Group sees pent-up demand drive bookings above 2019 levels Group’s financial results for the first quarter of this
year are a clear indication Chinese consumers are eager to travel again.

The Chinese government lifted some virus testing requirements on domestic
travel in December and reopened its borders in early January, allowing
Chinese residents to go overseas.

In Q1, Group said domestic hotel bookings grew by more
than 100% year over year and air-ticket bookings on the company’s global online
travel agency platform grew by more than 200% year over year and doubled the
bookings of the same period in 2019.

But while
outbound demand has been strong, limited capacity for international flights
from China continues to be an impediment.

“Outbound is a very robust business. We have already seen the
demand side have far exceeded the 2019 level. However, the supply side,
particularly for the air capacity, is still on the way to recover,” said Jane
Sun, Group CEO and group director, in a call with analysts to discuss
the results.

“In Q1, the recovery for the industry is about 15%. And in Q2, we
have seen it raised to about 40%. However, is able to outpace the
market by a great margin.”

Driven by growth in both domestic and overseas travel, Group reports revenue for Q1 of this year was up 124% compared with Q1
2022 to $1.3 billion. That’s also higher than the company’s Q1 revenue in 2019,
which was $1.2 billion.

Accommodation reservation revenue for the first quarter of
2023 was $507 million, up 140% year over year, and transportation ticketing
revenue was $605 million, up 150%. Corporate travel revenue is also double the
same period of 2022 to $65 million. 

Adjusted EBITDA for the first quarter was $410 million
compared with $16 million for Q1 2022 and adjusted EBITDA margin was 31% compared with 2% in 2022, which the company said was its highest in the past decade.

In the first quarter, Group’s sales and marketing
expenses came in at $256 million, 19% of net revenue. 

In February, became the first major online travel agency to
integrate OpenAI’s chatbot technology into its mobile app
. Known as TripGen,
the AI assistant helps users find and book travel using natural language. In
May, added a plugin for ChatGPT, and Sun said the company is
continuing to explore ways to use generative AI to both help customers and improve
internal operations.

“We believe with proper guardrails in place, AI is not only
able to unlock the business potential, but also speed up, scale and boost up
our existing user cases. By augmenting our service capacities, such technology
will bring transformation to the travel industry at large and can empower us to
deliver faster and better services and more personalized user experience,” she

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