Is Ctrip Oversold on Q3 Earnings?
$Trip.com Group Limited(TCOM)$ Driven by the quarter, revenue reached 13.8 billion yuan, 1.89 billion US dollars, a year-on-year increase of 95.2%, exceeding expectations by 20 million US dollars. EPS was $0.94, exceeding expectations of $0.37.
Among them, domestic hotel bookings increased by more than 90% year-on-year, an increase of more than 70% compared to the same period in 2019. Due to the impact of the sinking strategy, the commission rate and platform ADR were slightly lower than the pre-epidemic level. At the same time, considering the seasonality, the company expects a certain degree of slowdown in domestic air and hotel bookings in Q4.
Outbound hotel and flight bookings have recovered to about 80% of the same period in 2019 (compared to 60% in Q2), while the overall industry recovery rate of international air passenger volume during the same period exceeded 50%. The total booking volume of global OTA platforms has increased by more than 100% year-on-year and compared to the same period in 2019. The company expects outbound flight and hotel bookings in Q4 to recover to 80% of the same period in 2019. With the gradual improvement of visa procedures and the continued recovery of international flight supply in the winter and spring flight season, it is expected that outbound air and hotel revenue will return to pre-epidemic levels in 2024, becoming a major driving factor for next year's performance growth.
Unfortunately, the stock price fell by about 8% during trading hours.
One important reason, and also a cautious reason for many investment banks: domestic travel growth may have reached its peak, while the recovery of outbound travel is steady but slow. The momentum of domestic travel in China may weaken in the next few quarters because Chinese consumers are still cautious and may reduce leisure travel after domestic demand is fully released.
Of course, will international travel continue to strengthen in 2024?
Currently, travel consumption after China's National Day in October is not very strong. Although routes including the China-US route have increased again, the strength of the US dollar may also be a significant factor hindering tourism consumption.
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