(Yicai) Sept. 17 -- Trip.Com Group, a major Chinese online travel agency, has reported a net loss of CNY2.4 billion (USD361 million) for the second quarter of the year because of a CNY5.2 billion anti-monopoly penalty imposed by the Chinese market regulator.

Without the effect of the anti-monopoly penalty, net profit would have been CNY2.7 billion in the three months ended June 30, the Shanghai-based company said in its latest earnings report released on Sept. 15.

The State Administration for Market Regulation announced on July 25 that under Articles 57 and 59 of China’s Anti-Monopoly Law, it was imposing a CN5.2 billion penalty on Trip.Com for using traffic allocation rules to force hotels into exclusive deals and low-price parity. The penalty comprised a CNY3.5 billion fine, a CNY1.7 billion forfeiture of illegal gains, and a CNY122 million (USD18 million) refund to affected hotel operators.

"We fully accepted the regulator's decision, and we view the conclusion as a good opportunity to reinforce our core strategic path," said Jane Sun, Trip.Com's chief executive officer.

Revenue rose 6 percent to CNY15.7 billion (USD2.3 billion), while adjusted earnings before interest, taxes, depreciation, and amortization fell 6.1 percent to CNY4.6 billion, Trip.Com said.

By segment, revenue from accommodation reservations expanded 6 percent to CNY6.6 billion, while that from transportation ticketing fell 1 percent to CNY5.4 billion. Revenue from packaged tours and corporate travel rose 8 percent to CNY1.2 billion and 11 percent to CNY771 million, respectively.

The company expects some fluctuations in its domestic business in the short term, given partners' transition to its new operating model and adjustments in market operations.

Meanwhile, the international business remained an important growth source for Trip.Com. In the second quarter, revenue from its international platform increased over 50 percent from a year earlier, and revenue from inbound travel expanded at a high double-digit rate.

Asia Pacific remained the main driver of Trip.Com’s international business, while the European and American markets posted the fastest growth. In the first half of the year, the booking volume for first- and business-class tickets on Trip.Com increased over 70 percent from a year ago, and that for customized travel grew sevenfold.

Trip.Com plans to serve 200 million inbound tourists over the next five years and expand its international reach in terms of destinations, travel experiences, and local merchants, according to Sun.

Artificial intelligence was a key area of investment for Trip.Com in the second quarter, with AI-assisted orders via TripGenie surging fivefold from the same period last year, with nearly 60 percent of interactions related to bookings.

Capital expenditure related to AI will increase in the short term, but it will primarily focus on application development and model fine-tuning, rather than on building large-scale foundational models from scratch, Trip.Com said, adding that long-term incremental investments will likely remain manageable.

Trip.Com’s shares [HKG: 9961] were trading down 1.9 percent at HKD317 (USD40.40) as of 2.55 p.m. in Hong Kong today, after rising 3.9 percent yesterday. Its New York-listed stock [NASDAQ: TCOM] advanced 3 percent to USD40.43 yesterday.

Editor: Futura Costaglione