Skift Take
Chinaâs population is aging fast, but these seniors arenât slowing downâtheyâre leveling up their travel game and spending big on mid- to high-end trips. Companies like Trip.com are taking note. As more seniors chase unique, quality experiences, you can bet other travel companies will want a piece of the action too.
Chinaâs senior travelers are changing the game in the travel industry. Trip.com Group reported that these users have spent over RMB 1.6 billion ($224.6 million) on its platform so far. To cater to this demographic, the company launched the Old Friends Club last quarter, targeting those aged 50 and above.
China has one of the fastest growing ageing populations in the world. The population of people over 60 years old in the country is projected to reach 28% by 2040.
âIn 2023, group tours were popular among seniors,â said Jane Sun, CEO and director of Trip.com Group, at the earnings call on Tuesday. âBut in 2024, weâre seeing a move towards customized tours. Seniors now want quality and new experiences.â
To help older travelers, Trip.com introduced a âfamily cloudâ feature. This allows younger, tech-savvy family members to help their elders plan trips and book travel using their phones.
As Chinaâs economy grows, senior travelers are spending more on mid to high-end travel. âThis group is no longer about budget travel. Theyâre looking for mid to high-end experiences and more unique and quality experiences,â said Sun.
Trip.com sees this as a key area for growth. âWe see great potential for future business with this demographic,â Sun added. âWeâre committed to meeting their changing needs.â
Younger Travelers Embrace Entertainment-Plus-Travel
The largest OTA in China isnât just focusing on seniors. It is also tapping into the younger generation’s love for entertainment and travel. This approach is paying off, with gross merchandise value from these products rising by more than 70% year-over-year.
âTo reach more people, weâve rolled out these products across our global platform in six major Asian markets,â Sun said.
Trip.com Groupâs net revenue grew by 14% year-over-year in the second quarter, with hotel reservations by Chinese travelers up by around 20%. The Asia Pacific region was the strongest performer, contributing over 70% to the group’s total revenue.
For the second quarter of 2024, Trip.com Group reported a net revenue of RMB 12.8 billion ($1.8 billion), representing a 14% increase from the same period last year and a 7% increase from the previous quarter.
Continuing on its mobile-first strategy, currently more than 65% of transactions on Trip.comâs international OTA platform are conducted through mobile. In Asia, this figure climbs even higher to around 75%.
Outbound Travel Rebounds Strongly
Outbound travel continues to drive growth in the second quarter of this year. Trip.com noted that international flight capacity has returned to about 75% of pre-pandemic levels. During the quarter, outbound hotel and air ticket bookings hit 100% of 2019 levels, outpacing the industry average by 20% to 30%, Sun said.
Bookings soared to over 120% of 2019 levels during the May Labor Day Holiday and over 110% during the Dragon Boat Festival. The Asia-Pacific region remains the top choice for Chinese travelers, with visa-free destinations like Singapore, Thailand, and Malaysia seeing strong demand.
In Northeast Asia, a favorable exchange rate has made Japan and Korea more attractive, with notable increases in bookings. Long-haul destinations are also gaining popularity, thanks to better visa processing and events like the Euro Cup and Olympics. Trip.com noted that travel to Europe surged by over 100% year-over-year this summer.
Total outbound flight capacity has recovered to nearly 80% of 2019 levels this summer with Chinese airlines showing even higher recovery rates, said Xiaofan Wang, Trip.com Groupâs chief financial officer.
New flight routes have significantly boosted interest in specific destinations, doubling search volumes in just three months, said James Liang. Trip.com Groupâs chairman and co-founder.
Inbound Travel on the Rise
Trip.com Group also noted that inbound travel to China is on the rise, with a 200% surge in bookings in the first half of 2024 compared to last year.
Inbound travel now accounts for more than 25% of Trip.comâs international OTA platformsâ revenue.
Visa-free entry policies and growing interest in cities like Beijing, Shanghai, Guangzhou, and Shenzhen are driving this trend. Inbound travel to China from countries that have been extended visa-free entry saw a 190% surge at Trip.com.
Within China, domestic travel remains strong as more travelers explore lesser-known Tier 2 and 3 cities. To support this, Trip.com has partnered with 27 cities to boost local tourism, Sun said. âWe are also collaborating with 22 local airports to form a marketing alliance, aimed at enhancing connectivity between regional and mainland China,â she said.
AI-Powered Innovation
The travel company is embracing AI to change how people travel. The company aims to help users “plan less and travel more” by using advanced tech.
During the earnings call, the group used digital versions of its executives, Liang and Sun, to present its second-quarter insights.
âThis choice hints at exciting future applications in live streaming shows and other scenarios, demonstrating the versatility and transformative potential of digital human technology,â Liang said.
Liang highlighted that AI at Trip.com Group isnât just for show â itâs about making operations smoother and giving customers a better experience. By using AI, Trip.com can offer more personalized and consistent interactions, which they believe will lead to more innovation and value for users.
The company sees AI as a game-changer for the travel industry. âWe are committed to harnessing the power of AI and unlocking its full potential,â Liang said.
