In a resounding testament to the resilience of China’s travel industry, Trip.com Group has reported a stellar performance in the fourth quarter of 2023, with revenue surging to 10.3 billion yuan (US$1.8 billion), a staggering 105 per cent increase from the previous year. This impressive growth trajectory has propelled Trip.com’s shares to an all-time high, reflecting investor confidence in the company’s ability to navigate the challenges posed by the pandemic and capitalize on the resurgence in travel demand.
The fourth-quarter results mark a remarkable turnaround for Trip.com, which, like many travel companies, faced unprecedented challenges during the pandemic. The company’s full-year revenue for 2023 reached 44.5 billion yuan, a 122 per cent increase from the previous year, underscoring its strong recovery and robust business performance.
James Liang, Executive Chairman of Trip.com Group, attributed the strong performance to China’s reopening in the first quarter of 2023, which drove a surge in travel demand. He also highlighted the company’s expanded global presence, which contributed to its substantial growth.
The company reported significant revenue growth across its three main segments – hotel bookings, ticketing, and packaged tours. Revenue from hotel bookings, which account for 38 per cent of overall sales, surged 131 per cent in the fourth quarter to 3.9 billion yuan. Ticket sales, which make up 40 per cent of sales, rose 86 per cent to 4.1 billion yuan, while revenue from packaged tours surged 329 per cent to 708 million yuan.
Analysts have praised Trip.com’s performance, with Citigroup noting that the company’s marketing-to-revenue ratio reached 22 per cent, lower than previous estimates, indicating improved efficiency in marketing spending. The bank also expressed optimism about the company’s first-quarter earnings outlook, citing the strong performance of the Chinese travel industry during the Lunar New Year holiday.
China’s move to relax its visa policy has also boosted Trip.com’s earnings, with the country scrapping entry visa requirements for five European countries and implementing mutual visa exemption schemes with several countries. This policy shift has led to a significant increase in bookings to Southeast Asian countries and a surge in domestic hotel reservations.
Overall, Trip.com’s impressive performance in the fourth quarter of 2023 reflects not only its resilience in the face of adversity but also its ability to capitalize on emerging opportunities. As the global travel industry continues to recover, Trip.com is well-positioned to benefit from the resurgence in travel demand and drive further growth in the coming quarters.
(Source: SCMP | Forbes)
