Trip.com cut costs through COVID and was profitable again within three quarters

Trip.com, China's largest online travel agency, was hit before almost anyone else: as COVID-19 spread in January 2020, cancellations flooded in and the company was processing up to RMB 5 billion of refunds a day at the peak. First-quarter net revenue fell 42% year-on-year to RMB 4.7 billion, and the net loss reached RMB 5.4 billion including impairments and provisions.

Management acted immediately. CEO Jane Sun and chairman James Liang took zero salary, senior executives took pay cuts, and total costs fell 14% in Q1 — 31% excluding bad-debt provisions. The company also launched livestreaming sales and new products for the 'COVID-19 new normal' as China's domestic market bottomed out in February and began recovering.

The combination of cost discipline and domestic focus produced a fast turnaround: in Q3 2020 Trip.com reported net income of RMB 1.6 billion, its first profitable quarter of the year, with China domestic business near pre-COVID levels. Full-year 2020 revenue fell 49% to RMB 18.3 billion, but the lean structure set up the recovery — Trip.com filed for a Hong Kong secondary listing in April 2021.

Net income returned to RMB 1.6 billion in Q3 2020; 2020 revenue fell 49% to RMB 18.3 billion, and Trip.com raised fresh capital via a 2021 Hong Kong listing.

Leadership pay cuts signaled urgency and set the tone for cuts.

Cost reduction protected cash while revenue collapsed 42%.

Focusing on domestic China captured the fastest-recovering market.

Livestreaming and product innovation kept demand alive.

Cut costs the moment demand collapses and protect cash — a lean base turns the first sign of recovery into profit instead of more losses.

Trip.com completed its Hong Kong listing in 2021 as a hedge against US delisting risk, and as travel reopened its business recovered sharply. It entered the post-pandemic era with a lower cost base and fresh capital — stronger than most travel companies that had waited to cut.