Trip.com antitrust probe exposes the hotel pricing paradox

How platform-driven discounting is undermining hotel profitability despite record travel demand

China’s hotel sector is seeing record travel volumes but deteriorating room yields, a contradiction many operators attribute to pricing pressure from Trip.com Group Ltd. Hoteliers allege that frequent discount campaigns and opaque ranking rules force them to cut rates to remain visible on the dominant platform. These practices are now central to a Beijing antitrust probe examining whether Trip.com has abused its market position. The investigation has already weighed on the company’s shares and reignited debate about platform power versus supplier sustainability.

Key takeaways

• Record demand, falling yields: Despite a strong post-pandemic travel rebound, hotel revenue per room in China stagnated in 2025, contrasting with gains across other Asian markets, according to Bloomberg Intelligence.
• Platform-driven discounting: Hoteliers report near-constant promotional pressure, with required price cuts of 15% or more to maintain visibility on Trip.com’s booking platforms.
• Antitrust focus on market power: Regulators are probing whether Trip.com’s dominance—estimated at about 56% of China’s online travel market—has led to deflationary pricing and eroded sector profitability.
• Exclusivity under scrutiny: Complaints center on “pick-one-of-two” arrangements that allegedly restrict top-tier merchants from listing on rival platforms, limiting competition and pricing autonomy.
• Weak performance for global brands: Major hotel groups have also felt the impact, with Marriott International Inc. reporting declines in China room revenue and Hilton underperforming regional peers.
• Oversupply amplifies pressure: Rapid capacity expansion and cautious consumer spending have intensified price competition, forcing hotels to prioritize occupancy over margins.
• Visibility tied to lowest price: Operators say failure to offer the lowest rates on Trip.com can result in reduced search rankings or traffic penalties, reinforcing a race to the bottom.

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Read also China opens antitrust probe into Trip.com

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