Profit in the three months to Sept. 30 at Tongcheng Travel Holdings, the big China online travel business whose investors include the country’s lnternet giant Tencent, rose by nearly 23% from a year earlier, buoyed by growth in ticketing and accommodation reservations, Tongcheng said in a filing yesterday after the close of trade at the Hong Kong Stock Exchange.
Profit rose to 985 million yuan, or about $139 million, from 803 million yuan. Revenue gained 10.4% to 5.5 billion yuan, helped by a record in accommodation bookings.
Tongcheng — also partly owned by Trip.com, one of the world’s largest online travel sites – said China’s travel industry “is undergoing a profound change, characterized by shifting consumer preferences towards immersive experiences. This transformation reflects a growing emphasis on emotional fulfillment in travel consumption, creating new consumption scenarios and growth opportunities for the industry.”
China’s upcoming five-year plan — to kick in next year — reaffirms the pivotal role the tourism industry in driving economic and social development, Tongcheng added.
On an investment call, the company expressed optimism about China’s travel industry outlook and was also upbeat about its purchase last month for about $340 million of Wanda Hotel Management (Hong Kong) Co. as a “second growth driver.”
Tongcheng’s shares have gained more than 15% in the past 12 months, giving it a market capitalization of more than $6 billion. Tencent owns 20% of Tongcheng and Trip.com also holds more than a fifth.
The company also announced a leadership shift that included the resignation of James Liang, the chairman of Trip.com and a long-time leader in China’s online travel industry, from his position as Tongcheng co-chairman starting yesterday due to personal reasons. He’ll will continue as a non-executive director. Jiang Hao, previously a non-executive director, became a co-chairman with Wu Zhixiang.
