KrASIA Takeaways
- Trip.com remains the world’s largest OTA with RMB 8.65 annual GMV in 2019, a 19% YoY increase
- The company expects its biggest quarterly, possibly annual, loss this year since its inception due to the coronavirus outbreak
- It has seen order cancellations worth of RMB 31 billion
While the global tourism sector is feeling the chill from the coronavirus health crisis, Chinese online travel agency (OTA) Trip.com (NASDAQ: TCOM) announced Thursday its latest earnings results with a financial performance that consolidates investors’ confidence amid an uneasy stock market.
The world’s largest OTA by gross merchandise value (GMV) reported a net income of RMB 2 billion (USD 289 million) and RMB 7 billion (USD 1 billion) for Q4 2019 and the full year, respectively, compared to a net loss of RMB 1.2 billion in Q4 2018 and net income of 1.1 billion for all 2018, according to the company’s earnings release.
Shanghai-based Trip.com clocked a 19% year-on-year (YoY) growth in annual GMV that stands at RMB 8.65 billion, crowning it as the largest OTA in the world for a second year.
However, the fallout of the coronavirus pandemic will be reflected in the first quarter of this year, as Liang Jianzhang, co-founder and chairman of Trip.com, told 36Kr in an interview that he expects the company’s biggest ever quarterly, if not annual, loss this year.
To date, Trip.com has canceled RMB 31 billion (USD 4.43 billion) worth of orders, the company’s CEO told media over the conference call.
However, Liang believes the negative impact of the COVID-19 outbreak is temporary and singular.
“Now that travel has become a necessity for many people in the country, the new outbreak has not damaged the healthy foundation of the Chinese tourism market,” he said. “Instead, it will accelerate industry consolidation and online penetration in lower-tier cities.”