Hotel reservations in China have surpassed pre-pandemic levels since late June, booking site Trip.com said Thursday.
Trip.com shares briefly fell by more than 7% Thursday in Hong Kong trading, before recovering slightly to close 4.5% lower. New York-listed shares dropped 8.5% lower overnight, but were up 2.5% in extended trading.
“Overall our domestic China hotel reservation on our platform quickly rebounded and [have] surpassed pre-Covid levels from late June,” Cindy Xiaofan Wang, chief financial officer at Trip.com, said during an earnings call Thursday morning.
“Total domestic hotel bookings was around 20% higher than 2019 level in July, and we continued to grow over the 2019 level in August and achieved hyper growth versus 2021,” she said.
That growth came despite continued sporadic lockdowns and travel restrictions across China to control Covid outbreaks. Tens of thousands of tourists were stranded in the resort area of Hainan province in August due to Covid control measures that canceled transportation off the island.
Staycations drove much of the summer travel increase.
Trip.com said that in the latest quarter, same-city hotel reservations grew by 30% compared with 2019 levels.
However, Wang said the number of domestic air passengers “was down by 70% to 80% versus the 2019 level in recent weeks.”
Trip.com reported second-quarter revenue of 4.01 billion yuan ($572.9 million), topping expectations of 3.58 billion yuan, according to FactSet. Revenue from accommodation reservations and transportation ticketing both beat estimates from FactSet.
However, overall revenue in the second quarter marked a 32% decline from the same period a year ago, and a 2% decline from the prior quarter. The company said the drop was “primarily due to the continued disruptions resulting from the Covid-19 resurgence in China.”
International business boom
For the China-based company, its international offerings proved to be a bright spot.
“The growth in Trip.com was mainly driven by the strong recovery of international flights, and we are happy to see such momentum continued in Q3,” Wang said, noting such air ticket bookings in July were near 90% of 2019 levels.
In the second quarter, same-country hotel bookings outside China quadrupled versus 2019 levels, she said.
By region, revenue from Europe and American markets has already surpassed 2019 levels, Wang said.
Much of the world has relaxed many Covid travel restrictions, while China has maintained a stringent, so-called dynamic zero-Covid policy.
Source: CNBC
