What’s Next for Trip.com Group as Coronavirus Crisis Subsides in China?

Chinese online travel giant Trip.com was one of the first in the global tourism industry to be hit when the coronavirus outbreak began in China in late January. The booming Chinese outbound travel market soon came to a screeching halt as millions of Chinese hunkered down and countries imposed entry restrictions on travelers from China.

More than two months after the global pandemic ripped through the global economy, some glimmer of hope is now emerging from China as the country gradually returns to normality. During its recent earnings call, Trip.com Group CEO Jane Sun and Chairman James Liang even argued that green shoots of recovery are now underway for domestic tourism in China.

Skift spoke to Sun for her take on navigating the coronavirus pandemic, and how China’s improving conditions could offer encouragement to the rest of the world that the crisis could be managed and turned around.

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The interview has been edited for brevity and clarity.

Skift: What’s the most difficult challenging issue during the coronavirus outbreak?

Jane Sun: There are two stages. The first wave came when the virus was really severe in China. There were lots of cancellations, so we had to work day and night to handle a 20-times volume increase in cancellations from customers as well as changes and delays of trips.

The second way is right now. The virus is well under control in China, so we need to boost the confidence of the consumer and come up with very creative products so that consumers can resume confidence in travel and boost the recovery of domestic business.

Skift: The rest of the world now goes into lockdown even as China is opening up again, so how are you dealing with that? Does that mean that Chinese travelers can only travel within China for the time being?

Sun: China is already taking the lead in these difficult situations, so the rest of the world has the data from China’s experience to make intelligent and wise decisions. The Chinese government took a very decisive move to lock down the country for four to eight weeks and then got it over and done with. The result is so far positive, and I think that’s the right way to do. China is now working very hard to restart the economy and the rest of the world can follow its footsteps for their situation, and eventually we will all be out of this challenging situation. But right now, we really need to work as one team to share data and experiences and help each other during these challenging times.

We are seeing signs of recovery now from the domestic market in China. Ctrip is among the first couple of companies to return to work and many companies are now fully in operation. For Chinese travelers now it’s 周边游 (zhoubian you), or travel around big cities. There are products for parents to bring their family for relaxation on the weekend. After being locked down for two months a lot of people would like to travel but we need to do it in a very safe and methodical way.

Skift: How is Trip.com helping travel partners in overseas countries?

Sun: Before we were allowed to travel we already started surveying our partners and suppliers and what they really needed was cash flow from customers. Through our online initiative for the Tourism Recovery V plan, with V standing for victory, we got very good deals for the attractions, hotels and travel suppliers that customers would be able to prepay for. On one hand the customers benefit from these products, on the other hand the suppliers are also able to get some cash flow in the meantime. That’s how we, in the middle, add value for both the consumers and suppliers and help them in the recovery process.

Skift: Are such deals receiving positive traction from the Chinese travel market? Are they actually booking trips?

Sun: Yes, very, very positive. For the consumers, the demand is there. If you look back, they already paid for their overseas holiday trips [before the virus outbreak], so the demand is there, the buying power is there. They just need to find the right time and good deals to boost their confidence and then they will be able to travel. That’s been very positive.

Chinese travelers are already booking trips. I think right now China is probably controlling the virus much better, so consumers feel confident to travel within China. Once the consumer confidence is up, then the second step is for us is to work with travel bureaus in countries that already control the virus very well, such as Singapore, Japan and South Korea, to at least open up certain travel destinations within them to Chinese citizens.

Skift: Has the virus changed the behavior and preferences of Chinese travel market? Is safety a top priority?

Sun: Yes, of course. If you put yourself in their shoes, safety is number one. You don’t want to risk your family’s health to go to an area with beautiful scenery but which isn’t safe. Second, at this moment, is a good deal, which attracts consumers to a certain extent.

For example, we’re now promoting hotels with Michelin restaurants to our customers. In the pre-Covid days, it’s very difficult to get seats at these restaurants. But business has suffered due to the virus, so consumers are now able to get into popular restaurants or hotels in China at very reasonable prices. These are the things we can do to support our consumers.

While I’m talking about China, but I do think that for countries like Singapore which have controlled the virus situation well there are opportunities. We should be able to send our customers to these countries, as long as we have a good customer portfolio – that we know where they are, where they had been to within China for the past two months – so that the risk is well controlled.

The challenge is for governments and the travel industry to find a good way to identify the healthy population and meanwhile encourage the interchange, which would be very good for the economy and for the whole industry.

Skift: You mentioned the need to identify a healthy population fit for travel. When we come out on the other side of the crisis, does that mean we all would need some kind of health certificates to embark on international travel?

Sun: The exchange of the health portfolio is very important. Within China, we already have a health code based on people’s health status and travel history. For example, if I have a green code based on the data collected of me, I’ll get access to restaurants, hotels and establishments everywhere as they know that the chances for me being infected is very low.

The challenge is that every country needs to work to make sure that consumers who travel within its borders are healthy, so there is no fear from the population that the virus is going to be spread. But I’m sure by working together to at least have good handle on the virus, there will be a good way for countries to share their experience and encourage the healthy population of countries to travel.

This crisis has also exposed issues like limits of travel insurance, travel bans, and travelers stranded overseas by canceled flights. Do you think people will be hesitant to travel internationally after this pandemic is over?

Sun: No, I think in the long run the impacts will be minimal. Rather, it will create lots of good opportunities, even for travel insurance companies. The human race fights against viruses all the time. Trip.com has a global travel SOS program to handle crises, such as the tsunami in Japan, earthquake in Nepal, the Las Vegas shooting. Crises are unavoidable. We have seven to eight million people around the world every year, and we are used to handling crises.

For every crisis, there is an opportunity so I’m always optimistic in the long run we’ll be able to handle it. In the short term, we have to be very calm and decisive to handle this crisis well without blaming each other but rather united as one team to help each other. We have good years, we have bad years. It’s been 17 years since SARS in 2003, so the next time we handle such pandemic it will be much better. Every crisis presents an opportunity for us to learn.

Skift: What new opportunities has this crisis opened up for Trip.com?

Sun: In the pre-coronavirus days we only looked at ad-hoc bookings. If we look at Chinese travel patterns, 50 percent of our customers made their hotel bookings on the same day as they travel; 50 percent of our customers made their air ticket booking the day before they travel.

But now because of this virus outbreak, we’re exploring the pre-paid model for packages which is something new for us. We tried very hard to listen to our customers and suppliers and make sure the model is very fluid so that it can help both sides.

Skift: Are you saying that Chinese travelers, instead of making last-minute bookings which they are known for, are now making their bookings way ahead of time of their travel?  

Sun: Yes, exactly. I’m very confident that in the long run, travel will recover and flourish because there is pent-up demand in the population. In the short term we will have pressure, but in the long term when we look back the coronavirus will be a small blip, as any other crisis we always encounter every year.

Skift: If you could travel internationally right now, where would you like to go?

Sun: Personally, without travel restrictions I would feel very confident to travel to Singapore, Japan and  South Korea. The [relatively low infection] numbers in these countries look very promising, and right now the travel volume is not too high so you might be able to get into wonderful places by yourself.

Skift: What would be your message to the travel industry?

Sun: Everyone should hopefully never waste any crisis, as every crisis will open up another door for us. Hopefully with this crisis we realize how important it is for the globe to work as one team. No country can be isolated from another, and only when we’re united we will win. No country can fight the war by themselves.