PALO ALTO, U.S. -- Trip.com Group, China's largest online travel operator, reported a $754 million loss in the first quarter as the coronavirus pandemic disrupted global travel, but saw a silver lining as domestic tourism rebounded and demand for high-end accomodations grew.
"In China, travel activities hit bottom in February, and have since been consistently on a recovery track," said James Liang, Trip.com's executive chairman, during the company's earnings release. The Nasdaq-listed company operates travel booking sites including Ctrip, Skyscanner and Qunar.
For the three months ended March 31, Trip.com recorded a net loss of 5.4 billion yuan ($754 million), down from a net income of 4.6 billion yuan in the same period last year. Net revenue fell 42% on the year to 4.7 billion yuan.
Trip.com attributed the loss to the impact of COVID-19. While its business in China has shown signs of bouncing back, its international operations may take longer to recover, the compnay said.
"So far we have seen recovery coming back fastest in the short-haul segments and at lower tier cities [in China]," said Liang.
During China's Labor Day national holiday, which fell on May 1-5 this year, the country recorded 115 million domestic tourist trips, and 47.56 billion yuan in tourism revenue, down nearly 60% from last year, data from China's Ministry of Culture and Tourism shows.
Despite declining on the year, however, the total number of tourist trips was double what is was during previous national holiday -- Qingming -- in April, signaling a recovery in domestic tourism as travel restrictions ease.
Trip.com-owned Ctrip said car rental reservations rose 10% from last year during the Labor Day holiday.
"We think [in China, in] the same provinces, same cities, attraction tickets and car rental services are approaching a full recovery," said Trip.com CFO Cindy Wang.
Meanwhile, new reservations for domestic hotels and air travel bookings within China have returned to around 70% of what they were before COVID-19, according to Wang.
The company is also recording more high-end booking as travelers opt for more expensive hotels out of increased concern for cleanliness and safety.
"In recent weeks, our high-end hotel reservations recovered meaningfully and outpaced other segments," Wang said.
However, due to the "uneven approaches adopted by different regions" in containing the outbreak, the company said it may take longer for its international business to return to normal.
"Given the level of uncertainties outside of China, we will focus our attention on China domestic business in the near term," Chairman Liang said.
"We believe part of China's outbound travel demand will convert to high-end domestic travel activities if such a situation continues," Wang added.
For the upcoming summer, which is peak travel season in China, the company said it is working on developing domestic travel products that can satisfy these high-end customers' needs, as they will not be able to travel abroad this year.
"We would like to capitalize [on] this demand and convert it into domestic demand for high-end products and long-haul products," said Wang.
Despite the silver linings in China, Trip.com said it expects the negative impact of COVID-19 to continue in the current quarter and warned that its net revenue will decrease 67% to 77% year over year in the three months through June.
Trip.com shares were down 4.3% in after-hours trading Thursday.