Trip.com GroupTCOM

China's market regulator fined the company about 5.2 billion yuan, or 770 million dollars, for using its size to squeeze out competition. The agency found that Trip.com forced some hotels into exclusive deals and required them to offer their lowest prices only on its platform.

While the fine is large, the bigger concern for long-term owners is the required change to how the company operates. If Trip.com can no longer demand exclusive pricing or deals, it may lose some of the competitive edge that has kept its domestic market share above 50 percent. This ruling could make it easier for smaller rivals to win over travelers with better prices elsewhere.

Source: Reuters

Key highlights

• Growth slowdown expected: Management expects sales growth for the next quarter to slow to a range of 3% to 8%, which is a sharp drop from the 17% growth reported this quarter. This predicted slowdown comes from higher energy costs and local regulatory changes that are making the business environment more difficult.
• International demand surging: Bookings on the company's international platform jumped 65% compared to the same time last year. This rapid expansion helps the company diversify its business away from its home market in China while serving a broader global traveler base.
• Inbound travel momentum: Travel bookings from people visiting China surged 90% compared to last year, showing that international interest in Chinese destinations is recovering strongly. This segment is a key growth priority because it brings new global customers into the company's ecosystem.
• Profitability remains steady: The adjusted operating margin, which shows how much profit is kept from every dollar of sales after running costs, stayed at 30%. This is consistent with the 31% margin seen a year ago, proving the company can grow its international business without hurting its overall efficiency.
• Monopoly investigation launched: Chinese regulators began a formal investigation in January 2026 into whether the company is using its dominant position to unfairly block competition. While the outcome is unknown, the company warned that a negative finding could result in a significant fine or forced changes to how it operates.

Our take: This was a solid quarter for the current business, but the outlook is a major concern. While international growth of 65% is impressive, the warning that next quarter's revenue growth could sink to just 3% and the new monopoly investigation create significant uncertainty for the long-term case.