, international business. In Q2, Trip.com revenue grew more than 50% year-on-year, with Asia-Pacific as the core growth engine, and Europe and the Americas achieving faster growth from a low base. Management said brand profit margins have improved significantly, meaning the unit economics of the international business are improving, but when the international business can achieve scaled profitability, the financial report did not disclose specific data. Moreover, in markets such as Southeast Asia and Europe, Trip.com also has to face fierce competition from local platforms such as Agoda and AirAsia Travel.

AI is another card Trip.com has played. Trip.com says it is applying AI across all scenarios including travel inspiration, search, itinerary planning, multilingual services, customer service, and merchant operations. According to sources, orders assisted by TripGenie grew about 400% year-on-year, and nearly 60% of interactions are already related to bookings, covering hotels, flights, and attractions. The intelligent shopping guide system handles 80% of pre-sales consultation work, significantly reducing service costs and improving response efficiency.

However, AI is becoming a foundational capability in the OTA industry. Fliggy launched "Fliggy Bangbang," Tongcheng integrated "Chengxin AI" with DeepSeek, and even Doubao launched full-scenario travel services before the National Day holiday. Users can complete air ticket booking, train ticket purchase, ride-hailing, and route navigation through Doubao in a one-stop manner. For example, users can say "book me a flight from Beijing to Shanghai tomorrow" or "call a car to Capital Airport," and Doubao can automatically identify the intent and complete the corresponding service call without repeatedly switching between multiple apps.

In summary, no one can predict in advance how the market landscape will ultimately be reshuffled. What is certain is that the old era of easy profits has ended, and Trip.com needs to go out and compete for territory again.