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Chinese OTA giant faces tougher challenges in second quarter

05/30/2020| 11:55:21 AM| ChinaTravelNews 中文

International transportation accounts for 50% of Trip.com Group's total transportation revenue, so transportation will be more vulnerable to the COVID-19 impact than hotels will.

Trip.com Group reported that its accommodation revenue decreased 62% to USD 163 million, while transportation revenue was USD 338 million, down by 29%.

Chairman James Liang said during the earnings call that cancellation rate has stabilized in most markets by now and the company is seeing increasing new orders in many areas. 

But Trip.com Group faces tougher chanllenges ahead, as the company expect its net revenue to drop by 67%-77% for the second quarter, a bigger decline than the 42% decrease in the first quarter. 

For the second quarter, accommodation revenue will decrease 67% to 77% year-on-year, transportation revenue is expected to plummet 70% to 80%, and packaged tour business will decrease 80% to 90%, according to CFO Cindy Wang during the conference call.

So far, new reservations for domestic hotel reached over 70% compared with last year, while the price still is heavily discounted. The new reservation for international travel activities is still close to nothing for the full quarter, due to the strict international travel restrictions, especially for the China outbound business.

Ms. Wang said international hotel revenue accounted for 20% to 25% of the total accommodation reservation in the second quarter last year. 

The situation for Trip.com Group's transportation business is similar to the accommodation operation, with international travel activities still close to nothing due to the strict international travel restrictions, especially for Chinese outbound travel. 

But by contrast, international transportation accounts for nearly 50%, an even bigger share of the company's total transportation revenue, which means that the transportation business will be more vulnerable to the COVID-19 impact on international markets than accommodation will.

TAGS: Trip.com Group | accommodation | transportation revenue | covid19
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