After the regulatory storm, what will Ctrip (09961) rely on for its "second growth spurt"?

Ctrip (09961) is quietly weathering the storm. According to Huxiu, during the extended holiday period combining Mid-Autumn Festival and National Day, Ctrip's long-haul travel orders increased their overall share by 3%, while cross-provincial travel orders grew 45% year-on-year. Among these, chartered car tours emerged as a new hotspot, with Beijing orders surging 75% year-on-year, and orders to scenic destinations like Aba in Sichuan doubling. At the same time, county-level tourism and inter-provincial border tourism were booming, with order growth rates year-on-year reaching 95%, 88%, and 70% for Zhaotong (at the Yunnan-Guizhou-Sichuan border), Hezhou (at the Guangxi-Hunan-Guangdong border), and Ganzhou (at the Jiangxi-Guangdong-Hunan-Fujian border), respectively. It is worth noting that inbound tourism, which Ctrip views as its second growth curve, performed even more strongly. During the dual holidays, day tour order volume surged nearly 300% year-on-year, ticket orders grew over 220%, and train ticket orders increased over 170%. Among these, the Asian market contributed over 60% of orders, with Russia growing over 90% year-on-year, the UK over 60%, and Malaysia and Singapore growing 40%-50%. Shanghai, Beijing, Guangzhou, Shenzhen, and Chengdu were the top preferred destinations for inbound tourists. This palpable recovery seems to be overshadowing the shadow of antitrust penalties. On the eve of the National Day holiday, Ctrip released its Q2 2026 financial report. The 5.179 billion yuan antitrust fine was fully accounted for in the quarter, directly driving the quarterly net loss to -2.4 billion yuan, with first-half net profit plummeting 99.55% year-on-year. In Huxiu's view, the landing of Ctrip's penalty in July and the industry administrative guidance meeting in September, jointly participated by Meituan, Douyin, Tongcheng, Fliggy, and others, formed a echo, marking that regulation of the online hotel booking industry is shifting from case-by-case enforcement to systematic governance, and further clarifying the competitive boundaries in the online hotel booking sector. In particular, after the regulatory hammer cracked Ctrip's core business model that supported high profits, can the new narrative of globalization + AI really support Ctrip's second growth spurt? The collapse of a system for easy money Perhaps the public's understanding of Ctrip's monopoly still "choose one of two." Details disclosed in the regulatory penalty decision show that Ctrip built a system to control hotel pricing power and channel selection rights through traffic allocation. The industry-criticized "special card - gold card - no card" tiered cooperation system is quite covert: exclusivity requirements never appear in written contracts, relying entirely on verbal negotiations by business managers, with the core bargaining chip being the platform's traffic favoritism. Specifically, this mechanism is designed in three stages: Special card hotels can obtain the highest priority exposure and traffic support, at the cost of signing a general distribution agreement, providing no less than 15% reserved rooms, bearing 12%-15% commissions, and their core room inventory must not be listed on competitor platforms; Gold card hotels must promise the lowest price across the entire network, with selling prices at least 5% lower than other platforms, corresponding to a 10%-12% commission rate; Non-card merchants receive no traffic support but must still ensure that prices on Ctrip are not higher than any other channel. In addition, regulatory documents also mention "price adjustment assistant," "listing pass," and backend price comparison systems: the platform compares hotel public pricing across all channels in real time. Once it finds that Ctrip's price is higher, it can directly force a reduction through tools, supplemented by traffic restrictions, deduction of order reserve funds, and other punitive measures to ensure the rigid implementation of the lowest price. Therefore, the regulatory penalty is intended to break through this tiered control system and dismantle the competitive barriers built by price controls. In March this year, Ctrip took the "price adjustment assistant" offline; at the end of July, the special card and gold card cooperation systems were fully terminated, and existing merchants gradually migrated to a new cooperation framework. According to Huxiu, Ctrip's hotel ranking algorithm has now been adjusted, with factors such as consumer feedback, service quality, product competitiveness, and historical conversion rates receiving higher weight. The core of the new model is returning power to merchants, meaning hotels can independently choose the number of cooperation platforms, independently decide pricing strategies for each channel, and fully return inventory and pricing power to operators. For Ctrip, this is equivalent to declaring the end of the era when exclusive agreements locked in resources, and industry competition returns to the essential logic: whoever can bring more orders to merchants and provide better service to users will win cooperation. In this regard, Ctrip CFO Wang Xiaofan admitted that during the process of hotel partners migrating to the new operating model and market practices being readjusted, domestic business will inevitably experience "certain fluctuations." Multiple hotel practitioners told Huxiu that hotels no longer need to give up other channels to preserve traffic favoritism from a single platform; nor do they need to passively lower prices or participate in involuntary promotions when platform rules are adjusted. The autonomy of business decisions is truly increasing. It should be noted that in the past, hotel operators spent a great deal of energy studying the ranking rules and activity requirements of a single platform, while core actions such as product refinement and membership operations were marginalized. Now, the operational focus of hotels is returning to service itself, and the long-diluted independent operating capability will once again become the core competitiveness of hotels. This also marks that the relationship between the hotel and travel industry and OTA platforms is shifting from traffic allocation to capability symbiosis: what the platform outputs is no longer just orders, but also a whole set of digital operating capabilities such as revenue management, dynamic pricing, and membership operations. Moreover, after the lifting of exclusivity restrictions, multi-platform operation by hotels will also become the industry norm. Meituan can further penetrate the high-star hotel market, Douyin connects content seeding with transaction closed loops, and various platforms continue to increase investment, making market competition even more intenseand the shift in OTA competition focus from resource locking to service and efficiency is precisely the original intention of regulatory governance. However, a reshuffling of the landscape only changes the redistribution of market share. The essence of OTA is still a trust business. From flight refunds and changes to hotel coordination, in high-ticket, long-chain travel consumption, users still tend to choose platforms with higher service certainty. A torn fundamental picture The market generally believes that the 5.179 billion yuan fine is only a one-time book impact, and how much Ctrip's main business is affected remains to be seen; but the negative impact has already appeared in the Q2 financial report. During the period, Ctrip's total revenue was 15.66 billion yuan, up slightly 6% year-on-year and down 3% quarter-on-quarter, with growth clearly slowing compared with the previous quarter. By business segment, accommodation reservation revenue, the first pillar, was 6.576 billion yuan, up 6% from 6.225 billion yuan in the same period last year; this included a 122 million yuan revenue offset brought by rectification (refunding merchant order reserves), and the actual growth rate after excluding it was about 8%. It is worth noting that this 8% growth includes the rapidly growing international business. If the domestic accommodation segment is separated out, the growth rate would be even lower. Second, transportation ticketing revenue, which has traffic gateway value, was 5.35 billion yuan, down 1% year-on-year and down 12% quarter-on-quarter, mainly affected by factors such as high oil prices and geopolitical conflicts suppressing air ticket demand. At the same time, rigid growth on the expense side is continuously squeezing profit margins: Q2 sales and marketing expenses were 3.8 billion yuan, up 15% year-on-year, significantly higher than the 6% revenue growth rate. Management attributed this to global expansion, but the incremental marketing investment forced by intensifying domestic competition should not be ignored either. In Huxiu's view, the value of Ctrip's traffic lies in the rigid demand for travel. Users first buy air tickets and train tickets, then convert to hotel and vacation bookings. This is a commercial closed loop it has operated for many years. Now that growth at the entrance has declined or even turned negative, pressure will inevitably gradually transmit to downstream businesses, creating cracks in the entire traffic foundation. Even after excluding the 5.2 billion yuan fine, Q2 net profit was about 2.7 billion yuan, which appears to still be in a profitable range, but it has already declined year-on-year; adjusted EBITDA was 4.565 billion yuan, down about 300 million yuan year-on-year. At the same time, changes in commission rates have also become a focus of market attention. Third-party research shows that after rectification, the comprehensive commission rate for domestic hotels has been lowered to some extent; CITIC SEC estimates that for every 1% reduction in commission rate, Ctrip's adjusted net profit in 2026 will be affected by about 10%. In view of this, the real big test is actually in the third quarter. At the end of July, the new model was fully switched over. Under the new rules, changes in revenue growth, commission rates, and profit margins will all truly land. Before that, any conclusion about Ctrip's fundamentals is premature. So, is Ctrip's moat still there? Objectively speaking, the brand awareness, user travel habits, huge supply chain system, and mature fulfillment and after-sales capabilities accumulated over more than 20 years are all real competitiveness. The vast majority of hotels will still regard Ctrip as their largest source of online orders and will not voluntarily abandon this channel because of a penalty notice. However, the thickness of the moat has been greatly reduced, and Ctrip must step out of its comfort zone of easy money and re-adapt to the rhythm of earning hard money. Fortunately, Ctrip still has a sufficient cash safety cushion. As of the end of June, the company's cash and cash equivalents, short-term investments, and other items totaled about 100.5 billion yuan, with ample capital reserves; moreover, continuous share repurchases since 2025 have supported the stock price, and the pace of repurchases accelerated in the first two quarters of this year. In short, the 5.2 billion yuan fine really hurt Ctrip, and it also brings downward pressure on commission rates, upward pressure on marketing expenses, and weak domestic demand. Ctrip will need time to digest these pressures. Can it achieve a second growth spurt through inbound tourism and AI? Facing the transformation pains of its domestic business, Ctrip told two growth stories on its earnings call: inbound tourism and AI. First, inbound tourism. With visa-free policies landing this year, Ctrip was among the first to benefit from this wave. In Q1 2026, visa-free foreign arrivals accounted for 77.9%; in Q2, the inbound tourism business continued to maintain high double-digit year-on-year growth, with 118,000 hotels and over 3,600 scenic spots receiving inbound orders. Growth in lower-tier markets was particularly significant: in the first half of the year, the number of hotels in third-, fourth-, and fifth-tier cities receiving inbound orders increased 38.3%, 46.2%, and 47.9% year-on-year, respectively, all higher than the overall growth rate of 33.6% for platform hotel merchants. During the Mid-Autumn and National Day holidays, inbound day tour order volume surged nearly 300% year-on-year, ticket sales grew over 220%, and train ticket sales increased over 170%, seemingly becoming Ctrip's second growth curve. However, the industry pain points of inbound tourism are precisely Ctrip's growth bottleneck. First, foreign-related services in first-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen are basically up to standard, but when extending to third- and fourth-tier cities and the central and western regions, hotels generally lack foreign-language service staff, scenic spots lack standardized multilingual signage and commentary, and even basic reception needs are difficult to meet. Ctrip tries to attract traffic by having leading cities radiate to surrounding areas, but the coverage is very limited and cannot fundamentally change the inbound tourism pattern of "strong east, weak west; strong cities, weak countryside." Second, in international tourism cities such as London and New York, performance revenue generally accounts for more than 15% of total tourism revenue, while most domestic outdoor live performances are presented only in Chinese, lacking full English commentary and subtitles, and there are very few nighttime consumption scenarios for foreign tourists. Liang Jianzhang also admitted that domestic daytime tourism activities are already relatively rich, but there is still huge room for improvement in foreign-related services for nighttime performances, dining, and leisure scenarios. Finally, the Tourism Authority of Thailand has an average annual special publicity budget of 200 million US dollars, while China's official tourism publicity budget is still at the tens of millions of US dollars level. Although Ctrip has elevated Trip.com's brand investment to a strategic height, even exceeding domestic market investment, there is still an order-of-magnitude gap when facing the tens-of-billions-of-dollars-level marketing investment of European and American giants such as Booking and Expedia. Of course, the core issue ultimately comes down to monetization efficiency. The operating costs of inbound tourism are far higher than domestic tourism. Multilingual service systems, global call centers, and localized marketing all require huge infrastructure investment, and the return on investment cycle is long. For many years, Ctrip has continued to invest resources in overseas customer acquisition and domestic supply reception capacity: On the supply side, it promotes multilingual adaptation of hotels and merchant training, and has worked with nearly 300 scenic spots to deploy multilingual ticket sales and collection equipment, connecting the entire chain of booking, payment, and ticket collection for foreign tourists; On the product side, it encourages destinations to develop vacation products such as cultural experiences and performances, helping more merchants connect to the consumption chain of international tourists; In inbound tourism brand marketing, it invited Jackie Chan to serve as the global promotion ambassador for Chinese tourism and promote Chinese destinations to the international market. These investments may not quickly quarterly profits, but they are the foundation for long-term growth. Now let's look at international business. In Q2, Trip.com revenue grew more than 50% year-on-year, with Asia-Pacific as the core growth engine, while Europe and the Americas achieved faster growth from a low base. Management said brand profit margins have improved significantly, meaning the unit economics of the international business are getting better, but the financial report did not disclose specific data on when the international business can achieve scaled profitability. Moreover, in markets such as Southeast Asia and Europe, Ctrip still has to face fierce competition from local platforms such as Agoda and AirAsia Travel. AI is another card Ctrip has played. Ctrip says it is applying AI across all scenarios, including travel inspiration, search, itinerary planning, multilingual services, customer service, and merchant operations. According to Huxiu, orders assisted by TripGenie grew about 400% year-on-year, and nearly 60% of interactions are already related to bookings, covering hotels, flights, and attractions; the intelligent shopping guide system handles 80% of pre-sales consultations, significantly reducing service costs and improving response efficiency. However, AI is becoming a basic capability in the OTA industry. Fliggy launched "Fliggy Bangbang," Tongcheng integrated "Chengxin AI" with DeepSeek, and even Doubao launched full-scenario travel services before the National Day holiday. Users can complete air ticket booking, train ticket purchase, ride-hailing, and route navigation and other travel needs in one stop through Doubao. For example, users can say "book me a ticket from Beijing to Shanghai tomorrow" or "call a car to Capital Airport," and Doubao can automatically identify the intent and complete the corresponding service call without repeatedly switching between multiple apps. In summary, no one can predict in advance how the market landscape will ultimately be reshuffled. What is certain is that the old era of easy money is over, and Ctrip must go out and fight for territory again. This article is reprinted from the WeChat public account "Huang Qingchun Channel." GMTEight editor: Zhao Jinbin.