Trip.com Group’s Europe and US business now plays a larger role in performance

Trip.com Group’s Europe and US business now plays a larger role in performance

quick take

Geographic diversification is paying off for China’s Trip.com group. Europe and the US are still a fraction of its total business, but are now significant contributors.

dennis schal

As the resurgence of the Chinese pandemic and the government’s zero-Covid policies negatively affected the domestic travel market in the second quarter, Shanghai-based Trip.com Group benefited from the performance of its international Skyscanner and Trip brands. .com in Europe and the US

Chief Financial Officer Xiaofan Wang told analysts during the company’s earnings discussion earlier this week that Trip.com Group’s “key international brands” revenue rose more than 200 percent in the second quarter, compared to the same period a year earlier, and “contributed 20 percent to 30 percent” of the Group’s total revenue.

That would mean that Skyscanner, a comparison shopping engine for flights and hotels, and online travel agency brand Trip.com, which the Trip.com Group acquired in 2016 and 2017, respectively, generated between $115 million and $172 million in revenue. revenue in the quarter ending June. 30

“We are also happy to see the adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of some international brands has turned positive on the back of our rapid business recovery and increased operational efficiency,” Wang said.

He did not specify which of the parent company’s international brands were profitable, although a year earlier Wang said Skyscanner had been losing money. Wang added this week that the company’s international brands were becoming “a major contributor” to bottom line profits.

During the second quarter, Trip.com Group posted $6 million in net income compared to a net loss of $95 million a year earlier.

“While the sporadic resurgence of Covid continues to disrupt China’s domestic travel recovery, the effect on traveler sentiment has been fading and the market has shown its resilience,” said co-founder and CEO Jianzhang Liang. . “Following the relaxation of restrictions, we have seen that, overall, on the domestic channel, hotel bookings on our platform quickly recovered and exceeded the level of 2019 at the end of June.”

Trip.com Group, formerly known as Ctrip, which remains its national brand name in China, spent about 21 percent of total revenue, or $123 million, on sales and marketing in the second quarter. That compares with 51.3 percent of revenue allocated to sales and marketing at Booking Holdings, which generated $857 million in profit during the June quarter.

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