Chinese online travel giant Trip.com has booked RMB 3.2 billion (USD 448 million) in revenue for the second quarter of 2020, indicating a sharp drop of 64% year-on-year (YoY) and 33% compared to Q1. The domestic tourism market, however, shows strong momentum of recovery, as China’s Golden Week is approaching.
In the quarter ending June 30, Trip.com generated RMB 1.3 billion (USD 178 million) from accommodation reservations, down 63% YoY, but up 9% QoQ. Ticketing revenue decreased by 66% YoY and 52% compared to Q1 to RMB 1.2 billion (USD 163 million). The Packaged-tour business only generated 130 million (USD 18 million), representing a 88% YoY decline and a 75% drop QoQ. Corporate travel revenue was RMB 162 million (USD 23 million), a 47% YoY decrease, and a 29% increase for the quarter.
“The global travel industry continued to experience significant impact as a result of the ongoing COVID-19 pandemic,” said executive chairman James Liang, who started promoting the firm’s products via livestreaming. “On a promising note, we have seen all of our domestic business lines recover to varying degrees during the quarter,” he said.
CEO Jane Sun was glad to see that reservations for domestic flights and hotels reached “a level of full recovery.” The upcoming Golden Week should bring further relief to the coronavirus-hit travel industry, as the pandemic is largely under control in China. There’s an abundance of promotions on online platforms. Nationwide, more than 1,500 tourist districts offer free tickets or discounts and local governments at more than 20 provinces and cities have sent out travel coupons.
According to Trip.com’s estimates, 600 million people will travel during the eight-day holiday starting October 1. Domestic flight trips between October 1 and 8 are expected to reach more than 15 million, up 10% from last year, as per data from online travel booking site Qunar.
In Q2, Trip.com recorded a net loss of RMB 476 million (USD 67 million), compared to last year’s RMB 403 million and RMB 5.4 billion (USD 79 million) in the previous quarter. The company reported that it held RMB 64.3 billion (USD 9.1 billion) in cash as of June 30.
For the third quarter, net revenues are expected to decrease by approximately 47% to 52% YoY, from last year’s RMB 10.5 billion (USD 1.5 billion).