China's Return to Travel Boosts, Shares Rise

© Reuters.

By Christiana Sciaudone — China appears to be shrugging off the coronavirus, as Group Ltd ADR (NASDAQ:) reports strong recovery momentum in the domestic market. 

Shanghai-based jumped 10% after reporting second quarter results. The company said reservations for China domestic hotels achieved positive growth, with the high-end locations leading the way over the past month. Domestic flight reservations in China also achieved positive growth over the past months, said.

That said, it’s been a tough ride. Sales of $448 million dropped 64% from a year earlier as international business evaporated. The third quarter should see a slight improvement, with revenue down between 47% and 52% compared to a year earlier.  

“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 in particular to domestic locations, which has led to more bookings compared to February and March of this year, the company said in a statement.              

“In the past two months, demand for hotel bookings by non-China customers have more than doubled compared to the same period last year,” said co-founder and board chairman James Jianzhang Liang in an earnings call. “With the fast progress made toward finding a vaccine and effective medical treatment for COVID-19, we remain optimistic in travel resumption around the world.” 

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