How Trip.com Came to Control 70% of China's Online Hotel Market

What Is This About?

One company controls approximately 70% of China's online hotel booking market by gross merchandise value. Trip.com Group — through its own platform, its controlled subsidiary Qunar, and its largest-shareholder stake in Tongcheng Travel — holds a level of market concentration that is rare even by the standards of China's notoriously winner-take-all internet economy. Meituan holds roughly 20%, Fliggy (Alibaba) 5–7%, and Douyin around 3%.

For context: Meituan's food delivery share peaked at around 70% — but only briefly, before a price war eroded it. No single e-commerce platform in China commands more than 40% of its market. Trip.com's dominance in online travel has proven more durable than almost any comparable platform position in the country.

This article explains why.

Why the Travel Sector Is Structurally Different

Online travel is not like food delivery or e-commerce. Its structural properties make it unusually resistant to disruption once a dominant player is established.

Travelers use one platform; hotels must use all of them. Oxford economist Mark Armstrong identified this dynamic in a 2006 paper on two-sided markets, coining the term "competitive bottleneck": consumers tend to commit to a single platform, while suppliers are compelled to list everywhere. This asymmetry means platform competition concentrates on winning consumers — not on offering better terms to suppliers. Commission rates do not fall as competitors enter; if anything, the revenue take from hotels has increased as Meituan, Douyin, and Fliggy have joined the market.

Travel is a high-intent, infrequent purchase. Unlike food delivery, where habit and proximity drive daily repeat behavior, travel bookings are deliberate and research-intensive. Users who trust a platform's inventory depth, pricing, and customer service tend to stay loyal across trips. This makes early trust-building disproportionately valuable.

The full-service bundle creates its own moat. Trip.com sells flights, train tickets, hotels, and packaged tours in a single app. This is structurally different from Western OTAs: Booking Holdings and Expedia spend 30–50% of revenue on Google to acquire traffic. Trip.com generates travel-intent traffic organically through its ticketing business — users come to buy a train ticket and stay to book a hotel room.

How Trip.com Makes Money and Why the Numbers Are Unusual

Trip.com's economics look paradoxical on the surface. Its blended commission rate was 4.4% in 2024 — less than one-third of Booking's 14.3%, Expedia's 12.3%, or Airbnb's 13.6%. Yet its operating margin reached 26.6% in the same year, roughly on par with those global peers. For comparison, Meituan's core local commerce segment — covering food delivery, in-store dining, and travel — posted a 20.9% operating margin in what was its best-ever profit year.

Several structural factors explain this:

• Ticketing as a loss-leader. Approximately 35% of Trip.com's revenue comes from flight and train ticket sales — a segment that generates almost no profit. China's civil aviation system abolished agent commissions around 2015, replacing them with per-ticket handling fees. An economy domestic fare earns the platform roughly RMB 7–8 in base fees; ancillary products (insurance, lounge access, fast-track security) bring the average per-ticket revenue to around RMB 23. The ticket business exists to pull users into the ecosystem, not to generate margin.
• Hotel advertising as the profit engine. When supply exceeds demand, hotels must compete for visibility. China had roughly 280,000 hotels at the end of 2022. In the following two years, approximately 39,000 and 45,000 new properties opened respectively. The post-pandemic consumption rebound did not sustain: by the first half of 2025, Beijing hotels were averaging monthly profits of around RMB 6,000 — down 93% year-on-year, following a 32% decline the year before. Hotels with empty rooms cannot afford to stay off the platform. They pay for advertising, accept lower prices, and compete for algorithm-driven traffic. This is the structural condition that makes Trip.com's margin possible.
• Premium segment dominance amplifies economics. Trip.com does not merely lead in volume — it leads in value. In the first half of 2025, Meituan led only in rooms priced below RMB 200 per night. Trip.com was the volume leader at every higher price tier. For luxury rooms above RMB 1,000 per night, Trip.com's booking volume was close to five times the combined total of Meituan, Fliggy, and Douyin. Higher-priced rooms generate higher absolute commissions and advertising spend.

How Trip.com Built Its Position: A Compressed History

Phase 1: The phone-call era (pre-2012). Trip.com was founded the same year as Alibaba (1999) and listed in the U.S. in 2004. For its first decade, it operated largely as a telephone booking service. Its Nantong call center, completed in 2010, was one of the world's largest, with 12,000 planned seats. This was not seen as a weakness at the time — corporate travel was growing steadily, price-insensitive business travelers were the core customer, and competition was limited.

Phase 2: Near-death and consolidation (2012–2015). Three challengers arrived simultaneously: eLong (backed by Expedia) offered hotel cashback; Qunar (backed by Baidu) aggregated all flight agents and undercut Trip.com on airfares; and smaller players attacked niche segments. Trip.com's stock fell roughly 75% over about 14 months. In March 2013, founder James Liang returned as CEO, restructured internal incentives, launched a price war, and raised capital through bond issuance. The decisive structural advantage: competitors had incomplete product suites. eLong had abandoned flights and lacked traffic. Qunar led on flights but flights don't generate margin — it couldn't subsidize a hotel war the way Trip.com could cross-subsidize with hotel profits. After two years of cash burn, Trip.com acquired stakes in eLong and Tongcheng, then in October 2015 executed a share swap with Baidu to gain majority voting control of Qunar. Qunar was folded into the Trip.com ecosystem as a budget-focused sub-brand.

Phase 3: Digital transformation and consolidation (2015–2019). The price war forced a complete digital rebuild. Trip.com evolved from a call-center operation into a full-service mobile app. More capable potential challengers — Meituan and Alibaba — were simultaneously occupied with larger battles.

Phase 4: Post-pandemic profit harvest (2023–present). Trip.com's revenue grew approximately 40% from 2023 to 2025, rising from RMB 44 billion to RMB 66 billion. Operating profit grew at a similar rate, from RMB 11.3 billion to RMB 15.8 billion. By the end of 2025, Trip.com's operating profit of nearly RMB 15.8 billion ranked it seventh among all Chinese internet companies — ahead of JD.com and Baidu.

Why Challengers Failed to Dislodge It

Each major platform that could have challenged Trip.com faced the same structural problem: travel was never their primary battlefield.

Meituan built the largest hotel booking volume in China by room-nights before the pandemic — but almost entirely through local consumption traffic. These were low-priced, last-minute, walk-in-style bookings from users already on the Meituan app for food or entertainment. In 2017, Meituan launched a standalone travel app to compete directly with Trip.com for corporate travelers and upscale hotels. It was shut down within a year. By the time Meituan went public in 2018, its stated strategy had shifted to "Food + Platform." Travel became a component of its local services business, not a standalone priority. In 2025, Meituan's plan to expand into mid-to-upscale hotels was indefinitely shelved due to the food delivery price war it was forced to fight.

Alibaba's Fliggy took a structurally different approach: rather than building its own hotel supply relationships, it positioned itself as a "second official website" for hotel brands — allowing Marriott, Hilton, and others to manage their own storefronts on the platform. This brought in inventory and corporate bookings but gave Fliggy no pricing power. Users attracted by Marriott Bonvoy or Hilton Honors loyalty programs came for the brand, not for Fliggy. The platform never developed a standalone user base with genuine loyalty to the OTA itself.

Douyin entered hotel bookings through short-video content and live-streaming commerce. A significant portion of its hotel room sales actually flow through Trip.com and Tongcheng inventory. Its model generates impulse purchases rather than planned travel bookings, limiting its ability to capture the high-value corporate and premium leisure segments.

The common thread: over two decades, every platform with the resources to challenge Trip.com — Alibaba defending e-commerce and building cloud; Meituan fighting for food delivery and instant retail — consistently chose to fight a different war. Travel never received the sustained capital, headcount, or organizational focus required to close the gap.

The Hotel Industry's Failed Counterattack

China's hotel chains have repeatedly tried to reclaim direct booking control, with limited success.

In 2014, Huazhu, Home Inn, and Jinjiang jointly pressured OTAs to stop deep-discount promotions. In 2018, Huazhu and others launched "disconnect-private-reconnect" campaigns, cracking down on franchisees who bypassed the brand's own booking systems to list rooms on OTAs independently.

By 2024, China's four largest domestic hotel groups had achieved central reservation rates (direct bookings through brand websites, apps, and mini-programs) of 50–66%: Huazhu at 66.4%, Atour at 63.5%, Jinjiang at 56.9%, and BTG Homeinns below 50%. Smaller brands, independent hotels, and guesthouses remain far more dependent on OTA traffic.

The structural disadvantage is historical. Western hotel loyalty programs had decades to mature before OTAs emerged. Marriott's loyalty program had been running for 16 years before Expedia spun out of Microsoft in 1999. Today, Marriott and Hilton each generate billions of dollars annually just from selling loyalty points to co-brand partners. China's hotel industry began its modern commercial development roughly in parallel with the rise of OTAs — there was no window to build comparable loyalty infrastructure first. Several of Trip.com's own co-founders went on to build China's largest hotel chains: Ji Qi founded Home Inn, then left to found Huazhu; Atour's founder Wang Haijun left Huazhu and received early investment from Trip.com itself.

As hotel supply surged and occupancy rates fell from 2024 onward, even the chains that had fought hardest for direct bookings began losing ground. Franchisees, facing empty rooms and fixed costs, increasingly bypassed brand pricing guidelines to list discounted inventory on OTAs. "OTA field sales staff would walk up to hotel front desks and say: give me one promotional room and I'll drive you some traffic," the founder of Shang Mei Group told us.

The Pricing Mechanism Under Regulatory Scrutiny

Trip.com's commercial architecture includes a tiered merchant cooperation system introduced in 2016, classifying hotels into three tiers ("Special Gold," "Gold," and unranked) with commissions ranging from roughly 10% to 20%. Higher tiers received exclusive cooperation agreements, preferential traffic weighting, and guaranteed room allocation in exchange for higher commissions and, until recently, exclusivity.

A separate tool — the "price adjustment assistant" — automatically lowered a hotel's listed price on Trip.com whenever the system detected the same property offering a lower rate on a competing platform. Meituan and Fliggy deployed similar tools. The result for hotels listed across multiple platforms: a cascading price race to the bottom, with some merchants reporting that the tool could not be disabled or would reactivate automatically after being turned off.

Chinese regulators found the exclusive dealing provisions of the Special-Gold tier to be in violation of competition rules and imposed penalties. Trip.com subsequently removed mandatory exclusivity clauses. Notably, approximately half of the roughly 4,000 formerly exclusive "Special" tier merchants chose to remain Trip.com-exclusive even after the requirement was lifted — reflecting that Trip.com's organic traffic volume is sufficient for some properties, and that the operational cost of managing listings across multiple platforms is non-trivial.

What Comes Next: Structural Pressures and Open Questions

Supply overhang. The hotel construction boom of 2023–2024 has created structural oversupply in many markets. When supply exceeds demand, pricing power shifts further toward whoever controls traffic distribution. This dynamic currently favors Trip.com. The question is whether a prolonged period of hotel losses will trigger industry consolidation or regulatory intervention before the platform's position is challenged.

The legitimacy question. As platform profits rise while merchant profitability falls, the sustainability of the current profit distribution faces scrutiny — commercial, regulatory, and social. As Beike founder Zuo Hui observed in 2020, large Chinese companies eventually face "a question of organizational legitimacy: beyond creating GDP and employment, what value does your organization actually provide?" This question is becoming more pointed as Trip.com's margins widen while hotels report near-zero or negative monthly profits.

Regulatory trajectory. The enforcement action against exclusive dealing provisions signals that regulators are watching. Whether further intervention targets commission rates, algorithmic pricing tools, or the structural relationship between Trip.com's affiliated entities (Qunar, Tongcheng) remains an open variable.

International expansion. Trip.com has been expanding aggressively in Southeast Asia and other outbound markets. Its international business is growing from a smaller base but represents a genuine diversification of the revenue mix. International hotels operate under different competitive conditions and may support different commission economics.

AI and search disruption. The long-term risk to any OTA is disintermediation — if AI-powered search or direct booking tools reduce the friction of bypassing platforms, the structural advantage of being a one-stop travel entry point could erode. This remains a medium-to-long-term variable rather than an immediate threat.

The Core Logic, Summarized

Trip.com's dominance is not primarily a story of a single brilliant strategic move. It is the accumulated result of several reinforcing structural conditions:

1. A full-service bundle (flights + trains + hotels) that generates organic travel intent without paid traffic acquisition
2. A hotel supply market that is structurally fragmented and increasingly oversupplied, giving the traffic-controlling platform leverage
3. Two decades during which every better-resourced potential challenger consistently prioritized a different market
4. A competitive dynamic in two-sided markets where platform competition benefits consumers without reducing supplier costs
5. A historical timing gap that prevented Chinese hotel chains from building the loyalty infrastructure that might have enabled meaningful disintermediation

The result is a 70% market share that has proven more durable than almost any comparable position in Chinese internet commerce — and a profit margin that, at this scale, has begun to raise questions that go beyond competitive strategy.

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