Trip.com says hotel bookings in China are surpassing pre-pandemic levels

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BEIJING – Hotel reservations in China have surpassed pre-pandemic levels since late June, booking site Trip.com said Thursday.

Trip.com shares briefly fell more than 7% in Hong Kong trading Thursday, before recovering slightly to close 4.5% lower. The New York-listed shares were down 8.5% overnight, but rose 2.5% in extended trading.

ÔÇťOverall our domestic China hotel reservations on our platform have recovered quickly and [have] exceeded pre-Covid levels since late June,” Trip.com Chief Financial Officer Cindy Xiaofan Wang said during an earnings call Thursday morning.

“Total domestic hotel bookings were almost 20% higher in July compared to 2019 levels and we continued to grow above 2019 levels in August and achieved hyper growth compared to 2021,” he said.

The increase comes despite continued sporadic lockdowns and travel bans across China to contain the Covid outbreak. Hundreds of thousands of tourists were stranded in resort areas in Hainan province in August after Covid control measures canceled off-island transport.

The location has greatly increased summer travel.

Trip.com said that in the most recent quarter, hotel reservations in the same city increased 30% compared to 2019 levels.

However, Wang said the number of domestic air passengers “has fallen by 70% to 80% compared to 2019 levels in recent weeks.”

Trip.com reported second-quarter revenue of 4.01 billion yuan ($572.9 million), topping expectations for 3.58 billion yuan, according to FactSet. Both accommodation reservation and transportation ticket revenue beat estimates from FactSet.

However, overall revenue in the second quarter was down 32% from the same period a year ago and down 2% from the previous quarter. The company said the drop was “primarily due to continued disruption from the resurgence of Covid-19 in China.”

International business boom

For a China-based company, its international offerings have proven to be a bright spot.

“Trip.com’s growth was largely driven by the strong recovery of international flights, and we are pleased to see such momentum continue in the third quarter,” Wang said, noting that such airline ticket bookings in July were close to 90% of 2019 levels.

In the second quarter, same-country hotel bookings outside China quadrupled from 2019 levels, he said.

By region, revenues from the European and American markets have already exceeded 2019 levels, Wang said.

Most countries around the world have relaxed many Covid travel restrictions, while China maintains a strict, so-called dynamic zero-Covid policy.

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