Group sees signs of optimism despite falling revenue in Q2

The resurgence of the COVID-19 pandemic continued to disrupt travel demand in China early in the second quarter of this year. Group’s lodging booking revenue fell 45% in the second quarter to $203 million, compared to the same period in 2021. Transportation ticketing revenue, primarily air, decreased 15% year over year over the year to $263 million, and total revenue in the quarter came to $598 million, down 32% from the same period in 2021 and down 2% compared to the first quarter of this year.

But the company says there are signs of future growth, especially in the second half of the quarter, with airfare and hotel bookings on its global platforms up more than 100% in the second quarter compared to the same period last year. last year.

In a call with analysts to discuss the results, Group Chief Executive James Liang said: “In the second quarter of 2022, despite the challenging market environment in April and May due to the ongoing nature of Omicron and the strictest pandemic control measures. , we are encouraged to see the strong release of pent-up demand in the second half of this quarter. While the sporadic resurgence of COVID continues to disrupt China’s mass travel recovery, the effect on traveler confidence has been fading and the market has shown resilience.”

As travel restrictions eased, the national channel’s hotel bookings surpassed 2019 levels at the end of June. Group says “holiday at home” travel is a top contributor, with same-city hotel bookings up more than 30% in the quarter compared to the same period in 2019.

And as restrictions have been lifted in most parts of the world, Group CEO Jane Sun tells analysts the company’s global business is showing continued growth.

“First, on international flights. Overall airline bookings on our global platform increased more than 100% year over year and enriched our global brand, …’s growth was driven primarily by the strong recovery in international flights and we are pleased to see this momentum continue in the third quarter. In July, total airline ticket bookings on were headed toward a 90% recovery from the 2019 level,” he says.

“Second, the international hotel, hotel reservations in general on global platforms have increased by more than 50% above the 2019 level in the second quarter.”

Package tour revenue for the second quarter was $18 million, down 67% year over year, and corporate travel revenue was $31 million, down 46% compared to the second quarter of 2021.

Gross profit for the quarter was $452 million, a 35% drop, while Adjusted EBITDA for the quarter nearly tripled year over year to $53 million. Group’s sales and marketing expenses decreased 41% year over year in the second quarter to $123 million primarily due to a decrease in expenses related to marketing and sales promotion activities. As a percentage of net income, sales and marketing expenses were 21% for the second quarter of 2022.

“We will continue to improve our operating efficiency and exercise prudent cost control in the face of a changing environment. All of these efforts will allow us to remain flexible and pave the way for long-term growth,” says Sun.

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