The secret behind Trip.com’s resilience

Ctrip's ability to make money can no longer be hidden.

According to Wind data, the net profit of the A-share tourism sector, including hotels, scenic spots, and air transportation, totaled 19 billion yuan in the first three quarters, while Ctrip alone had a non-recurring net profit close to 17 billion yuan.

Ctrip captured about 90% of the profits with approximately 10% of the industry's revenue in the first three quarters, leading to the saying in the industry: "The entire tourism industry is working for Ctrip."

Among various internet companies, Ctrip's performance in recent years has also been outstanding, ranking first with a net profit margin of over 30% in 2024 and the first half of 2025.

Against the backdrop of a skewed supply and demand pattern in the hotel and travel sector, the platform's voice has further strengthened, and as an industry leader, Ctrip has successfully occupied the core position of the value chain.

In terms of GMV in 2024, Ctrip's market share in the OTA sector reached 56%, more than three times that of platforms like Tongcheng and Meituan.

Latecomers have never given up on seizing the dividends of the hotel and travel market: Meituan has partnered with Marriott, JD.com has introduced "zero commission," and Alibaba has integrated Fliggy. As all parties sharpen their knives, Ctrip faces more scrutiny due to controversies like "big data price discrimination" and "automatic price adjustments."

There are many challengers, but where exactly is Ctrip's moat?

The "Good Days" of OTA?

The main source of income for OTA platforms is providing agency distribution services to resource providers and charging commissions.

In this model, platform revenue depends on transaction volume and commission rates. The level of commission rates is influenced by the dynamic matching of supply and demand and the bargaining power of resource providers.

After experiencing the "direct sales over agency" and adjustments to the commission model, the profit margin in the domestic air ticket business has been significantly compressed.

In contrast, the hotel industry has long been in a long-tail, non-standard state, and the value of information matching provided by the platform cannot be overshadowed by direct sales channels.

Referring to the European and American markets, even in a mature state, hotels still need orders from OTA channels for supplementation. In the U.S., 40% of orders are completed through OTAs, and about one-tenth of orders for high-star chain hotels like Marriott also come from OTA channels.

In China, where the industry chain rate is even lower, the booking ratio through OTA channels can reach as high as 70%.

The significant disparity in market position means that platforms hold the power over commission rates, display rankings, pricing strategies, etc. Leaving the platform means losing an important online traffic entry point.

Currently, Ctrip's commission for domestic air ticket bookings and train tickets is only around 2%, while the commission rate for hotels is basically 15%.

For Ctrip, although the revenue scale from ticketing and accommodation is similar, selling tickets is far less profitable than selling hotels.

Although hotels find it difficult to detach from OTA platforms, theoretically, the higher the industry concentration, the stronger the bargaining power of hotels in building their own channels, and the value of intermediaries and traffic windows should correspondingly weaken.

However, reality deviates from this.

In the past two years, after the industry experienced a supply clearing due to the pandemic, the chain rate and market supply have both seen a significant increase.

In 2024, the total number of hotels in China will exceed 370,000, with a net increase of nearly 30,000 large-scale hotels nationwide, and the domestic hotel RevPAR (average revenue per available room) has seen a year-on-year decline of 6% based on last year's high base In the context of oversupply, hotels have a more urgent demand for traffic, and intensified competition among peers further strengthens the platform's advantageous position in cooperation.

Sun Ping (pseudonym), the owner of a four-star upscale hotel, told Xinfeng that starting in 2023, various OTA platforms have begun to covertly increase commission costs. In addition to a basic commission of around 15% (which is usually slightly lower for chain hotels), hotels also need to bear additional commissions from various marketing activities and disguised charges from traffic promotion.

Taking Trip.com as an example, the platform categorizes partner hotels into levels such as "Special, Gold, Silver," etc. The higher the level, the more advantageous the hotel is in search rankings and traffic allocation on the platform, but the corresponding commission rate also increases.

The platform also has traffic support tools such as "Pyramid" and "Cloud Ladder." Among them, "Pyramid" is a pay-per-click advertising promotion product, while "Cloud Ladder" offers hotels a higher display position in exchange for an increased commission rate.

As the hotel profit model comes under pressure, the contradictions between platforms and merchants are gradually becoming prominent.

Not long ago, Trip.com attracted attention due to its "automatic price adjustment."

According to The Paper, the "Price Adjustment Assistant" is a program built into the merchant version of Trip.com's backend, which regularly scans the prices of similar hotel products on other platforms to help the platform monitor whether the current product price is lower than that of competing platforms.

Once it finds that a hotel's pricing is higher than on other platforms, the "Price Adjustment Assistant" will immediately lower the hotel's base price through the system or include the hotel product in promotional activities.

Sun Ping stated that this mechanism has actually existed for a long time and pointed out that "the platform itself does not force price adjustments unless the hotel strategically wants to maintain price levels while also seeking traffic support from multiple platforms."

Recently, Trip.com also launched a two-way evaluation mechanism, allowing hotels to give negative feedback on guests with inappropriate behavior while optimizing the process for managing malicious negative reviews.

However, the platform's dominant discourse pattern is unlikely to change in the short term. Sun Ping estimates that for single hotels that rely entirely on OTA channels, the actual commission cost has generally reached 20%–30% of the order amount, and this proportion is still rising.

A Hard-to-Defend Position

Trip.com never lacks challengers.

While the industry is hotly discussing "Trip.com earning most of the industry's profits," internet platforms like Douyin and JD.com, which come with their own traffic, are entering the market with low commission or even "0 commission" strategies.

However, OTA is not simply a traffic business; it involves a complex chain of fulfillment and service behind it.

Douyin's strategy oscillates between OTA and group buying models, while Fliggy positions itself as an OTP platform that focuses on "heavy transactions and light fulfillment," reflecting the depth of difficulty in this business.

Upstream hotels are dispersed in terms of region and concentration, requiring the establishment of dedicated BD teams for connections, with initial discussions on details including commission rates and room retention, as well as timely maintenance and adjustments in the later stages.

This may explain why Meituan, known for its strong grassroots promotion capabilities, can occupy a place in this field.

Luo Haizi, founder of Haize Capital, told Xinfeng that if measured by room nights, Meituan's share in the hotel and travel sector may already exceed that of Trip.com, "This is because the users and scenarios reached by local life services are inherently broader than those for out-of-town travel." Due to the overflow of traffic from its local life business, Meituan's hotel and travel orders mainly come from users whose consumption behavior is more impulsive and price-sensitive, with a significant share concentrated in the low-star hotel market, resulting in lower commission contributions per room.

The profitable mid-to-high star hotel market is still dominated by Trip.com.

Guosen Securities analyst Zeng Guang estimated that mid-to-high star hotels (3-5 stars) contribute about 50% of Trip.com's total hotel room nights and account for approximately 80% of its domestic accommodation booking revenue, forming the core source of its profits.

This market position is primarily established due to Trip.com's first-mover advantage.

Through equity investments and strategic partnerships, Trip.com has deeply bound itself with hotel groups such as Huazhu, Atour, and ShouLü, as well as upstream and downstream enterprises in the industry chain, building a solid supply chain foundation.

According to iResearch's statistics as of June 2025, the number of high-star hotels on Trip.com reached 600,000, significantly higher than Meituan's 350,000.

Unlike takeout, near and far-field e-commerce, and local group buying, a significant characteristic of the hotel and travel sector is "limited inventory."

At specific times and locations, the number of available rooms is fixed, and cannot be increased like products, nor can it be dispatched across regions like takeout.

It is precisely this characteristic of limited supply that makes quality hotel resources inherently exclusive, tending to cooperate long-term with stable and high-quality channels, thereby constructing a structural moat for Trip.com's first-mover advantage.

The industry's characteristics also determine that purely relying on price competition is difficult to sustain in the OTA field.

Tourism consumption itself has characteristics of low frequency, high average transaction value, and high decision-making risk, with users generally unwilling to easily switch platforms for important trips.

For hotels, the explosive traffic brought by short-term marketing is difficult to convert into long-term value, especially for leading hotel groups, which generally reject OTAs that impact their official pricing system through long-term subsidies and low-price competition.

Therefore, even if latecomers hold advantages in traffic and funding, it is still challenging to easily shake the existing pattern.

A person close to Meituan's hotel and travel sector revealed to Xin Feng that Meituan faces difficulties in handling consumer after-sales, with hotel responses to complaints generally being less proactive than those of Trip.com.

Hotel owner Sun Ping further explained to Xin Feng that hotels are generally sensitive to negative reviews on OTA platforms, but indeed "pay more attention to Trip.com," "the reason is simple, Trip.com has more and higher quality customer resources."

Sun Ping also stated that many large groups and state-owned enterprises have signed strategic agreements with Trip.com, and only bookings made through Trip.com are reimbursed. Trip.com has invested significantly in cultivating customer habits, offering refunds or triple refunds if customers are dissatisfied.

Corresponding feedback can also be observed from the consumer side: many users on social media pointed out that hotels respond faster and provide better service to Trip.com guests, with some hotels even proactively offering breakfast in exchange for positive reviews.

In complex scenarios such as overseas travel, Trip.com's after-sales support capability is also significantly superior to other platforms.

The combination of supply chain foundation and mid-to-high-end customer base further strengthens Trip.com's platform barriers.

As pointed out by Founder Securities analyst Liu Zhangming: Trip.com's B-end and C-end advantages reinforce each other, with significant bilateral network effects, forming a virtuous cycle. Currently, although some platforms can lock in certain travel demands through content marketing and the Double Eleven shopping festival, the overall hotel and travel industry still faces challenges of weak demand growth and a lack of new scenarios and new traffic entry points.

"The most important thing is that, against the backdrop of oversupply, the OTA industry lacks the real motivation to break the existing profit model, making it difficult for the market structure to undergo substantial changes," said Luo Haizi.

Exploring Overseas Markets

The money earned from the domestic market is being used by Trip.com for overseas expansion.

As the core vehicle for international business, Trip.com, the overseas version of Trip.com, is highly anticipated by the group, with an expected compound growth rate of about 50% over the next 3-5 years, and revenue contribution increasing to 15-20%. The long-term goal is to become a one-stop travel platform serving global Asia-Pacific customers.

When Trip.com, as a "latecomer," challenges established OTAs, the competitive landscape it faces is actually better than that of domestic internet platforms.

From the perspective of market structure, the concentration of the Asian OTA market has not yet reached the levels of Europe and the United States, and the online penetration rate is relatively low, leaving ample development space for Trip.com.

Especially in emerging markets like Southeast Asia, users generally skip the PC era and directly enter the mobile internet phase, prioritizing mobile phones for online access and consumption.

In contrast, Booking still derives nearly half of its orders from the PC side. This difference provides favorable conditions for Trip.com to replicate its mature APP business model domestically.

Trip.com is attempting to replicate some of the operational strategies and supply chain foundations that have been successfully validated in the domestic market to overseas markets.

By reusing the supply chain system built to serve the outbound needs of Chinese tourists, Trip.com can share operational costs, allowing it to compete with lower commission rates than established international platforms like Booking and Expedia.

At the same time, Trip.com is continuously building its global service capabilities.

For example, to conquer the Asia-Pacific market, it has established localized teams in Thailand, South Korea, and other regions, integrated regional payment systems, and deployed a multilingual customer service system.

Currently, Trip.com operates 18 customer service centers globally, with approximately 13,000 customer service personnel, and the proportion of non-Chinese language service volume has increased to 72%.

Especially against the backdrop of mainstream overseas OTA platforms promoting AI to reduce costs and improve efficiency, the differentiation in service routes will become more pronounced.

In 2024, Trip.com's international OTA platform is expected to maintain an annual revenue growth rate of about 70%. This year's third-quarter booking volume increased by approximately 60% year-on-year, with the Asia-Pacific region seeing an increase of over 50%.

In Luo Haizi's view, the gap between Trip.com and international platforms like Booking is "multiplicative" rather than "quantitative." If it can maintain the current high growth rate of about 60%, surpassing competitors in the Asia-Pacific market is not out of reach. As the business scale continues to expand, the market can expect significant marginal returns after breaking even due to scale effects.

However, this process may take a long time.

Guotai Junan believes that although Trip.com's overseas business has achieved profitability in the Hong Kong and Singapore markets, it has not yet formed a scale effect overall, and the company has not disclosed detailed gross profit data for its overseas business to date The management of Trip.com made it clear at the beginning of the year that in order to consolidate its competitive position in the Asia-Pacific market, sales expenses are expected to remain high for a long time, continuously putting pressure on profits.

In the third quarter of this year, after excluding the gains from the sale of its stake in the Indian OTA platform MakeMyTrip, Trip.com's operating profit and adjusted EBITDA increased by 11% and 12% year-on-year, respectively, both lower than the 18% revenue growth during the same period.

During the earnings call, management stated that in the third quarter, they launched a "Mega Sale" campaign in key markets such as South Korea, Thailand, and Malaysia, driving sales to a record high.

With the global holiday season approaching, Trip.com plans to gradually increase its marketing investment, and the proportion of marketing expenses to revenue may rise quarter-on-quarter, but the year-on-year change will depend on variations in different regions and channel combinations.

As of now, Trip.com is far from being a "lying flat" money-making machine