News Stories · Customer Centricity - Leadership

How Trip, Asia’s biggest online travel group, adjusted to the pandemic Group’s Chief Executive Jane Sun cites a return to business travel and bets on technology and service for future prosperity.
July 2021
How Trip, Asia’s biggest online travel group, adjusted to the pandemic - IMD Business School

With lockdowns and closed borders, few sectors have suffered more from COVID-19 than international tourism. So it is only appropriate that travel should be an early indicator of any return to normality as vaccines and inoculation spread.

“The fourth quarter of 2020 was the most difficult quarter for us,” Jane Sun, Chief Executive Officer of Group, told a group of leaders gathered for IMD’s OWP liVe program. “China was the first in and first out.”

Sun, who spent almost 20 years in the US before returning to her native Shanghai, should know. The Group has grown to become the biggest online travel service in Asia, with 400m registered users booking 700m high speed train tickets, 350m air tickets and 315m hotels a year.

Since the relaxation of domestic restrictions, the group, which now has 45,000 employees, has seen a resurgence in business. Sales of high-speed rail tickets in the first quarter of 2021 rose by 20% compared with the comparable pre-pandemic first quarter of 2019; hotel bookings were more than 50% higher, while car rental reservations surged an eye-popping 300%, albeit from a low base.

“Business travel is booming and growing faster than leisure.” Sun ascribed the development to the need for face-to-face meetings, despite the popularity of teleconferencing. “There are lots of replacement tools for one to one. But if you’re addressing more than 100 or 200 people, that’s very hard to replace by Zoom if borders are open”.

But while travel within China has recovered sharply and may even be exceeding pre-pandemic levels, international movement remains severely depressed, acknowledged Sun, CEO since 2016 and a 16-year company veteran, having previously served as Chief Financial Officer and Chief Operating Officer.

“The real challenge is cross-border transactions. Structurally I think demand is still pent up for travel abroad. Normally, more than 50% of our high-end customers would go abroad.”

Sun cited the extraordinary example of the group’s most lavish tour, a limited number, 80-day, no expenses spared round-the-world trip costing an eye popping $200,000 a head. “Guess how long it took to sell out: 17 seconds!”

“Recovery starts from the top”, she noted. But even the average Chinese visitor to Hawaii, a popular leisure destination, spends $2,000 a day, demonstrating the economic impact of tourism. “That just shows you the buying power of the Chinese consumer.” For a particularly tourist-oriented destination, such as Thailand, inbound travel is a big money spinner, accounting for almost 13% of gross domestic product, she said.

Much of Group’s success stems from technology that enables outstanding service and keen pricing. So vast are the group’s databanks that sales representatives can propose packages – say for a passenger seeking a business class seat from Shanghai to London – that an airport limousine, hotel reservation, Michelin-starred restaurant booking and a one-day tour can be added instantly, highlighting the value proposition of an integrated business model.

Technology also comes in to play in emergencies. The deadly 2017 shooting from a hotel bedroom in Las Vegas prompted the group to trawl its databanks within seconds, identifying customers in the city, which enabled the group to offer advice on where the danger was, and, as required, arrange for local drivers to take them to other hotels, where hot meals and showers were waiting. The service even included a return flight home the next day, if requested.

Similarly, when adverse weather hits, a domestic customer whose flight is cancelled is swiftly offered a high-speed rail ticket, with the waiting limousine redirected from airport to railway station, and the hotel warned of late arrival. “It’s peace of mind we provide,” she says.

Calls are answered within 20 seconds, and most arrangements can be made within two minutes. The group even offers to reserve airplane seats within an hour of take-off, depending on the customer’s location. Group’s technology stretches to algorithms tailored clients’ specific needs. Business travellers, for example, tend to prioritize reliability over price; most students, by contrast, are budget conscious. “Different people are offered different products depending on their economic power and differing interests.”

Whether the pandemic will inevitably take tourism upmarket – with consequences for budget airlines and cheap hotels – remains unclear. But some trends are already apparent, said Sun.

First, a universal emphasis on safety and hygiene, reflected in demand for masks, hand sanitizers and the like, has emerged. More tellingly, post-pandemic bookings show people prefer travelling in smaller groups, say, with a private driver, over a coach with 50 others. Unsurprisingly, she has also seen greater emphasis on packages offering flexibility and no fuss cancellation, just in case of last-minute border closures or regulatory changes. “No government has had a rehearsal for this before”, she said.