Trip sees revenue shoot by 86% to $913m

China's largest online travel agency Trip Group saw its total net revenue jump by 86 percent year-on-year to 5.9 billion yuan ($913 million) for the second fiscal quarter ended on June 30, 2021, according to the results released on Sept 24.

The surge, which is closely related to the easement of China's travel restrictions at the beginning of the year, showed strong recovery of China's domestic tourism market, said the Nasdaq-listed tourism company. It also saw the gross merchandise volume of domestic hotel and air ticket soar 150 percent year-on-year in the second quarter, as per the fiscal report.

Investment research firm Zacks estimated in a report on Sept 17 that Trip would see its second quarter revenue rise 93 percent year-on-year to $864.43 million.

Staycation travel continues to serve as a major driver of domestic recovery with local hotel reservations increasing nearly 80 percent in the second quarter at Trip versus the pre-COVID period in 2019. Revenues from corporate travel management grew 141 percent on a yearly basis and 26 percent compared with the pre-virus period in 2019.

Packaged tour revenue, which was hit hard by the country's travel restrictions after the epidemic, rose to 367 million yuan in the second quarter. This represented a 182 percent increase from the same period in 2020, and a 117 percent rise from the previous quarter.

"Overall, the Chinese domestic travel market has been encouraging, and we see great potential in international markets," said James Liang, co-founder and executive chairman of Trip.

"Throughout the second quarter, we continued to focus on the domestic market in terms of supply chain, content capabilities, service quality, and technology advancement, to lay a solid foundation for new growth drivers beyond the pandemic," said Jane Sun, the travel agency's CEO.

Trip's gross margin was 79 percent for the second quarter of 2021, which increased from 72 percent for the same period in 2020 and 75 percent for the previous quarter.

Adjusted EBITDA for the second quarter of 2021 was 916 million yuan, compared to 124 million yuan in the same period in 2020 and a loss of 216 million yuan in the previous quarter. Adjusted EBITDA margin was 16 percent for the second quarter of 2021, compared to 4 percent in the same period in 2020 and -5 percent in the previous quarter.

While Trip saw its price close at $29.32 on Sept 23, Wall Street analysts reached a consensus of "strong buy" for the travel agency with an average price target set coming at $38.8 on Sept 1, according to public data.