Ctrip.Com International Ltd (NASDAQ:CTRP) Q2 2019 Earnings Conference Call - Final Transcript

Sep 09, 2019 • 08:00 pm ET

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Ctrip.Com International Ltd (NASDAQ:CTRP) Q2 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. [Operator Instructions] Your first question comes from Thomas Chong from Jefferies. Please go ahead.

Analyst
Thomas Chong

Hi, good morning, James, Jane, Cindy and Michelle. Thanks for taking my question. Can you comment about the short-term as well as the long-term impacts of macro and industry headwinds. How would Ctrip mitigate such impact? Thanks.

Executive
Cindy Xiaofan Wang

Thanks.

Executive
James Jianzhang Liang

Yeah, thank you for the question. Yeah, we see bit of headwind in some of the Asian markets due to the difficult geopolitical situation. And I think these are the short-term impact as people will rearrange their plans to travel later this year and in future for their holidays. Overall, in the long run, I think particularly in Asia, we are still very positive, because China is still going to be the fastest growing -- one of the fastest growing large economies in the world and overall Asia is still going to be -- remain the fastest growing economically region in the world. And Ctrip with our strong presence in Asia, we are very well positioned to take advantage of that. So in the long run, we are still very positive about our growth prospect in China and internationally because Ctrip has a strong presence in the fastest growing Asian markets. Thank you.

Executive
Cindy Xiaofan Wang

Yeah, Thomas. So, for the next quarter, our four [Phonetic] customers impact -- potential impact of about 400 to 500 basis points on the growth rate, mainly due to the short-term macro uncertainties and industry headwinds, which mainly come from recent slowdown of Hong Kong and Taiwan, together with a slight price decrease. So in the first half of this year, outbound travel to Hong Kong and Taiwan accounted for about one-third of total Chinese outbound travelers. Therefore, we included some negative impact from these two markets in our Q3 guidance.

And in addition, based on the TravelSky report, average price of outbound air ticket dropped about 400 -- 750 basis points year-over-year in July, as a result of softer demand and macro uncertainties. However, in the mid to long-term as James said, not only the most comprehensive, extensive destination offerings, but also our expansion into the other global markets will help us to reduce or even mitigate risks from certain geographic uncertainties.

Therefore, we are still very confident that as long as we continue to invest in our product and services, Ctrip will able to further strengthen our market leadership and market positions in the China, not only the China market, but also the global travel market especially during the macro slowdown as we always achieved in the past 20 years. Thank you.

Operator
Operator

Thank you. Your next question comes from Binnie Wong from HSBC. Please go ahead.

Analyst
Binnie Wong

Hi, good morning management. Thank you for taking my question. My question is on outbound strategy. So is it become a more significant contribution to us, can you comment comment on, are we competing more on pricing, partnership with local partners or will be for more inorganic investments, just want to see how does it impact