Trip.com Offers Free Cancellations Amid Coronavirus Outbreak; Stock Gains Back Some Lost Ground
Asia’s largest travel service provider joins a number of other airline hotel partners in allowing free cancellations.
Trip.com (Nasdaq: TCOM) gained back a little ground in the market today after announcing that the company will provide customers free cancellations through early February due to the Wuhan coronavirus epidemic.
The recent precipitous fall in share price, rather than the good PR it earned from today's announcement, is the most likely reason for Tuesday's 5% bump. Some investors see a bargain in what they feel is only a temporary, virus-related recent dip in share price. Indeed, the coronavirus has been bad for travel stocks like Trip.com, whose stock price even after today's rise is still down nearly $6 per share since Jan.17.
The largest online travel service provider in Asia, which calls the move a "Safeguard Cancellation Guarantee," said in a statement today that it has implemented the policy to minimize economic losses and ensure travel safety. The move went into effect on Sunday.
Trip.com has joined a slew of airline and hotel partners in granting free cancellations for customer bookings as the virus spreads through mainland China. Asiana Airlines, Singapore Airlines, Hilton, Shangri-La, Intercontinental Hotel Group, Marriott, Hyatt, Accor, Melia and Jumerah, are among the others.
"Your participation will contribute to global efforts to control and prevent the spread of the disease, and will also be sincerely appreciated by the international community," Jane Sun, the chief executive officer of Trip.com said in a statement today.
She added, "Thank you for your understanding and support. We sincerely look forward to your participation in this program at this critical juncture. Let us come together and work as one cohesive unit and play our part in reducing the spread of the coronavirus."
For the third quarter, Trip.com's revenue reached $1.5 billion, up 12% year-over-year. Trip.com is set to report its 4th quarter financials on Feb. 26 and expects to achieve revenue year-over-year growth in the range of approximately 8% and 13%.