Trip.com returns to profit in Q1 as China’s domestic travel recovers from pandemic

Chinese travel service provider Trip.com Group Ltd (TCOM, 9961) posted net profit attributable to shareholders of 1.8 billion yuan in the  first quarter of 2021, reversing net loss of 5.4 billion yuan the same period a year ago, as domestic travel rebounded strongly from the impact of Coronavirus pandemic.

Excluding share-based compensation charges and fair value changes of equity securities investments and exchangeable senior notes, non-GAAP net loss attributable to shareholders for the three-month period narrowed to 204 million yuan, from non-GAAP net loss of 2.2 billion yuan the previous year, it said in a statement.

Trip.com, which provides one-stop travel services, including accommodation reservation, transportation ticketing, packaged tours and corporate travel management, said revenue decreased 13% year-on-year in the first quarter to 4.1 billion yuan as the strong growth of domestic travel service in mainland China was partially offset by the reduction of cross-border travel affected by COVID-19. 

“Long-distance travel in mainland China has fully recovered, and short-distance travel has shown a continuing growth trajectory,” said Sun Jie, Chief Executive Officer of Trip.com Group, in the conference call on Wednesday.

However, net revenue was down 17% quarter-on-quarter as cross-border travel suffered heavily from travel restrictions. The re-emerged COVID-19 infections during the Chinese New Year this year also affected the company’s performance in January and February.

Accommodation reservation revenue for the quarter increased 37% year-on-year to 1.6 billion yuan and transportation ticketing revenue also increased 37% year-on-year to 1.5 billion yuan. But on a quarter-on-quarter basis, the revenue of the two services decreased 30% and 11%, respectively, due to the travel restrictions introduced by the Chinese government at the beginning of 2021.

“We will continue to see Trip.com Group transform from solely purchasing platforms to hubs of travel inspiration postings the best travel deals,” said Liang Jianzhang, Executive chairman of Trip.com Group, in the conference call, adding that they will put the successful measures in the domestic market such as live streaming and other technologies in preparation for the upcoming recovery of global travel.