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Trip.com, China’s largest online travel agency, eyeing 20 per cent growth over longer term, says current boom won’t be short-lived

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Trip.com Group, China’s largest online travel agency, does not expect a stalled national economy to halt its pursuit of annualised growth of up to 20 per cent over the next three to five years.

Jane Sun Jie, the Shanghai-based company’s CEO, told the Post that demand for leisure travel by local tourists across mainland China would be strong enough to spur growth at Trip.com. She allayed concerns about a short-lived travel boom amid fears that pent-up demand – triggered by China’s reopening following three years of stringent Covid-19 pandemic curbs – will soon be fully spent.

“We firmly believe in ‘no travel, no life’,” Sun said on Monday. “We see no real impact on the travel industry [from a stalled economy]. We are targeting year-on-year growth of somewhere between 15 and 20 per cent, over the next three to five years.”

Sun said a survey of users on Trip.com’s booking platform showed that most of them were determined to increase their spending on travel, setting aside concerns about job prospects and incomes.

Tourism was China’s worst-hit economic sector between 2020 and 2022 because of lockdown restrictions and border closures. It emerged as one of the fastest-growing industries in the world’s second-largest economy after Beijing shifted from its zero-Covid strategy to living with the coronavirus in January this year.

But an off-the-charts recovery sparked speculation that massive spending on travel would run out of steam in the coming months, when tourists would stop splashing out on hotels, airline tickets and dining out due to a slowing economy.

Trip.com is also working with Chinese authorities to buoy inbound foreign tourism, its CEO says. Photo: Shutterstock

In the first half of 2023, China’s travel sector raked in total revenues of 2.3 trillion yuan (US$315.2 billion), up 96 per cent year on year, according to Ministry of Culture and Tourism data. The revenue is, however, still 17 per cent shy of the 2.78 trillion yuan recorded in the same period in 2019, before the coronavirus outbreak.

Earlier this month, Trip.com reported that its second-quarter earnings stood at 648 million yuan, compared to 43 million yuan a year ago. Its revenue climbed 180 per cent year on year to 11.2 billion yuan.

Mizuho Securities said in a research note after the earnings release that it expected an improved performance by Trip.com in the third quarter of this year because domestic travel would sustain its growth momentum even as outbound travel made a recovery.

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Hotel room prices surged by up to 10 times in popular tourist destinations such as Yunnan province during the Labour Day holiday from May 1 to May 3, according to Li Wenjie, CEO of Shanghai Yaheng International Travel.

Resort and hotel operators are expecting another windfall during the eight-day National Day holiday, also known as the Golden Week, which runs from September 28 to October 6.

Trip.com’s Sun said it would not be a surprise if room prices rise substantially because travel resources in China remain insufficient and a boom in tourism can easily overwhelm capacity.

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Customised services are in high demand after China’s reopening, as tourists focus on safety and wellness during leisure travel, she added. “People prefer to hire drivers and tour guides by themselves,” Sun said. “They prefer to travel with their families and close friends.”

She also said Trip.com was working with Chinese authorities to buoy inbound tourism by easing booking procedures, removing language barriers and easing digital payments for overseas visitors.

Article was originally published from here

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