Trip.com Swings to Loss on Antitrust Fine as Lock-In Model Unravels

Trip.com faces a forced shift in its business structure following punishment for violating anti-monopoly law. It booked a one-time 5.179 billion yuan in fines and confiscations in the second quarter of 2026, swinging to a quarterly net loss of 2.4 billion yuan. Net profit for the first half fell 99.55% year on year. According to reporting by Huang Qingchun of Huxiu, the penalty has undermined the price management system that underpinned the company’s high profitability. While recovering holiday demand and growth in inbound travel to China are softening the impact, weakness in its core domestic business is becoming clear.

Earnings released just before National Day and performance over the combined Mid-Autumn Festival and National Day holidays painted a mixed picture. Cross-province travel orders during the holidays rose 45% year on year. The share of long-distance travel orders rose 3% overall. Day tour orders for inbound travel to China increased about 300% year on year. Ticket orders grew more than 220%, while rail ticket orders grew more than 170%. The company faces a phase where deteriorating finances coexist with an on-the-ground recovery.

Long-Distance Demand Recovers Over the Holidays

During the extended holidays combining the Mid-Autumn Festival and National Day, Trip.com saw a clear upturn in long-distance travel demand. Cross-province travel orders increased 45% year on year. The proportion of long-distance travel in the total also rose 3%. The figures show that wider-ranging travel is strengthening again.

Chartered-car travel emerged as new demand. Orders departing from Beijing increased 75% year on year. Orders for scenic areas such as Aba in Sichuan doubled. Preference for small-group trips with flexible itineraries continues.

County-level travel and travel around provincial borders also performed well. Orders for Zhaotong, on the Yunnan-Guizhou-Sichuan border, rose 95% year on year. Hezhou, on the Guangxi-Hunan-Guangdong border, rose 88%. Ganzhou, on the Jiangxi-Guangdong-Hunan-Fujian border, rose 70%. Touring across administrative boundaries lifted regional demand.

Antitrust Penalty Hits Q2 Results Directly

Just ahead of the National Day holidays, Trip.com released its second-quarter 2026 results. Revenue was 15.66 billion yuan, up only 6% year on year. It fell 3% quarter on quarter, with growth slowing. Booking the full 5.179 billion yuan in fines and confiscations in the current period weighed heavily.

Quarterly net profit swung to a loss of 2.4 billion yuan. First-half net profit plunged 99.55% year on year. Excluding confiscations, second-quarter net profit was about 2.7 billion yuan, remaining in the black. Even so, it declined year on year. Adjusted EBITDA was 4.565 billion yuan, down about 300 million yuan year on year.

According to reporting by Huang Qingchun of Huxiu, the finalization of the fine in July and an administrative guidance meeting in September are linked. Meituan, TikTok, Tongcheng, Fliggy and others attended the meeting. It reflects a shift in regulation of online hotel reservations from case-by-case enforcement to systematic management. The view is that the boundaries of competition have become even clearer.

System Behind Price Controls Being Dismantled

What the penalty decision called into question was control of prices and sales channels through traffic allocation. At its core was a tiered partnership system of special brand, gold brand and non-brand stores. Exclusive conditions were not left in written contracts but entrusted to verbal coordination by sales staff. Effectiveness was ensured through skewed allocation of search visibility and traffic.

Special brand stores signed master distribution agreements in exchange for top-priority exposure. They provided pre-secured inventory of no less than 15% and bore commissions of 12% to 15%. They were also required not to offer core rooms to competitors. Gold brand stores promised the lowest price across the internet and were required to sell at prices at least 5% lower than other channels. Commission rates were 10% to 12%. Non-brand stores received no traffic support and were required to guarantee they would not set prices higher than other sales channels.

Tools known as price adjustment support and listing support were also used together. A back-end price comparison mechanism constantly checked public prices across all sales channels. If Trip.com prices were found to be higher, price cuts were forced through the tools. Traffic restrictions and deductions from order deposits were combined as punitive measures. It was a system to ensure strict enforcement of the lowest prices.

Price adjustment support was suspended in March this year. At the end of July, the special brand and gold brand systems were fully terminated. Existing partner stores are gradually shifting to a new cooperation framework. The ranking algorithm for display order was also revised, giving greater weight to user reviews, service quality, product competitiveness, past conversion rates and other factors. At the heart of the new framework is returning authority to partner stores. Hotels themselves decide the number of partners and prices by sales channel, returning inventory and pricing authority to operators. Chief Financial Officer Wang Xiaofan acknowledged that some volatility in the domestic business is unavoidable.

Accommodation and Transport Ticketing

Revenue Falter

By segment, core accommodation reservation revenue was 6.576 billion yuan. That was up 6% from 6.225 billion yuan a year earlier. This includes a negative revenue adjustment of 122 million yuan related to rectification. It reflects refunds of order deposits to partner stores. Excluding this, real growth was about 8%. The figure includes rapid growth in international business, with growth even lower for domestic accommodation alone.

Transportation ticketing revenue was 5.35 billion yuan, down 1% year on year. It was down 12% quarter on quarter. High crude oil prices and geopolitical conflicts weighed on air ticket demand. A slowdown in transportation, the entry point for travel demand, could spill over to downstream accommodation and itinerary products. The long-standing pattern has been for users to move from air or rail tickets to accommodation. Disruption at the entry point affects the entire traffic base.

Rigidity on the cost side is also squeezing profits. Second-quarter sales and marketing expenses were 3.8 billion yuan, up 15% year on year. That far outpaced the 6% increase in revenue. Management cited investment in global expansion as the reason. Increased promotions amid intensifying domestic competition are also a factor that cannot be ignored.

Declining commission rates are also in focus. Third-party research shows the overall commission rate for domestic accommodation fell slightly after rectification. CITIC Securities estimates that each 1% decline in the commission rate would affect adjusted net profit for 2026 by about 10%. The collapse of a system that generated profits without effort is changing the earnings equation.

Inbound Travel Emerges as Second Growth Driver

Inbound travel to China, which Trip.com positions as its second growth curve, surged during the holidays. Day tour orders increased about 300% year on year. Admission ticket orders grew more than 220%, and rail ticket orders grew more than 170%. More than 60% of inbound visitors came from Asian markets. Russia rose more than 90% year on year, and the United Kingdom rose more than 60%. Malaysia and Singapore increased 40% to 50%. Shanghai, Beijing, Guangzhou, Shenzhen and Chengdu were the most chosen destinations for inbound visitors.

Despite growth, structural weaknesses remain. Foreign-language support is advanced in major eastern cities but weak in the west. Nighttime consumption options are scarce, making it difficult to extend stays. Marketing budgets are far smaller than those of international giants. Continued investment in multilingual systems and localized operations is needed, and returns will take time.

Changes in the competitive environment are also affecting the inbound business. After exclusive restrictions were lifted, hotels operating across multiple channels became the norm. Meituan is now in a position to penetrate the high-end accommodation market. TikTok is strengthening its loop from video-driven discovery to completed transactions. Each company is expanding investment, and competition for market share is set to intensify. The focus of OTA competition is shifting from locking up resources to service and efficiency. For multi-step purchases such as flight changes and refunds and coordination with hotels, reliability of service influences preferences.

AI Travel Assistance Competition Turns Homogeneous

AI is becoming a basic capability across the industry. Orders assisted by TripGenie increased about 400% year on year. This shows widening use of itinerary creation and booking assistance. Meanwhile, Fliggy, Tongcheng and even Doubao have launched similar AI travel services. Features are converging, making it difficult to build a unique barrier to entry.

Trip.com’s challenge is whether it can differentiate through reliability of service. Hotels are being freed from studying the ranking rules of a single channel. There is a move to refocus on refining products and managing members. Multiple hotel operators say their autonomy in business decisions has increased. What channels provide is no longer just orders, but overall operational capabilities including revenue management, dynamic pricing and member operations. Capability symbiosis is beginning to define the relationship between OTAs and hotels.

Editorial Opinion

On short-term impact. Lower commission rates for domestic accommodation and higher sales and promotion expenses will pressure profits over the next three to six months. Partner migration will continue until the revised display algorithm takes hold, and volatility in the domestic business will remain. Growth in inbound travel will continue to provide support, but improving monetization efficiency will be the focus.

On the long-term view. Over the next one to three years, inbound travel and AI assistance will become pillars of growth. For the inbound business, expanded multilingual support and nighttime consumption will lift spending during stays. For AI, differentiation will come through reliability in completing bookings and handling disruptions. Competition without lock-in is likely to work to improve service quality.

Questions from the editors. The question is whether lower commission rates can be offset by service quality and operational efficiency. Amid homogenization of AI, what will determine user choice is also an issue. Can post-regulation OTAs return to a business of trust. Whether the fruits of inbound demand can be spread to regional areas also needs verification.

References

• “ 携程被打回原形了？ “, by 黄青春 — 虎嗅网, 2026-10-06T23:07:07.000Z (ARR)
• Source URL: https://www.huxiu.com/article/4893107.html?f=rss