Skift Take

Six months or a year seem like way longer than that in the Covid era, and anything can happen in the interim. But it is significant that the executive chairman of China's largest online travel agency is postulating that inbound and outbound travel curbs could be softened next year.

The Delta variant and natural disasters, including flooding, rocked Trip.com Group’s third quarter financial results, but the company’s executive chairman held out hope that the Chinese government could ease international travel restrictions in the back half of 2022.

“Though some countries have tightened restrictions recently due to the omicron variant, the temporary turbulence will not change the ultimate trend of travel recovery,” co-founder and Executive Chairman Jianzhang Liang told financial analysts December 16 in Shanghai. “Under normal conditions, we may see China gradually relax inbound and outbound travel policies in the second half of 2022.”

Of course, the pandemic’s jagged trajectory means that anything can change, but the fact that a top official of China’s biggest online travel agency would go public with conjecture that both inbound and outbound travel barriers could come down as soon as a little more than six months from now means Chinese authorities are contemplating an easing of Covid travel policies.

That would mean that the Chinese government’s current inward-looking bent could be less enduring than some observers expect. Chinese authorities have carried out a “zero tolerance” policy for Covid outbreaks.

Trip.com Group, which operates the Ctrip brand domestically, and Trip.com and Skyscanner abroad, saw improvements in the Group’s financial performance in July, but a material downturn took place in August and September from natural disasters and the Delta variant. Among the natural calamities was massive flooding in Henan.

“The performance of travel market in major economies has been diverted,” said CEO Jie Sun. “The China travel market has been frequently interrupted by the resurgences of Covid cases. It has witnessed a strong recovery in July until natural disasters and the Delta variant emerged to slow it down.” 

The company’s net income swung from around $196 million a year earlier to a net loss of $131 million in the third quarter of 2021. Revenue fell around 2 percent year over year to $831 million, and that was a 9 percent drop compared with the second quarter as the Delta variant took its toll in “multiple provinces,” the company stated.

Both hotel occupancy and flight bookings in the third quarter were still around 30 percent lower than pre-pandemic levels, Trip.com Group stated.

While “staycations” were the primary driver of China’s domestic travel recovery, according to the company, Liang said Trip.com Group’s international focus is expansion in Asia Pacific and Europe. Without providing numbers, he said the Group’s Trip.com brand made market share gains in Hong Kong, Singapore, Japan and South Korea.

The company’s Skyscanner metasearch, or comparison shopping, brand, which is strongest in Europe, saw its air ticket bookings jump 100 percent in the third quarter of 2021 compared with the year-earlier period, Trip.com Group reported.

Trip.com Group also cited progress in its content and travel inspiration strategy, as well as making gains in the high-end hotel sector.

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Tags: china, coronavirus, covid-19, Delta variant, domestic travel, earnings, omicron, skyscanner, travel recovery, trip.com, trip.com group

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