Trip.com Group says outbound travel demand has been strong
since China’s border reopened in December, and the company expects demand to
continue to accelerate in the coming months.
“Right now, the bottleneck lies in outbound flight capacity,
which is currently only at 15% to 20% of pre-COVID level and is largely
limiting the overall recovery pace of China’s outbound travel,” says Jane Sun,
CEO of Trip.com Group in a call with analysts to discuss the company’s fourth
quarter and full year 2022 financial results.
“We anticipate that the aviation industry will set in motion
plans to restore flight capacity and that outbound travel will pick up the pace
in the coming quarters.”
In Q4 2022, outbound air ticket bookings on Trip.com Group platforms
increased by more than 200% and outbound hotel bookings increased by 140%
compared with the same quarter of 2021.
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And Sun says demand for outbound travel has “continued to
surge” in the first two months of this year, with bookings up more than 300%
compared with the same period last year.
“We are confident that we can work hard to capitalize the
opportunity in 2023,” she says.
In Q4, Trip.com Group had net revenue of $729 million, a 7%
increase year over year. For the full year 2022, net revenue was $2.9 billion,
flat compared with 2021.
Adjusted EBITDA was $41 million in the fourth quarter and $314
million for the full year 2022.
Trip.com Group’s sales and marketing expenses came in at $166
million in Q4, down from $204 million in the same period a year earlier. For
the full year, sales and marketing expenses were $616 million, down from $772
million in 2021.
As a percentage of revenue, sales and marketing expenses
were 23% of net revenue in Q4 and 21% of net revenue for the full year.
Accommodation reservation revenue was $245 million in Q4 and
$1.1 billion for the full year, while transportation ticketing revenue was $320
million in Q4 and $1.2 billion for the full year.
Sun shared updates regarding the company’s efforts on
sustainability, corporate responsibility and its content platform.
“We are seeing customers coming to our platform not only 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 users’
engagement capabilities continued to improve,” she says.
“In 2022, user generated content also increased by 33%
compared to the previous year. Average number of the content viewed per user
also continued to increase.”
Sun highlighted the new TripGen
artificial intelligence chatbot on the Trip.com platform as an example of
the company’s commitment to innovation.
And in response to a question from analysts about the
potential for AI and the chatbot, executive chairman James Liang says, “First
of all, it enables our customers to find more relevant information faster and
more efficient. Secondly, we are able to link their search results to our
existing products more efficiently. And certainly it will also enable our
service team to provide better services. We are working very hard to try to
improve our efficiency by utilizing the new technology as always, but it’s
still at early stage.”