Trip.com Group, China’s largest value-based online travel platform, will remain focused on the domestic market as Covid-19 travel restrictions continue to block virtually all Chinese overseas tours , announced the co-founder and president of the company.
James Liang told the South China Morning Post that the platform’s domestic travel booking volume this year was 70-80% of pre-Covid levels, but cross-border travel services, which accounted for 20% of total activity before the pandemic, remain close to zero.
âWe have to plow the domestic market deeply,â Liang said.
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Tourism, which accounts for around 10% of China’s national economy, is one of the sectors hardest hit by the coronavirus epidemic.
China’s rigid border controls and strict quarantine requirements for anyone returning from overseas – 14 days of hotel quarantine plus seven days of home quarantine is the minimum – have effectively ended international tourism.
China’s outbound tourism was booming before Covid-19, with 155 million Chinese traveling abroad in 2019, a 3.3% increase from 2018.
At the same time, Liang said the mini-outbreaks of Covid at home and the zero-tolerance approach imposed by local authorities, which typically includes a travel ban for weeks at a time, have made the market Chinese domestic tourism very volatile.
âJuly was really good and August too, but the situation turned south in September and October,â Liang said.
The Chinese government has shown little intention to change its zero-Covid strategy or relax international travel bans, especially after the emergence of the Omicron variant. National Health Commission director Ma Xiaowei said on Wednesday that the country would continue with its existing approach to “consolidate results that have not been easy.”
Meanwhile, pressure is building on companies like Trip.com, which depend on bookings for airline tickets and hotel rooms. The Nasdaq-listed company, which had a secondary listing in Hong Kong in April, is expected to release its third quarter results on December 16.
In the second quarter, the company reported a “strong recovery” in its domestic activities, according to results released in September. Net revenues during the period were up 86% from a year ago thanks to a rebound in domestic travel, but the industry has been on a bumpy trajectory since then.
Trip.com’s main competitor Tongcheng-Elong this week announced a 1.3% year-over-year increase in revenue for the third quarter, while profits fell 8.7% due to mini- Covid-19 outbreaks in places like Nanjing.
Liang said the best hope for ending the Covid-19 pandemic is for the virus to be treated like “another flu”.
Regarding the Chinese government’s support for the private economy, Liang said he was confident that would not change.
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