Ctrip Q2 Revenue Down 32% as Pandemic Hits Travel Industry

HeatherZou

HeatherZ...

· 2022.09.24 09:27

Ctrip, the leading online travel agent in China, suffered a setback as the pandemic hit the tourism industry.

Image Source : China Visual

Image Source : China Visual

BEIJING, September 23 (TMTPOST) – China's leading online travel platform Ctrip recorded net revenue of 4.016 billion yuan ($564 million), down 32% year-on-year with an attributable net profit to the parent of 69 million yuan ($9.69 million), compared with a loss of 647 million yuan ($90.86 million) in the same period last year. The second quarter adjusted EBITDA margin was 9%. Its second-quarter 2022 financial results were released on Thursday.

Excluding the impact of equity incentives and changes in the fair value of investments, Ctrip recorded a loss of RMB 230 million ($32.3 million) in net income attributable to the mother company in the second quarter, a significant shrink of revenue from the loss of RMB 36 million ($5.06 million) in the first quarter.

Specifically, equity compensation expense in the second quarter was 304 million yuan ($42.69 million), down 16.94% from the same period last year; changes in investment gains and losses, etc., were included in other income, which recorded an income of 469 million yuan ($65.86 million) in the second quarter, compared with a loss of 848 million yuan ($119 million) in the same period last year.

In the first half of this year, the pandemic control affected the tourism industry, with a significant impact, especially in the second quarter. Ctrip's revenue of 8.127 billion yuan ($1.14 billion) in the first half of the year was only 47.98% of the same period in 2019, while the revenue in the fourth quarter of 2022 and full year of 2021 have climbed up to 56% of the pre-pandemic level. According to the Ministry of Culture and Tourism, domestic tourism revenue in the first half of the year was 1.17 trillion yuan ($164.3 billion), down 28.2% year-on-year, recovering to 42.06% of the pre-pandemic level.

As the pandemic hit operations, Ctrip continued to reduce operating costs during the pandemic. Operating costs overall declined 20% in the second quarter of 2022. Among them, product development expenses and sales and marketing expenses decreased by 20% and 41% year-over-year, respectively.

It is worth noting that as overseas restrictions on pandemic control have been lifted in most parts of the world, tourism has experienced a strong recovery. In the second quarter of this year, both airline and hotel bookings on Trip.com, Ctrip's overseas platform, increased by more than 100% year-over-year. Hotel bookings in the European market grew by nearly 400% year-on-year, and airline ticket bookings were close to 2019 levels.

(USD to CNY Exchange Rate: 1 USD = 7.1207 CNY)

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