Trip.com expects massive hit to first-quarter revenue but sees signs of early recovery in domestic travel
- Revenue for the first quarter could plunge by as much as half from last year
- An early rebound in its domestic travel booking points to a ‘quick and strong’ recovery, executives say
Trip.com Group, China’s largest online travel platform by market value, expects its first-quarter revenue to plunge by 45 to 50 per cent year on year, as the coronavirus pandemic takes a toll on the global tourism industry.
But there are green shoots of recovery. The company has seen an increase in domestic travel bookings in recent weeks, as China has largely brought the epidemic under control, executives said in a post-earnings conference call on Friday.
Trip.com reported an annual profit of 7 billion yuan (US$991 million) last year, a 536 per cent surge from the 1.1 billion yuan recorded in 2018.
“The beginning of 2020 has been challenging for the travel industry worldwide due to the coronavirus outbreak,” said chairman James Liang Jianzhang. “We are encouraged to see the successful containment in China … we expect a quick and strong recovery in domestic travel.”
Booking volume on its platform plunged to less than 20 per cent of the level in previous years after the coronavirus outbreak erupted in China in late January, but has now rebounded to over 30 per cent of normal levels in recent weeks for domestic travel bookings, according to chief executive Jane Sun Jie.
Meanwhile, over half of China’s domestic airlines have resumed flights and increased their ticket prices, even though the prices are still below normal. Local governments are also relaxing controls over residents’ movements and seeking help from Trip.com to promote their tourism products, Sun said.