The entire industry is still treading water, but Trip.com Group Limited (ASX: TCOM) is poised for a new stage of growth.
Inbound tourism is emerging as the new battleground reshaping the OTA landscape. Official statistics show a significant surge in visa-free foreign arrivals, underscoring a major shift in travel patterns. In this context, while the industry continues to compete for a share of the domestic travel market, the co-founder of Trip.com Group Limited (ASX: TCOM) has set an ambitious target to attract hundreds of millions of international visitors to China over the next five years. This goal is seen within the travel sector as a pivotal opportunity for the company to capture the inbound tourism market and achieve its next major growth phase.
An analysis of the company's strategic moves over the past decade reveals that its inbound tourism strategy is not merely capitalizing on recent visa policy changes. Through years of sustained investment, it has built a comprehensive global service network integrating online platforms, offline offices, and call centers. By 2025, international business contributed a substantial portion of the company's revenue, driving a globalization of its domestic supply chain. This involves equipping suppliers with specialized tools for foreign reception and providing cross-cultural service training. However, company executives acknowledge that enhancing inbound service capabilities is a long-term, systemic challenge that cannot be solved overnight.
Is the Industry Still Unprepared?
A decade ago, key barriers to inbound tourism to China included visa complexity, payment difficulties, internet access, infrastructure gaps, and insufficient international promotion. While many of these foundational issues have been largely addressed today, a new and complex challenge has emerged: a fragmented and inconsistent level of foreigner-friendly service capability across different regions within China.
In major metropolises like Shanghai, Beijing, and Shenzhen, services for independent travelers are generally adequate. However, the situation changes dramatically in third- and fourth-tier cities and central/western regions, where the entire industry chain's ability to serve international visitors remains in its infancy. Issues range from restaurants lacking detailed ingredient and allergen labeling to tourist attractions missing standardized multi-language signage and ticket booking systems that accept foreign passports. Many smaller hotels lack English-speaking staff, creating communication barriers. A particularly significant shortfall is the lack of curated nighttime cultural experiences tailored for foreign tourists.
The underlying cause is that the explosive growth of the domestic tourism market over the past two decades provided little incentive for the industry to invest in upgrading its international service systems. Now, as inbound tourism presents a lucrative new frontier, these systemic weaknesses are being fully exposed.
Another core challenge is insufficient overseas marketing. Compared to established tourism powerhouses like Japan and France, China's investment in international tourism promotion remains modest. Furthermore, national-level campaigns often focus on broad national image, whereas potential tourists seek concrete, actionable information about hotels, transportation, and local experiences—a gap that official channels often fail to fill.
A Decade of Preparation Bears Fruit
The company's international expansion began in earnest several years ago, following the stabilization of the domestic OTA market. With domestic growth plateauing, the focus shifted overseas. A pivotal acquisition and the establishment of a dedicated international business unit marked the start of its globalization push. For years, these efforts received little attention, especially before international travel restrictions were lifted. Few realized that the boom in Chinese outbound travel over the past two decades had, in fact, built the core competency for the company to now operate inbound tourism in reverse.
By 2025, international business had become a major revenue pillar. To support this, the company established a vast global service network, including multiple international call centers staffed by thousands of employees offering support in dozens of languages.
Executives explain that the company has developed a globally differentiated marketing system tailored to the travel habits of users from different countries. It analyzes granular operational metrics like holiday rhythms, travel cycles, and spending preferences to customize offerings. For instance, weekend getaways are promoted to users in one region, while winter sports packages are highlighted for users in another around the New Year.
Critically, the company has elevated the strategic importance of its overseas master brand, allocating significant resources—reportedly surpassing its domestic marketing spend—to promote China as a travel destination globally.
The company's most significant advantage in inbound tourism is the "reverse assets" accumulated from two decades of Chinese outbound travel. The core logic, often overlooked, is the reuse of transportation and supply chain resources. The explosion of Chinese outbound travel led Chinese airlines to establish routes to global cities and allowed the company to build a worldwide inventory of flights and hotels. These resources are inherently bidirectional; the task now is to channel foreign travelers back along these established pathways.
However, this reverse operation requires a complete overhaul of the service system. Travel habits, payment methods, holiday schedules, and cultural preferences vary drastically by country, necessitating localized adaptations of standardized products. The platform now supports dozens of payment methods and currencies and has set up dedicated service counters at major airports to assist foreigners with payment setup.
Leveraging Technology for Personalization
The era of using one standardized product for all global users is over. The company's solution is to use AI and big data to build detailed user profiles for precise matching of demand and supply. It has segmented inbound tourists into several core groups, such as short-haul frequent travelers, social-media-driven visitors, and deep-experience seekers. For each segment, it crafts differentiated product strategies and marketing campaigns, collaborating with influencers, promoting cultural immersion tours, or offering personalized concierge services.
The company also uses data to generate dynamic, real-time destination and product rankings that quickly capture seasonal trends. AI technology is employed to translate domestic travel content into over 30 languages, addressing a key pain point for foreign visitors. Beyond selling standard products like flights and hotels, the company is extending services into the full travel experience, tackling "last-mile" challenges like helping tourists navigate local dining or find language-accessible services.
A Challenging Yet Lucrative Opportunity
Achieving the goal of attracting hundreds of millions of international visitors is no simple task. Currently, China's inbound tourism is highly concentrated in top-tier cities, which account for the vast majority of bookings. While many mid-western and lower-tier cities possess rich tourism resources, their inbound visitor numbers remain minimal.
The company categorizes these potential cities into tiers based on growth rates. First-tier growth cities have begun establishing their profiles, often driven by social media trends. However, second-tier cities commonly face a "resources without services" dilemma, lacking basic international-friendly infrastructure. The current strategy involves creating premium tour circuits to funnel tourists from hub cities to surrounding areas, but this does little to change the fundamental east-west, urban-rural imbalance.
Product homogenization and lack of innovation present another major challenge. Many current inbound products are repackaged versions of existing resources, with few truly original offerings. Even innovative pilot projects, like an immersive dining experience in Shanghai, serve more as demonstrative models than scalable solutions at this stage.
A more fundamental issue is that China's globally competitive technological advantages have not yet been fully translated into core attractions for tourism products. While some hotels are experimenting with service robots and drones, overall industry innovation remains superficial, with product sameness leading to early signs of price competition.
Furthermore, while the company holds a leading position in Asian markets, its penetration in Europe and America remains low. Established global OTA giants with stronger brand influence and user bases in those regions are unlikely to cede the inbound China market easily. Simultaneously, fast-rising local OTA platforms in Southeast Asia, with their deep understanding of regional user needs, pose direct competition.
Finally, the entire industry faces the common challenge of converting inbound tourism scale into substantial profitability. OTA revenues are still heavily reliant on transaction commissions from flights and hotels, with value-added services contributing very little. The operational costs for inbound tourism—including multi-language support, global call centers, and localized marketing—are significantly higher than for domestic travel, representing massive infrastructure investments with long payback periods.
Despite these hurdles, China possesses a uniquely competitive tourism foundation to support the growth of its inbound industry. This advantage is built on four key pillars: unparalleled natural and cultural resources, world-leading infrastructure, exceptional value for money, and the growing global appeal of its technological and cultural fusion. Therefore, the success of inbound tourism extends beyond competition among platforms; it is integral to the broader transformation and upgrading of China's entire tourism industry.
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