Trip.com Group Limited (TCOM) 2020 Q3 法說會逐字稿

Thank you for standing by, and welcome to the Trip.com Group Limited Q3 2020 Earnings Conference Call. (Operator Instructions)

感謝各位稍候，歡迎參加 Trip.com Group Limited 2020 年第三季財報電話會議。（接線員指示）

I would now like to hand the conference over to Michelle Qi, Senior IR Director. Please go ahead.

現在我想將會議交給資深投資人關係總監 Michelle Qi。請開始。

Thank you, Kelly. Thank you all. Good morning, and welcome to Trip.com Group's Third Quarter 2020 Earnings Conference Call. Joining me today on the call are Mr. James Liang, Executive Chairman of the Board; Ms. Jane Sun, Chief Executive Officer; and Ms. Cindy Wang, Chief Financial Officer.

謝謝你，Kelly。也謝謝各位。各位早安，歡迎參加 Trip.com Group 2020 年第三季財報電話會議。今天與我一同出席的有董事會執行董事長 James Liang 先生、執行長 Jane Sun 女士，以及財務長 Cindy Wang 女士。

During this call, we will discuss our future outlook and performance, which are forward-looking statements made under safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in Trip.com Group's public filings with the Securities and Exchange Commission. Trip.com Group does not undertake any obligation to update any forward-looking statements, except as required under applicable law.

在本次電話會議中，我們將討論未來展望與營運表現，其中包含依據 1995 年《美國私人證券訴訟改革法》安全港條款所作之「前瞻性陳述」。前瞻性陳述具有內在風險與不確定性，因此我們的實際結果可能與今日所表達之觀點存在重大差異。多項潛在風險與不確定性已載明於 Trip.com Group 向美國證券交易委員會提交的公開文件中。除非適用法律另有要求，Trip.com Group 不承擔更新任何前瞻性陳述之義務。

James, Jane and Cindy will share our strategy and business updates, operating highlights and financial performance for the third quarter of 2020 as well as outlook for the fourth quarter of 2020. After the prepared remarks, we will have a Q&A session.

James、Jane 與 Cindy 將分享我們的策略與業務最新進展、營運重點與 2020 年第三季財務表現，以及 2020 年第四季展望。管理層致詞結束後，我們將進行問答環節。

With that, I will turn the call over to James. James, please.

接下來，我把電話交給 James。James，請。

Thank you, Michelle. And thank you, everyone, for joining us today. Trip.com Group turned 21 in October this year. We were delighted to have celebrated the anniversary with many of our suppliers, partners and customers.

謝謝你，Michelle。也謝謝各位今天加入我們。Trip.com Group 今年 10 月滿 21 週年。我們很高興能與眾多供應商、合作夥伴與客戶一同慶祝這個週年紀念。

As our China domestic business normalizes, I have taken some time to reflect on the learnings from the past year and what we will focus on as a company to drive future growth amidst the new environment. Today, I'd like to share a few points.

隨著中國境內業務逐步回歸常態，我也花了一些時間回顧過去一年的收穫，以及在新環境下我們作為一家公司將聚焦哪些方向以推動未來成長。今天我想分享幾點。

Firstly, we will focus on content. Our company will not only be a platform for transaction, but also a hub for travel inspiration. Secondly, we'll focus on products with a renewed focus on the mass markets by our customers. We will work on securing boutique and diversified inventory in addition to sourcing deals of mass popularity. Our customers' preference are evolving and their needs have become more and more personalized. Boutique products such as alternative combination and themed hotels and dining have become important elements of each memorable trip. Combining our strengths in platform sourcing and operational support, we are able to run a diversified product offering at scale. Only with competitive product supplies, we are able to attract and retain our customers for the long run. Thirdly, we will focus on supply chain empowerment building on existing connections. We will provide further support to suppliers in marketing, content creation, technology and financing in order to further improve their efficiency and conversion on our platform.

第一，我們將聚焦內容。我們不僅要成為交易平台，也要成為旅行靈感的樞紐。第二，我們將聚焦產品，並重新聚焦於大眾市場客群。我們將在採購大眾熱門優惠的同時，致力於取得精品化與多元化的庫存。客戶偏好正在演變，需求也愈來愈個人化。精品產品，例如替代性組合、主題飯店與餐飲，已成為每趟難忘旅程的重要元素。結合我們在平台採購與營運支援方面的優勢，我們能以規模化方式提供多元產品組合。唯有具競爭力的產品供給，才能長期吸引並留住客戶。第三，我們將在既有連結基礎上，聚焦供應鏈賦能。我們將在行銷、內容創作、技術與融資等方面為供應商提供更多支援，以進一步提升其在我們平台上的效率與轉化。

In addition, we will focus on quality. Earlier this year, our customer-first approach in processing COVID-related refunds received great compliments on multiple fronts. As a result, our net promotion score hit an all-time high. We are proud of the team's collective response during the pandemic, and we'll continue to identify and work on the new areas to improve our customer experience and product quality.

此外，我們也將聚焦品質。今年稍早，我們以客戶優先的方式處理與 COVID 相關的退款，獲得多方高度肯定。因此，我們的淨推薦值（NPS）創下歷史新高。我們為團隊在疫情期間的集體應對感到自豪，並將持續識別並投入新的改善領域，以提升客戶體驗與產品品質。

Lastly, I would like to touch on the topic of global vision. As a company, we need to have local focus and global vision. In the long run, the global market still presents a significant opportunity for growth. The pandemic has not changed that. However, in the near term, we have to lean on domestic markets for recovery and ensure our product lineup is perfected to capture such opportunities. At the same time, we'll be ever watchful of the prospects of global markets, ensuring that our technology architecture is easily fixable to incorporate international adaptations. Recent breakthroughs in vaccine for COVID-19 have been encouraging. With the continued hard work of the global community, we are hopeful that more meaningful recovery for international travel is on the way.

最後，我想談談全球視野這個主題。作為一家公司，我們需要在地聚焦與全球視野並重。長期而言，全球市場仍提供顯著的成長機會，疫情並未改變這一點。然而在短期內，我們必須依靠國內市場復甦，並確保產品組合臻於完善以把握相關機會。同時，我們也將持續密切關注全球市場前景，確保我們的技術架構能夠輕鬆調整，以納入國際化的在地適配。近期 COVID-19 疫苗的突破令人鼓舞。隨著全球社群持續努力，我們期待國際旅行將迎來更具意義的復甦。

In summary, we will focus on domestic markets, including content, products, supply chain and quality. And at the same time, we'll retain our global vision for the long run.

總結而言，我們將聚焦國內市場，包括內容、產品、供應鏈與品質；同時，長期仍將保有全球視野。

With that, I will turn the call over to Jane.

接下來，我把電話交給 Jane。

Thanks, James. Good morning to everyone. I will start with a brief overview of our performance in the past quarter. Total net revenues in Q3 declined by 48% year-over-year and increased by 73% quarter-over-quarter, mainly driven by the continued strong sequential recovery of our China domestic businesses.

謝謝你，James。各位早安。我先簡要回顧上一季的表現。第三季總淨營收年減 48%，季增 73%，主要受惠於中國境內業務持續強勁的環比復甦。

During the third quarter, the company remained lean on operations while starting to invest in resources to capture market to rebound. We are pleased to see the company achieved non-GAAP operating income of RMB 1.3 billion, representing 24% of net revenue. At the same time, our operating cash flow at the group level also turned positive for the quarter. Our domestic China business achieved a few key milestones during the third quarter. Most significantly, domestic air and hotel bookings, both turned positive starting August. Short-haul hotel reservation increased by around 20% for the third quarter and mid- to high-end hotel bookings grew at double digits year-over-year, exiting Q3. Strong recovery momentum extended into the fourth quarter.

第三季期間，公司在維持精實營運的同時，也開始投入資源以把握市場反彈。我們很高興看到公司實現非 GAAP 營業利益人民幣 13 億元，占淨營收 24%。同時，集團層級的營運現金流在本季亦轉為正值。中國境內業務在第三季達成數個關鍵里程碑。最重要的是，國內機票與飯店訂單自 8 月起皆轉為正成長。第三季短程飯店預訂約成長 20%，而中高端飯店訂單在第三季末呈現年增雙位數。強勁的復甦動能延續至第四季。

During October Golden Week holiday, our domestic hotel GMV reached double-digit growth year-over-year. Regional travel continued to lead with our local GMV growth over 50%. Attraction tickets increased over 100% compared to last year. And our car rental services saw more than 50% year-over-year growth. As we enter into the winter season, we are glad to see our domestic air and hotel booking have achieved a positive growth momentum quarter-to-date, despite the weak travel seasonality. In particular, mid- to high-end domestic hotel reservation have maintained double digits growth compared to the same period last year.

在 10 月黃金週假期期間，我們的國內飯店 GMV 年增達雙位數。區域性旅遊持續領先，本地 GMV 成長超過 50%。景點門票較去年成長超過 100%。租車服務亦實現年增超過 50%。進入冬季後，儘管旅遊淡旺季因素不利，我們仍樂見國內機票與飯店預訂在本季迄今維持正向成長動能。尤其是國內中高端飯店預訂，相較去年同期仍維持雙位數成長。

As our domestic business gradually turn to full capacity, I would like to recap a few important contributors that have propelled our company towards a speedy recovery. Firstly, our enhanced content strategy strengthened our multi-brand one-stop platform to attract and engage users across the spectrum. Our branded Ctrip continue to lead the recovery, especially at the mid- to high-end segment. Recent content efforts, such as our live stream platform improved trip moments and the revamped user interface have all contributed to positive user engagement. Our optimized information display has helped hotel partners to improve conversion rate by 5%.

隨著國內業務逐步恢復至滿載運作，我想回顧幾項推動公司快速復甦的重要因素。第一，我們強化的內容策略，鞏固了多品牌一站式平台，吸引並提升各類用戶的參與度。我們的 Ctrip 品牌持續引領復甦，尤其在中高端市場表現突出。近期內容方面的投入，例如直播平台、升級的旅途時刻（trip moments）以及改版的使用者介面，皆促進了正向的用戶互動。我們優化的資訊呈現也協助飯店合作夥伴將轉化率提升 5%。

China delivered multiple milestones despite of the pandemic with a focus on providing quality products and services for travelers budget. Among this year's new users, approximately 40% are under 25 and close to half from third tier cities and beyond. Millions of users booked their first flight tickets through China this year reaching a 5-year high. In addition, the one-stop shopping nature of our apps, also encompass content and transactions, led to a further increase of user retention and conversion. As a result, we saw a double-digit improvement in our cross-sell ratio from our air to a hotel compared to the same period last year. We are fully confident that our multi-brand one-stop platform will continue to drive further customer and market share gains in the future.

儘管面臨疫情，中國業務仍達成多項里程碑，並聚焦為旅客預算提供高品質的產品與服務。今年新增用戶中，約 40% 低於 25 歲，且近一半來自三線及以下城市。數百萬用戶今年透過中國業務預訂了人生第一張機票，創下 5 年新高。此外，我們 App 的一站式購物特性同時涵蓋內容與交易，進一步提升用戶留存與轉化。因此，我們看到由機票帶動飯店的交叉銷售比率，相較去年同期提升達雙位數。我們完全有信心，多品牌一站式平台將在未來持續推動客戶與市占的進一步提升。

Secondly, we further enhanced our product competitiveness, enriching domestic and boutique products such as themed trips and private tools. Our customer demand shifted from large group tour to smaller tours and from popular products to more customized products. We have also reinforced the promotion strategy in response to this trend. Many of these products have delivered high double-digit growth compared to the last year. With our wide product coverage and strong operational capability, we're able to target, promote and connect the products to our customers in the most accurate and efficient manner.

第二，我們進一步提升產品競爭力，豐富國內與精品產品，例如主題行程與私家團等。我們的客戶需求已從大型團體旅遊轉向小團，並從大眾熱門產品轉向更客製化的產品。我們也因應此趨勢強化促銷策略。其中許多產品相較去年實現高雙位數成長。憑藉廣泛的產品覆蓋與強大的營運能力，我們能以最精準且高效率的方式，鎖定、推廣並將產品與客戶連結起來。

Thirdly, we continued to focus on supply chain empowerment. We have opened up our service capability to our hotel partners this year, who can then directly connect with our customers. Our hotel partners are able to monitor their ROI of each campaign by using our system in order to make informed decisions about their operations. Moreover, our Ctrip Hotel University have produced more than 150 free classes since the beginning of this year with over 1 million attendees for the hotel industry. Deep integration and a close partnership have produced meaningful improvement in traffic and conversion for our hotel partners and ensure a high-quality user experience for our customers. In Q3, we maintained our leadership in domestic hotel coverage and saw a further double digits quarter-over-quarter growth in the number of the hotels designating us as their preferred distributor.

第三，我們持續聚焦供應鏈賦能。今年我們向飯店合作夥伴開放了服務能力，使其能直接與客戶連結。飯店合作夥伴可透過我們的系統監測每一項活動的投資報酬率（ROI），以便對其營運做出更明智的決策。此外，我們的攜程飯店大學自今年年初以來已推出超過 150 堂免費課程，累計逾 100 萬人次參與，服務飯店產業。深度整合與緊密合作，為飯店合作夥伴帶來流量與轉化的顯著提升，並確保客戶獲得高品質的使用者體驗。第三季，我們維持國內飯店覆蓋的領先地位，並看到將我們指定為首選分銷商的飯店數量，季增進一步達雙位數成長。

Now turning to our international business. Despite the ongoing pressure faced by all the international travel, traffic to our brand, ctrip.com, has recovered to approximately 70% in the third quarter. This was primarily driven by the domestic travel demand, such as staycations and the local travel commit to the challenging international environment. We are glad to see many governments have taken targeted measures to revival the travel industry. Recently, we announced our cooperation with Singapore Tourism Board to launch their Singapore Rediscover vouchers. Moreover, we have also been able to work with different travel authorities globally on similar revival plans. Recent development in effective vaccine and treatment for COVID-19 have been encouraging. We believe a global rollout will be crucial to support further recovery in our international and cross-border business.

現在轉到我們的國際業務。儘管所有國際旅行仍面臨持續壓力，我們品牌 ctrip.com 的流量在第三季已恢復至約 70%。這主要由國內旅遊需求所帶動，例如宅度假（staycations）以及在充滿挑戰的國際環境下的本地旅遊出行。我們很高興看到許多政府已採取有針對性的措施以振興旅遊業。近期，我們宣布與新加坡旅遊局合作推出「新加坡重遊」消費券（Singapore Rediscover vouchers）。此外，我們也能與全球不同旅遊主管機關就類似的振興計畫展開合作。近期在 COVID-19 疫苗與治療方面的有效進展令人鼓舞。我們相信，全球推廣將是支持我們國際及跨境業務進一步復甦的關鍵。

As James mentioned, due to pandemic, we have opted to focus primarily on China domestic market this year. However, our vision for long-term global expansion remain the same. We will work hard with our partners to well prepare ourselves for the global recovery.

正如 James 提到的，由於疫情影響，我們今年選擇主要聚焦中國國內市場。然而，我們對長期全球擴張的願景仍然不變。我們將與合作夥伴共同努力，為全球復甦做好充分準備。

With that, I will turn the call over to Cindy.

接下來，我把電話交給 Cindy。

Thanks, Jane. Thanks, everyone. For the third quarter of 2020, Trip.com Group reported net revenue of RMB 5.5 billion, representing a 48% decrease from the same period in 2019. Net revenue for the third quarter of 2020 increased by 73% from the previous quarter, driven by a continued strong recovery of our China domestic business.

謝謝，Jane。謝謝各位。2020 年第三季，Trip.com 集團淨營收為人民幣 55 億元，較 2019 年同期下降 48%。2020 年第三季淨營收較上一季成長 73%，主要受惠於中國國內業務持續強勁復甦。

Accommodation reservation revenue for the third quarter of 2020 was RMB 2.5 billion, representing a 40% decrease from the same period in 2019 and a 98% increase from the previous quarter. Sequential increase of accommodation reservation revenue was mainly driven by the strong recovery momentum of domestic markets. Accommodation reservations for China domestic markets reached a positive year-over-year growth from the second half of August, with pricing down moderately from the same period last year. Short-haul reservations grew by more than 20% year-over-year.

2020 年第三季住宿預訂收入為人民幣 25 億元，較 2019 年同期下降 40%，較上一季成長 98%。住宿預訂收入的環比成長主要由國內市場強勁的復甦動能所帶動。自 8 月下旬起，中國國內市場的住宿預訂已轉為年增正成長，價格較去年同期小幅下調。短程（short-haul）預訂年增超過 20%。

International hotel recovery remains minimal. However, domestic bookings on brand Trip.com have seen strong growth momentum in the third quarter. Transportation ticketing revenue for the third quarter of 2020 was RMB 1.9 billion, representing a 49% decrease from the same period in 2019 and a 66% increase from the previous quarter. The sequential increase of transportation ticketing revenue from the second quarter of 2020 was mainly due to continued strong recovery of domestic markets.

國際酒店復甦仍然有限。然而，Trip.com 品牌在第三季的國內訂單呈現強勁成長動能。2020 年第三季交通票務收入為人民幣 19 億元，較 2019 年同期下降 49%，較上一季成長 66%。交通票務收入自 2020 年第二季以來的環比成長，主要由國內市場持續強勁復甦所致。

Air ticketing business for China domestic market reached a positive year-over-year growth for the third quarter, although pricing remains discounted compared with last year. Packaged tour revenue for the third quarter of 2020 was RMB 326 million, representing an 80% decrease from the same period in 2019 and a 151% increase from the previous quarter. The sequential increase of packaged tour revenue was mainly driven by China domestic cross-region packaged product being resumed since July. International packaged products are still not permitted to operate.

中國國內市場的機票票務業務在第三季實現年增正成長，儘管票價相較去年仍有折扣。2020 年第三季度假產品（packaged tour）收入為人民幣 3.26 億元，較 2019 年同期下降 80%，較上一季成長 151%。度假產品收入的環比成長主要由於自 7 月起中國國內跨區域度假產品恢復上線。國際度假產品仍不允許營運。

Corporate travel revenue for the third quarter of 2020 was RMB 282 million, representing a 16% decrease from the same period in 2019 and a 74% increase from the previous quarter. Revenue from other businesses declined by 31% year-over-year for the third quarter of 2020 and increased to 2% from the previous quarter. The year-over-year decline was mainly driven by a decline in overseas advertising revenue.

2020 年第三季企業差旅收入為人民幣 2.82 億元，較 2019 年同期下降 16%，較上一季成長 74%。2020 年第三季其他業務收入年減 31%，較上一季增加 2%。年減主要由海外廣告收入下降所致。

Gross margin was 81% for the third quarter of 2020, which increased from 79% for the same period in 2019 and 72% for the previous quarter. Excluding share-based compensation charges, total non-GAAP operating expenses decreased by 45% year-over-year, thanks to our generally flexible cost structure and efficient operational management.

2020 年第三季毛利率為 81%，高於 2019 年同期的 79% 以及上一季的 72%。剔除股份基礎薪酬費用後，非 GAAP 總營運費用年減 45%，得益於我們整體具彈性的成本結構與高效率的營運管理。

Total non-GAAP operating expenses increased by 25% quarter-over-quarter in response to the improving domestic business. Sales and marketing expenses for the third quarter of 2020 decreased by 54% to RMB 1.1 billion from the same period in 2019 and increased by 71% from the previous quarter. Sequential increase from the second quarter is primarily driven by increase in marketing spending in domestic China market as demand rebounded strongly. We may choose to increase marketing spending in coming quarters to stimulate further growth as market demand continues to recover.

隨著國內業務改善，非 GAAP 總營運費用環比增加 25%。2020 年第三季銷售與行銷費用為人民幣 11 億元，較 2019 年同期下降 54%，較上一季成長 71%。相較第二季的環比增加，主要由於中國國內市場需求強勁反彈，帶動行銷投入增加。隨著市場需求持續復甦，我們可能在未來幾季選擇增加行銷支出，以刺激進一步成長。

Product development expenses for the third quarter of 2020 decreased by 28% to RMB 2 billion from the same period in 2019 and increased by 11% from the previous quarter, primarily due to fluctuations in expenses related to product development personnel. A significant portion of the expenses can be considered variable.

2020 年第三季產品研發費用為人民幣 20 億元，較 2019 年同期下降 28%，較上一季成長 11%，主要由於與產品研發人員相關費用的波動所致。其中相當一部分費用可視為變動成本。

G&A expenses for the third quarter of 2020 decreased by 38% to RMB 505 million from the same period in 2019 and decreased by 2% from the previous quarter. The year-over-year decline was mainly due to a reversal of bad debt provision for our travel suppliers, offset partially by personnel restructuring costs related to certain overseas subsidiaries. Excluding the factors mentioned above, G&A expenses for the third quarter of 2020 decreased modestly from the same period in 2019.

2020 年第三季一般及行政（G&A）費用為人民幣 5.05 億元，較 2019 年同期下降 38%，較上一季下降 2%。年減主要由於對旅遊供應商的壞帳準備回轉所致，但部分被與若干海外子公司人員重整相關的成本所抵銷。剔除上述因素後，2020 年第三季 G&A 費用較 2019 年同期小幅下降。

Excluding share-based compensation charges, non-GAAP income from operations was RMB 1.3 billion. Non-GAAP operating margin reached 24% compared to 25% in the same period in 2019 and negative 6% in the previous quarter. Diluted earnings per ADS was RMB 2.61 or USD 0.38 for the third quarter of 2020. Excluding share-based compensation charges and fair value changes of equity securities investments and exchangeable senior notes, non-GAAP diluted earnings per ADS was RMB 2.32 or USD 0.34 for the same quarter of 2020.

剔除股份基礎薪酬費用後，非 GAAP 營運利潤為人民幣 13 億元。非 GAAP 營運利潤率達 24%，相較 2019 年同期為 25%，上一季為負 6%。2020 年第三季每股 ADS 攤薄收益為人民幣 2.61 元或美元 0.38 元。剔除股份基礎薪酬費用以及權益證券投資與可交換優先票據的公允價值變動後，2020 年同季非 GAAP 每股 ADS 攤薄收益為人民幣 2.32 元或美元 0.34 元。

Now turning to the fourth quarter of 2020. We expect a sustained year-over-year recovery in China domestic business. For our international business, it continues to be under pressure due to the ongoing pandemic worldwide. For the fourth quarter of 2020, company currently expects net revenues to decrease by 37% to 42% year-over-year. Excluding share-based compensation charges, the company expects non-GAAP operating income will be between RMB 300 million to RMB 400 million. This forecast reflects Trip.com Group's current and preliminary view, which is subject to change. The increasing uncertainties due to the coronavirus outbreak has further restricted our visibility. We will continue to monitor the market and provide more details to investors in time.

現在轉到 2020 年第四季。我們預期中國國內業務將持續呈現年比年復甦。至於國際業務，由於全球疫情仍在延續，仍將承受壓力。對於 2020 年第四季，公司目前預期淨營收將年減 37% 至 42%。剔除股份基礎薪酬費用後，公司預期非 GAAP 營運利潤將介於人民幣 3 億元至 4 億元之間。此預測反映 Trip.com 集團目前的初步看法，且可能變動。由於新冠疫情帶來的不確定性增加，進一步限制了我們的能見度。我們將持續監測市場，並適時向投資人提供更多細節。

With that, we will open up for Q&A. Operator, please.

接下來，我們將開放問答。接線員，請。

(Operator Instructions) Your first question comes from Joyce Ju with Bank of America.

（接線員指示）第一個問題來自美國銀行（Bank of America）的 Joyce Ju。

Congrats on the solid quarter. I have two questions. First, could you share some recent trends in China's domestic business recover? Second, given the latest good news on the COVID-19 vaccine, when do you think the international travel could start to recover and when it could fully recover?

恭喜本季表現穩健。我有兩個問題。第一，能否分享一些中國國內業務近期復甦的趨勢？第二，鑑於近期關於 COVID-19 疫苗的好消息，您認為國際旅行何時可能開始復甦，以及何時可能完全復甦？

China domestic travel has mostly reached full recovery, as we shared earlier. Domestic hotel and air booking have both turned positive growth since August, and especially the high-end business and short-haul travels have recovered well. International travel, especially outbound business will remain low in the next few months. It takes time for the vaccine to reach general population. And a full recovery of international travel, it will take at least a year or even longer considering that it's not just the transportation of vaccine, but also a political and international arrangement and in the cooperation from between different governments. So it takes a while for the international community to fully, again, embrace it's international travel. So we are definitely prepared for the next year to take full advantage of the gradual, but I think steady recovery of the international travel market.

如我們先前分享的，中國國內旅遊基本已恢復至全面復甦。自 8 月以來，國內酒店與機票預訂都已轉為正成長，尤其是高端業務與短程旅行復甦良好。國際旅行，特別是出境業務，在未來幾個月仍將維持低位。疫苗普及到一般民眾需要時間。而國際旅行要完全復甦，至少需要一年甚至更久，因為這不僅是疫苗運輸的問題，還涉及政治與國際安排，以及各國政府之間的合作。因此，國際社會要再次全面擁抱國際旅行仍需一段時間。我們已為明年做好準備，以充分把握國際旅遊市場逐步但我認為穩健的復甦。

Your next question comes from Jialong Shi with Nomura.

下一個問題來自野村（Nomura）的石佳龍。

Congratulations on a very solid quarter. Back in November, China's authority released a drop antitrust guideline for the Internet platforms. Could you provide some colors on how this new regulation will impact China's OTA landscape? And more specifically, how this regulation will impact Trip.com's operation and financials?

恭喜本季表現非常穩健。回到11月，中國主管機關針對網際網路平台發布了反壟斷指引草案。能否請您分享一些看法，這項新規將如何影響中國 OTA 產業格局？更具體而言，這項規範將如何影響 Trip.com 的營運與財務表現？

Thank you your question. We always support government's initiatives to prepare -- to protect the market. So our team is working very hard to make sure all the rules and regulations are carefully studied, and we're staying compliant with the rules and the regulations to be published and finalized.

謝謝你的提問。我們一向支持政府為了——保護市場而推出的各項倡議。因此，我們的團隊正非常努力，確保仔細研讀所有規則與法規，並在相關規則與法規發布與定案後，持續保持合規。

Your next question comes from Thomas Chong with Jefferies.

下一個問題來自 Jefferies 的 Thomas Chong。

Can the management provide some guidance about the Q4 revenue by segment? And my second question is about how we should think about the competitive landscape in the hotel business in lower-tier cities as well as high-end hotels as we go into 2021?

管理層能否就第四季分部收入提供一些指引？第二個問題是，展望 2021 年，我們應如何看待低線城市的飯店業務以及高端飯店的競爭格局？

Sure. The recovery of our domestic business will sustain the fourth quarter. Despite weaker winter seasonality, we expect total revenue to decrease 37% to 42% year-on-year in Q4. In general, we expect a full recovery of domestic hotel and air ticketing reservations despite the unfavorable winter seasonality. In terms of revenue guidance for each revenue items, we expect revenue for accommodation reservations to decrease 25% to 30% year-on-year. Our China domestic hotel reservations achieved a double-digit GMV growth during Golden Week holiday and maintained positive year-on-year growth quarter to date, and especially our high-end hotel grow at double-digit. Our recovery on the domestic hotel business significantly outperformed the industry average, especially in the mid- to high-end hotel segment. While our international hotel revenue remained at very low level compared to 20% to 25% revenue contribution in fourth quarter last year.

好的。我們國內業務的復甦將延續到第四季。儘管冬季季節性較弱，我們預期第四季總收入將年減 37% 至 42%。整體而言，儘管冬季季節性不利，我們預期國內飯店與機票預訂將全面恢復。就各收入項目的指引而言，我們預期住宿預訂收入將年減 25% 至 30%。我們的中國國內飯店預訂在黃金週期間實現 GMV 雙位數成長，且本季迄今維持年增為正，尤其是我們的高端飯店成長達雙位數。我們國內飯店業務的復甦顯著優於行業平均，特別是在中高端飯店細分市場。另一方面，我們的國際飯店收入仍處於非常低的水準，相較去年第四季國際業務約占 20% 至 25% 的收入貢獻。

With regard to the transportation reservations, we expect the revenues will decrease 47% to 52% year-on-year. Our domestic air ticket reservations achieved a double-digit year-on-year growth during the Golden Week holiday and maintained positive year-on-year growth quarter-to-date. International business remain compared -- same as the hotel business. Our international business remain at very low level compared to 40% to 50% revenue contribution in fourth quarter last year. Our -- we expect revenue for package tour business to decrease 55% to 60% year-on-year. Domestic package tour business continued to recover gradually, leading by the local activities and customized tool packages. International package tour business have not yet restarted due to the travel restriction and the international -- the pandemic, which accounted for 40% to 50% of our total packaged tour revenue in fourth quarter last year. We expect revenue for corporate travel business to decrease 15%, 1-5, to 20%.

在交通預訂方面，我們預期收入將年減 47% 至 52%。我們的國內機票預訂在黃金週期間實現年增雙位數，且本季迄今維持年增為正。國際業務仍然——與飯店業務相同。我們的國際業務仍處於非常低的水準，相較去年第四季國際業務約占 40% 至 50% 的收入貢獻。我們——預期度假套裝（package tour）業務收入將年減 55% 至 60%。國內度假套裝業務持續逐步復甦，主要由本地活動與客製化旅遊套裝帶動。由於旅行限制以及國際——疫情，國際度假套裝業務尚未重啟；而該部分在去年第四季約占我們度假套裝總收入的 40% 至 50%。我們預期商旅（corporate travel）業務收入將年減 15%——1-5——至 20%。

Yes. In terms of the competition, let's address it in a couple of layers. First of all, in terms of the product offering, we want to make sure our product offer is comprehensive to provide the best product for high-end middle care and also new markets. So as Jane said, one of the initiatives that we are taking to capitalize on the domestic market is to make sure we go deep on product offering. Secondly, on the supply chain, also, we're not only focusing on the first tier, second tier cities, we are also going wider and more comprehensive to make sure wherever our customers are, we have the product to cover that. And thirdly, as we discussed before, when we look at our new customer acquisition, the majority of our customer acquisition focuses on new and young customers, not only centered around the first tier and second-tier cities but also go beyond these city hubs. And in terms of our sales and marketing strategy, not only we are well exposed in the first tier, second tier cities, we also utilize our cross-sell opportunities to further penetrate into the third tier and beyond cities to reach out to our customers. And also our offline stores were -- more than 8,000 offline stores are also located in the cities outside of first tier cities -- third tier cities, which give us a very good exposure to further reach out to these markets, which is very new to us. So going forward, we will be very aggressive in terms of expanding in product line, sales channel and also our reach for our brand exposure. Thank you.

是的。就競爭而言，我們可以分幾個層面來看。首先，在產品供給方面，我們希望確保產品供給足夠全面，為高端與中端客群以及新市場提供最佳產品。正如 Jane 所說，我們為了把握國內市場所採取的舉措之一，就是確保在產品供給上做深做透。其次，在供應鏈方面，我們不僅聚焦一線、二線城市，也會向更廣、更全面的方向拓展，確保無論客戶在哪裡，我們都有產品覆蓋。第三，如同我們之前討論的，在新客獲取方面，我們獲客的主力聚焦於新的、年輕的客群，不僅集中在一線、二線城市，也會走出這些城市樞紐。就銷售與行銷策略而言，我們不僅在一線、二線城市有良好曝光，也會利用交叉銷售機會進一步滲透到三線及以下城市，觸達更多客戶。此外，我們的線下門店——超過 8,000 家線下門店——也位於一線城市以外的城市——三線城市，這讓我們能夠獲得非常好的曝光，進一步觸達這些對我們而言相當新的市場。展望未來，我們將在產品線擴張、銷售渠道以及品牌曝光觸達方面採取非常積極的策略。謝謝。

Our next question comes from Alex Poon with Morgan Stanley.

下一個問題來自摩根士丹利（Morgan Stanley）的 Alex Poon。

My first question is related to your 4 focus in 2021 on quality, content, products and supply chain. If we have to quantify these, how should we think about the domestic revenue growth between 2019 and 2021, considering there is also outbound demand returning to being converted into domestic demand? My second question is related to your operating margin level in 2021. Is it possible to maintain a 20% non-GAAP operating margin in 2021 without outbound business? And also considering the competition and some of the cost savings could reverse and also the user acquisition -- new user acquisition strategy not only in Tier 1, 2 cities, but also lower-tier cities.

我的第一個問題與你們 2021 年的四大重點——品質、內容、產品與供應鏈——有關。如果要量化這些，我們應如何看待 2019 年到 2021 年之間的國內收入成長，考量到部分出境需求回流並轉化為國內需求？第二個問題與你們 2021 年的營業利潤率水準有關。在沒有出境業務的情況下，2021 年是否可能維持 20% 的 non-GAAP 營業利潤率？同時也考量到競爭、部分成本節省可能回轉，以及用戶獲取——新用戶獲取策略不僅在一、二線城市，也包括低線城市。

With regard to the 2021 guidance, due to the very short booking window, it's very difficult for us to provide a full guidance. However, the general picture will be we believe there's still uncertainties as we get into the new year, assuming COVID-19 will still be under good control in China and our domestic business shall sustain that recovery trend next year. But the international travel environment at this moment is very challenging. However, with the effective vaccine and the treatment for the COVID-19 on the way, hopefully, there will be some picking up on the international travel business toward the second half, starting from -- towards the second half of next year.

關於 2021 年的指引，由於預訂窗口非常短，我們很難提供完整指引。不過整體而言，我們認為進入新的一年仍存在不確定性；假設 COVID-19 在中國仍能得到良好控制，我們的國內業務明年應可延續復甦趨勢。但目前國際旅行環境非常具挑戰。不過，隨著有效疫苗與 COVID-19 治療方案逐步到位，希望國際旅行業務在明年下半年能有所回升，從——朝著明年下半年開始。

With regard to our margins. Our company will stick to a very lean and efficient operations. But at the same time, we always -- we strongly believe that continuously, given the huge market potential globally in the travel space, there's huge growth opportunities. So we -- our first priority is to continuously gaining market share. We will keep investing in the key business fundamentals, as James and Jane explained earlier. For example, the product, the technology as well as the service -- global service capabilities to make sure that we are in the best position to capture the opportunities in the travel market globally.

關於我們的利潤率。我們公司將堅持非常精實且高效率的營運。但同時，我們一直——我們堅信，鑑於全球旅遊市場巨大的潛力，仍存在巨大的成長機會。因此，我們——我們的首要任務是持續提升市占率。我們將持續投資於關鍵的業務基本面，正如 James 和 Jane 先前所說。例如產品、技術以及服務——全球服務能力，以確保我們處於最佳位置，把握全球旅遊市場的機會。

Therefore, of course, we have a very healthy margin is the target we are going continuously to focus, but gaining market share at this moment, we still think is a more important priority. Thank you.

因此，當然，我們也會持續關注並以維持非常健康的利潤率為目標，但在此刻，我們仍認為提升市占率是更重要的優先事項。謝謝。

Your next question comes from Tianxiao Hou with T.H. Capital LLC.

下一個問題來自 T.H. Capital LLC 的 Hou Tianxiao。

Congratulations on a good quarter. So one thing is really about the outlook, it's not near term, but rather, if you look up to 2021. So a lot of Chinese people start to plan their international trip. So one thing, I haven't read some news about the search inquiries and has been -- travel for compared with before. So I wonder from your data, how do you see -- what do you see about people's enthusiasm about the traveling in the middle or second half of next year? How many people are starting to plan their trip? So maybe that can give us some indication about how how big the international travel recover can be? That's my question.

恭喜本季表現不錯。我想問的是關於展望，不是短期，而是看向 2021 年。很多中國人開始規劃國際旅行。我看到一些新聞提到搜尋查詢量以及——與之前相比的旅行情況。所以我想從你們的數據來看，你們如何看——你們看到人們在明年年中或下半年對旅行的熱情如何？有多少人開始規劃行程？也許這能給我們一些指標，判斷國際旅行復甦可能有多大？這是我的問題。

Thanks for your question. First of all, for domestic travel, we are quite confident because in Q3, China led the recovery economically by delivering a full 1% plus GDP growth. As long as our economy is in a recovering trend, the domestic travel will keep up with a very healthy growth. Secondly, in 2021, we are hopeful that every government will put the concerted efforts to make sure the vaccine is being injected and the improvement for the control of pandemic will be an improving trend. When we look at our search results, the international search for our sites have already recovered 100% year-over-year. So I think people have been locking down within the borders and the desire to travel abroad is very strong.

謝謝你的提問。首先，對於國內旅行，我們相當有信心，因為在第三季，中國在經濟復甦方面領先，實現了超過 1% 的 GDP 成長。只要經濟處於復甦趨勢，國內旅行就會保持非常健康的成長。其次，2021 年我們希望各國政府能共同努力，確保疫苗接種推進，並使疫情控制的改善呈現持續向好的趨勢。從我們的搜尋結果來看，我們網站的國際搜尋量已經年比恢復 100%。因此我認為，人們長期被限制在國境內，出國旅行的意願非常強烈。

However, we really need to make sure two things: one is the healthiness of the population is ascertained. So until the vaccine is taken, many people will be careful to make sure wherever they travel, they're protected. Secondly, also the scientists and we should make consensus as to when and where quarantine is required for the countries that have demonstrated their ability to control the pandemic, there are high hope for these countries to start with travel bubble. But for the countries that have not demonstrated their ability to control the pandemic, customers will be very careful in terms of whether they travel into these regions.

然而，我們確實需要確保兩件事：第一是要確認民眾的健康狀況。因此，在接種疫苗之前，許多人在出行時都會格外謹慎，確保無論去哪裡旅行都能受到保護。第二，科學界以及我們也應就何時、何地需要隔離達成共識。對於已展現出控制疫情能力的國家，我們對其率先啟動「旅遊泡泡」抱有很高期待；但對於尚未展現出控制疫情能力的國家，消費者在是否前往這些地區旅行方面會非常謹慎。

And also lastly, weather, when they return to their home country, whether the quarantine is required. If the quarantine is required. Then again, a lot of people will not have such a long time to stay at home. So all these factors need to be taken into consideration when we really take people aboard. But so far, we expect good news on the science field with the government's concerted efforts to contain this virus. We are hopeful to see recovery gradually under the way.

另外最後一點是，當他們返回本國時，是否需要隔離。如果需要隔離，那麼同樣地，很多人沒有那麼長的時間待在家裡。因此，在我們真正讓旅客登機之前，必須把所有這些因素納入考量。但到目前為止，在政府齊心協力遏制病毒的努力下，我們期待科學領域傳來好消息。我們有信心看到復甦將逐步展開。

Your next question comes from James Lee with Mizuho.

下一個問題來自瑞穗（Mizuho）的 James Lee。

My first question is for Jane. Maybe can you talk about some of the government policy that you're seeing that will be driving domestic travel demand? And maybe international travel demand, you seem to be pretty enthusiastic about Green Lane for international travel last quarter. I was wondering just any update from that perspective? And also for Cindy, it seems like the OPI guidance is a little bit lower than what we've seen from the Street consensus here. And can you talk about maybe some of the investments that you plan to step-up in 4Q?

我的第一個問題想請教 Jane。你能否談談你所看到、將推動國內旅遊需求的一些政府政策？以及國際旅遊需求方面，上季你似乎對國際旅行的「綠色通道」（Green Lane）相當樂觀，我想了解從這個角度是否有任何最新進展？另外也想請教 Cindy，看起來你們對 OPI 的指引略低於市場一致預期。你能否談談你們計畫在第四季加大投入的一些投資項目？

Sure. Thanks for your question. Let me address your question in two parts. First of all, for domestic China, I think travel represents 10% of the GDP growth and approximately 10% of the job opportunity. So our government is very supportive to revital the travel industry. Policies have been put in place. And the domestic infrastructure is also there for people to travel to not only for the top popular -- most popular travel destinations, but also have lots of exploration in the new travel destinations, which is very good in the long run for domestic travel. Secondly, for international government, I think every government we have talked to are very eager to receive Chinese tourists. Because not only they bring the buying power into the region, but also it creates job opportunities at the local level. So every travel bureau, we have worked with also very much like to market their countries and for their popular travel destinations. And recently, we launched the campaign with the Singapore government to rediscover Singapore. And we work with them on different initiatives to stimulate the interest so that when the vaccine is ready, we will be able to promote different destinations to address the increasing demand for the Chinese outbound customers.

好的，謝謝你的提問。我分兩部分回答。首先，就中國國內而言，我認為旅遊業約占 GDP 成長的 10%，也約占就業機會的 10%。因此，我們政府非常支持振興旅遊產業，相關政策已經到位。同時，國內基礎設施也已具備，讓人們不僅能前往最熱門的旅遊目的地，也能探索許多新的旅遊目的地，從長期來看這對國內旅遊非常有利。第二，就國際方面而言，我認為我們接觸過的各國政府都非常渴望接待中國遊客，因為他們不僅能為當地帶來消費力，也能在地方層面創造就業機會。因此，我們合作過的各地旅遊局也非常希望行銷其國家及熱門旅遊目的地。近期我們也與新加坡政府推出「重新發現新加坡」的活動，並與他們在不同倡議上合作以刺激興趣，讓我們在疫苗準備就緒時，能夠推廣不同目的地，以滿足中國出境旅客日益增加的需求。

So again, we are positive in terms of working with the government around the world and promote these travel destinations when the vaccine is ready, when the safety for our customers is ascertained.

因此，再次強調，當疫苗準備就緒、且我們能確認客戶安全無虞時，我們對於與全球各國政府合作並推廣這些旅遊目的地持正面態度。

Yes. For the second question, the fourth quarter is normally a low season, slow season for the travel industry. Especially this year, we noticed some cases in some of the cities, including major cities like Shanghai, which will also have some negative impact on our business in the fourth quarter. And on the other hand, starting from the second half of third quarter, we noticed very strong rebound nationally, led by the government. So as James and Jane explained, we will continuously to make investment in our core competencies to make sure that we are in the best position to capture the market growth opportunity.

是的，關於第二個問題，第四季通常是旅遊業的淡季、慢季。尤其是今年，我們注意到一些城市（包括上海等主要城市）出現了一些病例，這也會對我們第四季的業務造成一定的負面影響。另一方面，從第三季下半段開始，在政府帶動下，我們看到全國出現非常強勁的反彈。因此，正如 James 和 Jane 所說，我們將持續投資於核心能力，確保我們處於最佳位置以把握市場成長機會。

Your next question comes from Brian Gong with Citi.

下一個問題來自花旗（Citi）的 Brian Gong。

Congratulations on solid results. So I have another question for competition. We are also seeing some content platforms like (inaudible) and (inaudible) Some travel products are being sold via their content. Given their specialization on contents, do you see them as a stride to OTA industry?

恭喜取得穩健的業績。我還有一個關於競爭的問題。我們也看到一些內容平台，例如（聽不清）和（聽不清），透過其內容在銷售一些旅遊產品。鑑於他們在內容方面的專長，你是否認為他們正在進軍 OTA 產業？

Thanks for your questions. With all these partners, we are very open to collaborate with all the partners in the ecosystem. For (inaudible), our product is inserted in their platform. So where you see you have booking capability, a lot of them is linked to our website and empowered by us. So again, we want to make sure the quality of our product and the service of the product is the best in the industry. And when customers see these content, whether on our side or whether it's in the other ecosystem, they will come back to Trip.com to make their reservation because our service is the best in the industry.

謝謝你的提問。對於所有這些合作夥伴，我們非常開放，願意與生態系中的各方合作。以（聽不清）為例，我們的產品被嵌入在他們的平台上；因此當你看到具備預訂功能時，其中很多都連結到我們的網站並由我們提供支援。再次強調，我們希望確保我們的產品品質與服務水準是業界最佳。當客戶看到這些內容時，無論是在我們的平台上，或是在其他生態系中，他們都會回到 Trip.com 進行預訂，因為我們的服務是業界最好的。

Your next question comes from Binnie Wong with HSBC.

下一個問題來自匯豐（HSBC）的 Binnie Wong。

Congrats on a strong quarter and excited to see the positive growth in your domestic business. Can you share the structural cost savings that Ctrip has achieved for this year? And how these can be extended into future years? In other words, every year, the business is -- I mean, the industry is recovering, how do you think like our margins and what are the structural cost savings that can be locked into 2021?

恭喜本季表現強勁，也很高興看到你們國內業務出現正成長。你能分享攜程今年已實現的結構性成本節省有哪些嗎？以及這些如何延伸到未來年度？換句話說，隨著每年業務——我是說，產業——逐步復甦，你認為我們的利潤率會如何表現？以及有哪些結構性成本節省可以延續並鎖定到 2021 年？

Thank you, Binnie. In the third quarter, with the continued recovery of our domestic business, we adjusted the spending across all the major expense line items accordingly. Therefore, our non-GAAP costs and operating expenses decreased 47% year-over-year, thanks to our largely flexible cost and expenses structure and efficient operating management. Total non-GAAP costs and operating expenses increased 23% from the second quarter as a result of our recovery customer demand. The non-GAAP sales and marketing expenses increased 75% Q-on-Q as our domestic travel demand rebounded and non-GAAP product development expenses increased 12% Q-on-Q as our personnel expenses normalized with the recovery of domestic business. And non-GAAP G&A expenses decreased 9% sequentially, mainly due to a decrease in our bad debt provision, which was partially offset by restructuring costs in certain subsidiaries.

謝謝你，Binnie。第三季，隨著我們國內業務持續復甦，我們相應地調整了各主要費用項目的支出。因此，我們的非 GAAP 成本與營運費用年減 47%，這得益於我們高度彈性的成本與費用結構以及高效的營運管理。由於客戶需求回升，非 GAAP 總成本與營運費用較第二季增加 23%。隨著國內旅遊需求反彈，非 GAAP 銷售與行銷費用季增 75%；隨著國內業務復甦、人員費用回歸正常，非 GAAP 產品研發費用季增 12%。非 GAAP 一般及行政費用則環比下降 9%，主要因壞帳準備減少，但部分被某些子公司重組成本所抵銷。

Going forward, as I explained before, we -- to achieve a very healthy margin definitely is one of the key goals for the management team. However, we still see with the strong recovery, starting from China domestic business, we still see huge growth opportunities, both domestic as well as international markets. So our top priority is to further investment in our core competencies to make sure that we'll capture the growth opportunities.

展望未來，正如我之前所說，實現非常健康的利潤率無疑是管理團隊的關鍵目標之一。然而，隨著強勁復甦（首先從中國國內業務開始），我們仍然看到巨大的成長機會，涵蓋國內與國際市場。因此，我們的首要任務是進一步投資於核心能力，確保我們能夠把握成長機會。

That does conclude the question-and-answer session. I'll now hand back to Michelle Qi for closing remarks.

問答環節到此結束。接下來我把時間交回給 Michelle Qi 作結語。

Thanks to everyone for joining us today. You can find the transcript and webcast for today's call on investors.trip.com. We look forward to speaking with you on our fourth quarter 2020 earnings call. Thank you, and have a good day.

感謝各位今天參與。我們今天電話會議的逐字稿與網路直播可在 investors.trip.com 查閱。我們期待在 2020 年第四季財報電話會議上再與各位交流。謝謝，祝各位有美好的一天。

Thank you very much.

非常感謝。

That does conclude our conference for today. Thank you for participating. You may now disconnect.

我們今天的會議到此結束。感謝各位參與。您現在可以斷線。