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For a faster recovery of the China outbound market, executives say the aviation sector will have to ramp up flight capacity from the current 15-20 percent of pre-Covid level.

While airlines not running international flights at the pre-pandemic level could be a short-term bottleneck, Chinese online travel agency Group believes the country’s outbound travel will start to pick up in the second quarter when flight capacity gradually recovers.

With outbound flight capacity currently at only 15-20 percent of pre-Covid level, Jie Sun, CEO and Director of Group hoped that the aviation industry would set in motion plans to restore flight capacity to help outbound travel pick up pace in the coming quarters.

As domestic business in China remained resilient and international business continued to show strong recovery momentum, Group announced that its overall air ticketing and revenue from global platforms for the fourth quarter have fully recovered to pre-pandemic level.

Since the announcement of China’s reopening, the group noted that domestic hotel bookings and air booking have already passed the 2019 level.

The year 2022 marks an end to the three years of topsy turvy ride of the Covid-19 pandemic, Jianzhang Liang, co-founder and executive chairman of Group, announced during an earnings call on Tuesday.

Number Crunching

Sun called the fourth quarter of 2022 the darkness before dawn as domestic travel performance slowed down in October and November as a result of the viral resurgence and strict pandemic control measures.

As a result of which for the fourth quarter of 2022, Group reported a net revenue of $729 million, a 7 percent increase from the same period in 2021, and a 27 percent decrease from the previous quarter.

In 2022, Group’s net revenue was $2.9 billion, which remained stable year-over-year, mainly driven by recovery in the overseas market and partially offset by a soft performance in the China domestic market.

The group’s combination reservation revenue for the fourth quarter of 2022 was $250 million, representing a 12 percent decrease year-over-year and a 42 percent decrease quarter-over-quarter, recovering to 57 percent of the 2019 level.

In 2022, the group’s net income was $201 million, compared to net loss of $93 million in 2021.

Outperforming the Market

Despite China’s domestic travel market being largely impacted by the pandemic, Sun said Group continued to outperform the market.

“Our same-city staycation hotel bookings in this quarter grew by 10 percent above 2019 pre-Covid level and was 40 percent higher than the pre-pandemic level for the full year of 2022.”

With domestic air ticket booking outpacing the market, Sun said that quarter-to-date, long-haul travel bookings have already surpassed 2019 pre-Covid level and the short-haul travel growth has nearly doubled its 2019 pre-Covid level.

Sun also spoke about the fact that hotels have been evolving into destinations in themselves with travelers emphasizing the quality of their accommodation.

The group noted that customers have been coming to its platform not just to book air tickets or hotel rooms but also to get inspired for their next trip.

“In the fourth quarter, our content generation pipeline and the user engagement capabilities continue to improve,” Sun said.

While the number of influencers increased by 47 percent year-over-year in 2022, user-generated content also increased by 33 percent compared to the previous year.

Of Chatbots and Sustainability

The group recently launched its experimental artificial intelligence (AI) chatbot — TripGen which Sun said has been designed to provide travelers with live assistance and provide the most relevant and authentic travel recommendations to customers.

Xiaofan Wang, chief financial officer and executive vice president of Group, identified three functions for TripGen — to enables customers to find relevant information faster and more efficiently, to link their search results to the group’s existing products more efficiently and to enable its service team to provide better services.

“We are working very hard try to improve our efficiency by utilizing the new technology as always. But it’s still at an early exploratory stage,” Wang said.

The group’s rural revitalization initiatives include plan to roll out 10 high-quality country retreats to empower 100 rural destinations and nurture 10,000 rural tourism talents within five years.

“Over the past year, three new country retreats were built, making a total of 21 country retreats currently in operation,” Sun said, adding, “Around 80 percent of the staff are local.”

Announcing its long-term green tourism goals, Sun said the group would launch over 10,000 low-carbon travel products, promoting sustainable carbon and engage 100 million travelers in carbon, low-carbon practices.

“Our brand launched its carbon offset option for travelers to address their flight emission by supporting a portfolio of trusted high-impact climate projects. in line with the UN sustainability development growth.”

In October, Group had officially joined the Global Sustainable Tourism Council (GSTC) as a member.

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Tags: asia monthly, china outbound, coronavirus recovery, domestic travel, earnings, hotels, online travel newsletter, sustainability,, user generated content

Photo credit: Domestic business in China remained resilient and international business continued to show strong recovery momentum. PxHere

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