(Yicai Global) May 29 -- China's leading online travel agency Trip.Com lost CNY5.4 billion (USD756 million) in the first quarter from the Covid-19 pandemic but it is optimistic about the prospects of a revival in the tourism market as the virus has come under control in the country, the firm said yesterday.

The Shanghai-headquartered company formerly known as Ctrip recorded a drop of 42 percent in operating revenue to CNY4.7 billion in the quarter as all its businesses slid, per the firm’s financial report it issued after yesterday’s market close. Its lodging reservations plummeted 62 percent, its vacation business declined by half, its business travel activity dropped 47 percent and transport ticketing fell 29 percent. These figures stand in stark contrast to the CNY4.6 billion in net profit it took in during the same time last year,

Trip.Com’s stock [NASDAQ:TCOM] ended the day down 1.9 percent at USD25.34, trimming its market value to around USD15 billion. Its shares dropped a further 5 percent in after-hours trading following the firm’s release of its financial report.

Trip.Com also had to refund more than CNY31 billion in reservation deposits amid the pandemic, losing CNY1.2 billion thereby, while its administration expenses jumped 136 percent to CNY1.9 billion in the period. The firm’s losses also came on the back of the falling prices of its financial assets such as stocks.

The company did manage to maintain sound liquidity. Its capital reserves totaled CNY68.2 billion as of the end of the quarter, up 14 percent from the end of last year. China’s tourism market began to recover in March, and the firm activated its travel recovery plan that month. The scheme has brought in over 350 tourist destinations, 500 air routes and 10,000 hotels.

The firm’s operating revenue in the second quarter will continue to drop between 67 percent and 77 percent from a year earlier because of the coronavirus’ sustained fallout, especially because of its outbreak overseas, the firm projected, notwithstanding its confidence in the future.

Editor: Ben Armour