Visitors check information brochures at the Trip.com Group stand during an expo in Beijing. (Photo/China Daily)
Trip.com Group, China's largest online travel agency, reported higher-than-expected financial performance for the first quarter, and the strong results indicate resilient recovery of China's domestic tourism market.
Compared with the first quarter of 2019 before the outbreak of the COVID-19 pandemic, both domestic hotel and air ticketing reservations have fully recovered since early March and achieved double-digit growth, according to the company's latest earnings report released on Wednesday.
In the first quarter, Trip.com achieved sales revenue of 4.1 billion yuan ($628 million). During the period, its net profit reached 1.8 billion yuan, surging nearly 80 percent over the previous quarter, and the company has remained profitable for three consecutive quarters.
Earlier this year, a few waves of COVID-19 infections reemerged in some regions across China, and precautionary measures－including varying levels of travel restrictions and encouragement of reduced travel during the Chinese Lunar New Year－have reduced travel demand. But China's domestic travel rebounded quickly in March and showed even stronger momentum in April and May, said Trip.com Group.
"Quality leisure travel showed rapid growth, with reservations for mid range to high-end hotels spearheading growth. Meanwhile, long-distance travel in the Chinese mainland has fully recovered, and short-distance travel has shown a continuing growth trajectory," said Jane Sun, chief executive officer of Trip.com Group.
In the January-to-March period, Trip.com achieved accommodation reservation revenue of 1.6 billion yuan, transportation ticketing revenue of 1.5 billion yuan, package-tour revenue of 169 million yuan and corporate travel revenue of 252 million yuan, it said.
Trip.com made its secondary listing in Hong Kong on April 19, years after it debuted on the Nasdaq stock market in 2003. So far, the Hong Kong-listed stock has maintained its share price of HK$304.8 ($39.3) above the offering price since its IPO. Multiple institutions have raised the ratings of Trip.com before its quarterly earnings release.
Meanwhile, online travel platform Tongcheng-Elong said its first-quarter revenue hit 1.61 billion yuan, up 60.6 percent on a yearly basis. Its adjusted net profit in the period reached 300 million yuan, surging 279.5 percent year-on-year, according to its quarterly earnings report released this week.
The rapid demand increase from consumers who come from smaller cities helped fuel the growth of Tongcheng-Elong. In the first three months, about 60 percent of new consumers who made payments for travel products through WeChat came from third-tier and smaller cities, its data found.
"With the pandemic increasingly brought under better control in China and the country's efforts to drive domestic demand, China's tourism industry will fully explore its domestic resources to stimulate consumption and propel economic growth," said Luo Xiang, an analyst of the LeadLeo Research Institute, a market research provider.
"This year marks the centenary of the founding of the Communist Party of China. Tourism operators will further promote red tourism and launch more tours to explore the history of the CPC," he said.