Why Chinese Online Travel Platform Trip.com’s $18 Billion Rally May Have More Room To Grow

Even as an economic slowdown dampens domestic consumer spending, China’s travel boom shows no signs of abating thanks to adventure-seeking millennials, says Jane Sun, 56, CEO of online travel bookings platform Trip.com. “If you ask young people today in China, what is their number one priority, everyone will tell you travel is number one,” she says in an interview on the sidelines of the recent Forbes Global CEO Conference in Bangkok. “Covid has changed people’s mindset.”

Chinese travelers are forecast to spend 1.8 trillion yuan ($250 billion) this year on international trips, up 42% from the previous year and surpassing the pre-pandemic level of 1.7 trillion yuan in 2019, according to the World Travel and Tourism Council. Travel demand in the world’s second largest economy has been resilient due to a fundamental shift in the spending habits of young Chinese after experiencing lockdowns during the Covid-19 pandemic, says Sun, who was included in Forbes Asia’s list of Emergent Businesswomen in 2018.

Rising demand for airline tickets and hotel bookings has boosted Trip.com’s bottomline, with the company’s net profit jumping almost 50% year-on-year to 6.8 billion yuan in the third quarter to September as revenue rose 16% to 15.9 billion yuan.

Looking ahead to 2025, Sun says she has reasons to be optimistic, noting that Chinese tourists are showing growing interest in some long-haul destinations including Australia and South Africa, in addition to their favorite tourist hot-spots such as Japan, Singapore and Thailand. People are also willing to explore more remote and lesser-known domestic destinations, she adds. For instance, the previously unknown industrial city of Zibo in Shandong province saw a sudden tourist influx last year, thanks in part to its cheap barbecue skewers.

Trip.com’s robust earnings growth drove up its shares to an all-time high in October; the stock is up about 80% so far this year, boosting the company’s market value by $18 billion to $41 billion and making it one of the best performers in the Nasdaq Golden Dragon China Index.

A once-fierce price war with local services giant Meituan, which offered coupons and subsidies against hotel bookings made on its sites, has abated, says Billy Qi, a Shanghai-based analyst at research firm 86Research. Qi adds that the share price of Trip.com may have room to rise further as it currently trades at a price-to-earnings ratio of 22.6 times on the Nasdaq, trailing the 34.5 times PE ratio of U.S. rival Booking Holdings.

Kai Wang, a Hong Kong-based analyst at Morningstar, who considers Trip.com to be fairly valued at current levels, said earnings growth in 2025 and beyond would justify a further uptick in shares. He adds that travel is one of the sectors he prefers, as it won’t be directly impacted by the escalating China-U.S. trade war with President-elect Donald Trump’s threat of higher tariffs.

Sun says she has other ideas to draw customers. The company, which was founded 25 years ago, plans to add more event-related products, such as music concerts. She cites Taylor Swift’s sold-out Eras Tour covering Australia, Japan and Singapore which drew tourists in droves to those countries.

“We will continuously innovate,” Sun says. “As long as customers need the products, we add the products.”