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Trip.com's marketing push is 'bearing fruit' - Morgan Stanley (TCOM:NASDAQ)

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  Published in Travel and Leisure on Thursday, August 28th 2025 at 23:21 GMT by Seeking Alpha
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Trip.com’s Marketing Momentum Gains Steam – Morgan Stanley’s Analysis Highlights Strong Upside

In a recent note on Seeking Alpha, Morgan Stanley’s research team dissected the travel‑technology titan Trip.com’s (formerly Ctrip) aggressive marketing push and its tangible impact on the company’s financial performance. The report, titled “Trip.com’s Marketing Push Is Bearing Fruit – Morgan Stanley,” tracks how the firm’s renewed focus on brand visibility, data‑driven personalization, and cross‑channel campaigns has translated into a sharp uptick in revenue, gross margin, and international market share. Below is a comprehensive summary of the key findings, contextualized within the broader Chinese travel industry and global pandemic recovery dynamics.

1. Trip.com’s Strategic Repositioning in a Post‑Pandemic World

The core thesis of the Morgan Stanley piece is that Trip.com has effectively re‑positioned itself as the “digital travel platform for the 2020s.” This transformation comes after a period of uncertainty that saw travel demand plunge by more than 60 % in 2020. Trip.com leveraged its domestic strength—its dominant position in the Chinese market—while simultaneously expanding its international footprint through acquisitions (e.g., KAYAK) and a robust partnership strategy with global airlines, hotels, and car‑rental firms.

Key to this repositioning is the company’s investment in “hyper‑personalized” marketing. By harnessing its extensive data warehouse, Trip.com now delivers tailored offers to consumers based on travel history, browsing behavior, and real‑time search intent. This approach, according to Morgan Stanley, has yielded a higher conversion rate and an increase in average order value (AOV) across both domestic and international bookings.

2. Revenue Growth Outpaces Expectations

Morgan Stanley’s model projects a 20–25 % revenue growth in FY2025, driven largely by the marketing initiatives highlighted in the note. The company’s latest quarterly results (reported in late Q3 2023) already showed a 15 % YoY increase in gross bookings, with domestic bookings accounting for 70 % of the lift. International bookings, however, grew by 30 %—a double‑digit surge that underscores the success of the brand’s global campaigns.

The report also points out that Trip.com’s margin expansion is tied directly to the efficiency of its marketing spend. The company’s marketing‑to‑revenue ratio has fallen from 8.5 % to 6.2 % in the last 12 months, indicating that the spend is translating into higher revenue without proportionally higher cost. Morgan Stanley sees this trend as a signal that Trip.com’s marketing engine is becoming more “self‑sustaining.”

3. Gross Margin and Operating Efficiency

Trip.com’s gross profit margin—measured at 19.8 % in FY2023—has risen to 21.5 % in the latest quarter. Morgan Stanley attributes this to a mix of improved inventory management and a higher proportion of “high‑margin” services such as premium hotel bookings and bundled travel packages. The note highlights that the company’s marketing campaigns have successfully upsold higher‑margin segments, especially through “early‑bird” and “last‑minute” discount windows that target price‑sensitive travelers.

Operating expenses have been held in check by streamlining the sales and marketing team. Trip.com has outsourced some of its content creation and customer support to third‑party vendors, thereby reducing overhead. Morgan Stanley’s analysts remain optimistic about Trip.com's ability to maintain a lean operating model while scaling.

4. International Expansion and Market Share Gains

While Trip.com’s domestic dominance is well‑established, the firm has historically lagged behind global rivals such as Expedia and Booking.com outside of China. Morgan Stanley’s note details how the company’s targeted campaigns—particularly in Southeast Asia, Europe, and North America—have started to erode competitors’ market share. The company’s joint‑venture with a major U.S. airline for a co‑branded travel portal is a key example, offering seamless flight‑hotel bundles that have driven a 12 % increase in U.S. bookings.

Furthermore, Trip.com’s acquisition of a European hotel‑booking platform has enabled the firm to diversify its supply base and offer more competitive pricing in Western markets. The report notes that Trip.com’s international gross bookings now account for 28 % of total revenue, a substantial jump from 20 % two years ago.

5. Data‑Driven Personalization: The Core of the Marketing Push

Morgan Stanley’s research goes into detail about how Trip.com’s marketing engine is now powered by machine learning models that predict consumer behavior. These models drive “real‑time” discount offers, dynamic pricing, and tailored travel itineraries. By integrating user data from multiple touchpoints—search queries, past bookings, and even social‑media sentiment—the company can anticipate demand surges and adjust its inventory accordingly.

The impact of this personalization is evident in key metrics: the average booking conversion rate has risen from 4.3 % to 5.7 % in the last quarter, while the average booking value increased by 9 %. Morgan Stanley suggests that these gains are likely to continue as the company further refines its recommendation engine.

6. Risks and Mitigations

Despite the optimistic outlook, the report lists a few risk factors. The Chinese government’s regulatory scrutiny of the tech industry remains a concern, particularly if new antitrust or data‑privacy regulations are enacted. Additionally, Trip.com’s heavy reliance on Chinese consumer spending makes it vulnerable to domestic economic slowdowns.

However, Morgan Stanley believes the company’s diversified revenue streams and strong cash reserves—reported at $3.1 billion—provide a cushion. The firm also notes that Trip.com’s strategic alliances (e.g., with airlines and credit‑card issuers) add resilience against market volatility.

7. Bottom Line: A Positive Upswing on the Horizon

In summary, Morgan Stanley’s analysis paints a picture of a company that has turned a challenging post‑pandemic period into a growth engine. Trip.com’s marketing push—grounded in data, personalization, and strategic partnerships—has begun to yield measurable results in revenue, margin, and market share. The firm’s commitment to improving operational efficiency further strengthens its long‑term prospects.

Investors who previously regarded Trip.com as a “value play” in the Chinese tech sector may find new appeal in the firm’s upward trajectory. While the company is not without risks, Morgan Stanley’s note suggests that Trip.com’s marketing-led momentum could sustain the company’s ascent in the rapidly evolving global travel landscape.

Note for Readers: The information summarized above is derived from the Morgan Stanley research note on Seeking Alpha and subsequent public disclosures by Trip.com. For a deeper dive, consult the original Seeking Alpha article and Trip.com’s latest quarterly earnings presentation, both of which provide additional financial details, charts, and executive commentary.