Chinese online travel agency Trip.com (Nasdaq: TCOM) reported RMB 5 billion (USD 761 million) in revenue for the fourth quarter of 2020, down 40% year-on-year (YoY), mainly due to the negative impact from the COVID-19 pandemic, according to the company’s earnings release on Thursday.
The quarterly revenue actually dropped less than in Q3, when it retreated 48% YoY, and 64% in the second quarter, at the peak of the coronavirus outbreak in China. The further narrowing decline reflects a continued recovery of the domestic business in China, offsetting the decrease in the international business, the company stated in the release.
“2020 was a challenging year. However, it also made us fundamentally stronger than ever before,” said executive chairman James Liang. “During the past year, we continued to innovate our products, improve service offerings, and strengthen our collaborations with partners, which led to further market share gains across our product lines.”
“We are glad to see that our domestic business continued to outpace the industry in the fourth quarter and entering into 2021,” said CEO Jane Sun. The company even achieved a 2% non-GAAP operating profit margin for the full year of 2020, thanks to efficiency improvements and stringent cost control, she added.
Trip.com generated RMB 1 billion (USD155 million) in net income in the fourth quarter, compared RMB2 billion in the same period in 2019. It resulted in a RMB 3.2 billion net loss for the full year of 2020.
The firm did not provide a revenue guidance for the first quarter during the earnings call on Thursday since COVID-19 related travel restrictions during the Chinese New Year caused significant variability in travel bookings in the first two months of 2021. Sun told analysts that the management saw a very good recovery for domestic travel after the Chinese New Year holiday.
She added that some Asian countries such as Singapore, Japan, and Korea, which have controlled the virus well, are also recovering at home.
Sun said the company is expecting global medical experts to form a consensus on how long people, who have already been vaccinated, need to be quarantined, so that countries can come up with policies and open up green lanes for travelers.