posts 64% revenue drop, sees full recovery in domestic flights, hotels bookings
09/25/2020|6:54:07 AM|ChinaTravelNews Group said the company's business has continued to show strong momentum of recovery in the China domestic market. Reservations for China domestic flights and hotels have reached a level of full recovery in succession during August, according to CEO Jane Sun. 

Net revenue for the second quarter this year was RMB 3.2 billion (USD 448 million), down by 64% year-on-year. The company attributed this to a strong recovery of China domestic businesses, offset by a steep decline of international businesses.

Reservations for China domestic hotels achieved positive growth, with high-end domestic hotels leading the way over the past month, while China domestic flight reservations achieved positive growth over the past months.

Still, the company's results for the second quarter of 2020 were significantly and negatively impacted due to the ongoing COVID-19 pandemic.

Operating loss for the second quarter of 2020 was RMB 688 million (USD 97 million). Excluding share-based compensation charges, non-GAAP loss from operations was RMB 200 million (USD 27 million).

"In the second quarter of 2020, the global travel industry continued to experience significant impact as a result of the ongoing COVID-19 pandemic. On a promising note, we have seen all of our domestic business lines recover to varying degrees during the quarter," said James Liang, Executive Chairman. "As global efforts intensify in this fight against COVID-19, we are increasingly optimistic that there will be more resumption of travel activity in major markets worldwide."

Consumers are becoming more comfortable with traveling especially to domestic locations. This has led to more travel bookings compared to February and March 2020. Yet, travel demands remained significantly lower than the previous year especially for the China outbound and overseas markets.

Accommodation reservation revenue for the second quarter of 2020 was RMB 1.3 billion (USD 178 million), representing a 63% decrease from the same period in 2019, and a 9% increase from the previous quarter, primarily due to the recovery of China domestic market.

Transportation ticketing revenue for the second quarter of 2020 was RMB 1.2 billion (USD 163 million), representing a 66% decrease from the same period in 2019, and a 52% decrease from the previous quarter.

Net loss attributable to Group's shareholders for the second quarter of 2020 was RMB 476 million (USD 67 million), compared to net loss attributable to Group's shareholders of RMB 403 million in the same period in 2019 and RMB 5.4 billion in the previous quarter.

As of June 30, 2020, the balance of cash and cash equivalents, restricted cash, short-term investment, held to maturity time deposit and financial products was RMB 64.3 billion (USD 9.1 billion).

The company expects net revenue to decrease by 47%-52% for the third quarter of 2020.