Eva Lee was growing frustrated. After three years of insulation, lockdowns and, more recently, near-daily Covid testing, China was finally reopening its borders, and the 40-year-old lawyer was eager to travel. 

But as she scrolled the popular Qunar and Ctrip travel apps from her Beijing apartment, her options seemed limited. She considered going to the Philippines for some kite-surfing — but there were no direct or affordable flights to Boracay. She looked at Taipei to visit one of her best friends, but the country was still closed off to Chinese visitors, except for organized tour groups. 

Her best option was to fly to Macau, a semi-autonomous Chinese region and former Portuguese territory south of the mainland. There, at least, she could reunite with her parents, whom she hadn’t seen in three years, for the Lunar New Year holiday at the end of January. 

But Lee felt deflated. Before the pandemic these apps were brimming with cheap and varied flight options and accommodations. Lee had used them to travel far and wide in the pre-pandemic years; kite-surfing in Cuba, for instance, and visiting the wildlife in Serengeti National Park in Tanzania. Now she put her phone away, hoping to resume her search and quell her wanderlust later.

There are millions of Chinese travelers like her. When China announced on Dec. 26 that it was ending quarantine requirements for incoming travelers — essentially dropping three years of border restrictions — Chinese people collectively picked up their phones. International flight searches on Qunar jumped sevenfold within 15 minutes of the announcement. On Ctrip, searches for popular international destinations soared tenfold within 30 minutes of the announcement.

Collectively, we are all experiencing some kind of PTSD [from the pandemic]. Travel on the one hand can cure it, but also on the other hand, it can be affected by it.

Li Xiang, from Temple University

But while many are calling this pent-up demand “revenge travel,” it is unclear when things will return to normal. Experts say a confluence of factors — China’s slowing economy, diplomatic tensions, visa hassles (Chinese travelers need tourist visas to travel to U.S. and Europe) and a change in Chinese attitudes — have lead to a collective apprehension to jump on the next plane out of Shanghai. 

“When we talk about Chinese traveling again, they are going to dip their toe a little bit and do domestic travel first, then travel to neighboring countries,” says Li Xiang, chair of the department of tourism and hospitality management at Temple University, in Philadelphia. “Collectively, we are all experiencing some kind of PTSD [from the pandemic]. Travel on the one hand can cure it, but also on the other hand, it can be affected by it.” 

This hesitation to get back to the jet-setting habits of the past 20 years has far-reaching implications. China’s outbound travel market is the world’s largest. At its peak, in 2019, there were more than 155 million Chinese outbound travelers spending the equivalent of Portugal’s GDP. Thanks to a booming economy and friendlier international relations, Chinese travelers flocked to destinations like Germany and Australia, while cities like Athens and Paris grew accustomed to Chinese tastes, attitudes and spending habits. 

“For the first time in nearly a century, many Chinese people could afford to travel,” says Dali Yang, a political science professor focused on China at the University of Chicago. But Yang notes it wasn’t just about sightseeing. “Part of the reason for all that travel was the human desire to connect, to see, to explore,” he says. With travel, “comes a lot of contacts, business deals, new information, and more open minds.” 

In other words, the human-to-human interactions that helped fuel China’s rise as a world power. 

Much of this cross-cultural exchange was encouraged and enabled by Trip.com Group — China’s largest online travel agency and the parent company of Qunar and Ctrip, the apps Eva Lee was using. Since its founding in 1999, Trip.com and its famed customer service essentially held Chinese travelers’ hands as they ventured abroad for the first time. As a result, the company’s rise mirrored China’s. 

Trip.com’s global revenue topped $5 billion in 2019, positioning it as the world’s third largest online travel company after Amsterdam-based Booking.com and Seattle-based Expedia. It counted 400 million active users and operations in more than a dozen countries. And the group’s 2019 rebranding from Ctrip to Trip.com was largely seen as a nod to its global ambitions.

But its role connecting China with the rest of the world, and vice versa, came to an abrupt halt when the pandemic arrived. Chinese travelers were unable to leave the country and foreign visitors to China were locked out. The company suffered a huge downturn. Now, all over China, users are ready to travel again, but many — like Lee — are searching, hesitating and ultimately closing their apps.

Coaxing them out again will be a challenge. Trip.com’s ability to recover, experts say, will depend on how fast and how far Chinese people decide to travel — and how at home they will feel in a world that has changed considerably over the past three years. No amount of marketing, after all, can overcome the country’s current geopolitical tensions. 

“If China is able to re-engage with the world, if they’re able to continue down the line of putting a friendlier face on and trying to work with countries, then that will bode well for a company like Trip.com,” says Paul Haenle, a China-focused researcher and director at the Carnegie Endowment for International Peace.

So far, it seems, Chinese travelers are opting to stay in more familiar territory. Like Lee, Rachel Peng was an adventurous traveler before the pandemic, trotting off to far-flung places such as the Arctic Circle and Iran. But now the 39-year-old financial consultant in Beijing is only considering planning trips to nearby Hong Kong and Macau, “which would need not too much thought, nor too much preparation, and would take up less time,” she says. “I might still be in recovery mode.”

LIFT OFF

Trip.com’s four co-founders — James Jianzhang Liang, Min Fan, Neil Shen and Qi Ji — are all business legends. Qi Ji, for instance, founded H World Group, one of China’s largest hotel management companies, and Neil Shen founded and manages Sequoia China, an affiliate of the Silicon Valley venture capital firm.

But the four friends got started back in 1999, when over dinner at a Shanghai restaurant they decided to form Ctrip. At the time, travel agencies in China were mostly state-owned and catered to businesspeople and tour groups rather than individuals traveling for leisure. The friends wanted to build an online company that could mirror, and eventually compete with, newly launched Western online travel agencies such as Priceline.com and Expedia.

The goal was to offer exemplary customer service and make travel as easy and seamless as possible. Ctrip launched first as a travel review website — similar to what TripAdvisor is today — before moving into sales, first for hotel bookings and later by acquiring a small air-ticketing agency. 

Liang — who had a PhD in economics from Stanford University, a master’s in computer science from the Georgia Institute of Technology and nearly a decade of experience at Oracle in the U.S. and China — took the role of chief executive and set about developing an unusual call center system. Employees would not only answer questions and make bookings, but also dispatch couriers to physically deliver tickets to customers across the country. 

Fritz Demopoulos, co-founder of Qunar¹Founded in 2005, Qunar initially competed with Ctrip. For years, Baidu held a majority stake in Qunar, but the company was acquired by Trip.com Group in 2015. Now Baidu owns 10.8 percent of Trip.com Group. and currently an investor in media and Internet companies through Queen’s Road Capital, remembers ordering airplane tickets on Ctrip from a Starbucks in Beijing in the early 2000s and waiting at the coffee shop for his ticket to be delivered.

“It was just exceptional customer service,” Demopoulos says. It stood out, he notes, because Ctrip was one of the first companies in China to adhere to Six Sigma, an international quality methodology, at a time when Chinese companies were not often held accountable for delivering faulty products or services. Chinese travel agencies were notoriously slow, frustrating and expensive, Demopoulos says. 

“Traditional agents would only sell you the absolute most expensive ticket or the ticket they got the biggest commission on,” he says. “Ctrip wouldn’t do that. You had visibility of the options, and they pushed what was suitable to you. Everyone loved them.”

When the company went public on Nasdaq in 2003²The company also listed on the Hong Kong Stock Exchange in 2021., raising $75.6 million in its initial public offering. MarketWatch dubbed it the “Chinese Expedia.” Its stock price nearly doubled on the first day of trading — an early sign of confidence in its potential.

Indeed, at the time, China’s whole geopolitical and economic context seemed to support Ctrip’s success. 

In the mid-2000s, the Chinese government started pushing online transactions, benefitting its bevy of early tech giants, including Alibaba, Tencent and Baidu. It also mandated that all travel agencies transition to selling e-tickets, a switch Ctrip capitalized on. 

At the same time, the median disposable income per household grew eightfold between 2000 and 2019, allowing Chinese people to partake in global tourism — in most cases for the very first time.

Kate Su, a 42-year-old intellectual property lawyer in Beijing, says she had only been abroad once before — to Singapore, as part of a tour group — when she began taking regular biannual trips abroad in 2010. She has now visited more than 20 countries, most of them in Europe, and says her favorite trips were the ones where she eschewed tour groups and interacted with the local cultures. Driving across Germany, Austria, Switzerland and the Czech Republic, for instance, she and her husband got lost, but she remembers with fondness the locals’ goodwill in helping them get back on track.

“Those situations, in retrospect, are more interesting than visiting scenic spots,” she says.

No matter whether there is a tsunami in Japan, an earthquake in Nepal or Las Vegas shootings, our team will be able to reach out to our consumers within minutes.

Jane Jie Sun, Trip.com’s current CEO

In many ways, Trip.com facilitated these interactions, since it gave Chinese travelers the confidence to venture out on their own. Anecdotes about the company’s legendary customer service abound — from negotiating better rooms at hotels to rebooking canceled flights faster than if travelers had waited in line at the airport airline counter.

“No matter whether there is a tsunami in Japan, an earthquake in Nepal or Las Vegas shootings, our team will be able to reach out to our consumers within minutes,” Jane Jie Sun, Trip.com’s current CEO, told me in an interview in 2021. “And the very next day, if our customers prefer to come back to their home country, we’ll be able to do that.” (Sun declined to comment for this article.) 

Sun took over from Liang in 2016. An accountant by training, she had experience in Silicon Valley — at KPMG and Applied Materials — and was hired originally as Trip.com’s chief financial officer. As CEO, she is known, primarily, for doubling down on customer service and for promoting policies to help female employees, including flexibility for pregnant employees and egg freezing benefits. 

She has also overseen the company’s international expansion.

In 2016, Ctrip bought Skyscanner, an Edinburgh-based search engine and online travel agency popular in Europe, for $1.7 billion. According to current and former employees, Skyscanner retains a high degree of independence, including making its own budgeting, hiring and communications decisions.

In 2017, Ctrip also bought Trip.com, a U.S. startup, and began strategizing ways to encourage foreign travel to China. According to sources close to the company, management lobbied the Chinese government to provide foreigners with access to uncensored Internet and to simplify immigration procedures at the airport. (Trip.com declined to comment about its lobbying efforts with the Chinese government.)

By late 2019, there seemed to be no limits to where the company could go. With a new name and a new slogan — “To pursue the perfect trip for a better world” — it pulled out all the stops to celebrate its 20th birthday, including lighting up the iconic Oriental Pearl TV Tower in Shanghai in blue and yellow, Ctrip’s brand colors. Further down Huangpu River, at the cavernous Shanghai Expo center, Trip.com’s executives talked about their global ambitions: becoming the world’s leading international travel brand by 2025 and “the undisputed most valuable and respected leader in online travel” by 2030.

TURBULENCE 

Two months later, the coronavirus pandemic hit central China and threw a wrench into those plans. When Beijing decided to shut its borders in March 2020, the flood of Chinese outbound travel effectively turned off, like a tap, and Trip.com was among the first to feel the pinch: In the first quarter of 2020, the company posted a $754 million loss.

Trip.com takes pride in having tried to navigate the bumpy last three years with as much grace as possible. For instance, it attributes some of its early giant losses to its unorthodox decision to refund customers for their pandemic-related cancellations before the company itself received refunds from its partners. Sun and Liang, who is executive chairman, also forgoed salaries in 2020, while top executives took a 50 percent cut. Liang told state broadcaster CGTN in 2021 that the company enacted some cuts in the first pandemic year but avoided “large-scale layoffs.” 

Liang initially agreed to an interview with The Wire China, but later postponed it until after the article publication’s deadline.

In terms of strategy, Trip.com adapted to the changing circumstances as best it could: first, it doubled down on domestic travel, and then in 2022 — when lockdowns and strict quarantine requirements further restricted travel — it promoted activities that didn’t require leaving one’s city or province. Ahead of the October national holiday, for instance, Trip.com partnered with local tourist attractions for novelty experiences, such as breakfasts with tigers at the Shanghai Wild Animal Park or dinner packages at an underwater restaurant in Shanghai. 

The company’s ability to offer hotel packages and staycation products helped it consolidate market share, says Charlie Li, founder of Travel Daily China, a publication focused on the tourism industry. Smaller tour agencies simply didn’t have the same range of products. Li expects Trip.com to continue its international expansion eventually, but he warns there are still competitors at its heels.

“Tongcheng already launched an English booking platform before the pandemic and is now more focused on South-East Asia,” he says. “Fliggy, the travel unit of Alibaba, has decided to go independent, and they keep exploring potential opportunities, including overseas M&A deals, to grow beyond the Alibaba ecosystem and even beyond China.”

Trip.com has also watched Beijing’s crackdown on tech platforms like Ant Group and Didi with concern. Sun, ever the accountant, rarely if ever deviates from official talking points and has publicly praised the Chinese government’s pandemic response. But Liang is more outspoken. 

As an active research professor of applied economics at Peking University, Liang has written several books on demographics and has been vocal over the years about China’s need to relinquish its one-child, and later two-child, policy to support economic growth. In May, his Weibo account, which has 817,000 followers, was suspended shortly after he authored a piece on WeChat arguing that “zero-Covid” policies risked inflicting more pain on people’s life expectancies and the economy than the virus itself. 

Still, Trip.com is one of the few platform monopolies that has managed to evade Beijing’s ire, and those close to the company say it has been trying to keep a low profile in the post-Covid and post-crackdown environment. 

In 2022, for instance, shortly after the start of the Ukraine war, managers in Shanghai decided against aligning with the sentiment of the majority of the company’s European customers. According to sources close to the discussions, Trip.com’s subsidiary in Scotland, Skyscanner, was planning a campaign promising to fast-track job applications from people affected by the Ukraine war. Trip.com considered joining the messaging but ultimately decided to stay out of it. Beijing, at the time, was sending mixed and confusing signals about whether it supported Russia’s invasion of Ukraine. 

When asked about the incident, Trip.com said questions about Skyscanner’s hiring should be directed to the subsidiary.

Despite its best efforts, the company is still limping out of the pandemic: in the second quarter of 2022, it reduced its operating expenses by as much as 44 percent, compared to the pre-pandemic period. Although Trip.com says overseas travel during the Lunar New Year holiday increased fivefold on its apps compared to the holiday period last year, the most optimistic forecasts from industry experts predict that by this summer, Chinese travel will only reach 50 to 70 percent of its 2019 levels. 

REBOOKED?

The decision to venture abroad again will amount to “either a discovery or a rediscovery process” for many Chinese people, says Yang of the University of Chicago. 

Or it could be both. After booking a last-minute trip to Cambodia during the Lunar New Year holiday, Cecily Huang, a communications expert in Beijing, describes how stepping into another country after three years of isolation was a surprisingly emotional experience. 

“First, it’s the freedom and the idea of being able to move around, not having to get PCR tests, not being worried about getting stuck [during a snap lockdown], not worrying about not being able to go home — that’s a huge thing,” Huang says. “And secondly, just seeing people of different nationalities, the diversity, it was exciting. You see the world, you see you’re connected with the world, you feel like you’re part of the normal world.” 

When we talk about Chinese outbound travel resuming to the pre-pandemic level, it’s not just about Chinese tourists wanting to go to your place. You also need to open your arms and welcome them. It takes two to dance.

Li Xiang, from Temple University

But Huang was also saddened and surprised to notice pushback against her Chinese identity. At one point, she says, another foreign traveler suggested she not tell people she was Chinese. 

Indeed, tourism experts say Chinese travelers aren’t picking up where they left off. For them, this next phase will be defined by new economic and geopolitical considerations.

Attitudes toward China in Western countries, for instance, have plunged in recent years. A Pew study in June showed negative views of China remained at or near historic highs in 19 countries surveyed, reaching a record 82 percent unfavorable view in the United States. 

Such tensions affect Chinese people’s desire to travel abroad and impact their choices of destinations. For example, although the U.S. used to be a top destination for Chinese travelers, a study by Temple University researchers in 2019 showed 53 percent of Chinese people surveyed indicated the ongoing trade war between China and the Trump administration was affecting their decision to travel to the United States.

“When we talk about Chinese outbound travel resuming to the pre-pandemic level, it’s not just about Chinese tourists wanting to go to your place,” says Li, at Temple University. “You also need to open your arms and welcome them. It takes two to dance.”

Outside of Macau and Hong Kong, Chinese travelers’ number one destination right now seems to be Thailand, which embraced the resurgence of Chinese tourism by launching a national campaign called “China is back.” By contrast, there has already been drama between China and South Korea and Japan after the latter two countries were among a dozen to impose PCR testing for travelers coming from China in January, as well as centralized quarantine for those testing positive. China labeled the move “discriminatory” and suspended short-term visas for South Korean and Japanese visitors in response.

Trip.com is hoping to help smooth things over where it can. It has launched a “Travel Revival Plan” meant to “reunite destinations with Chinese travelers,” which includes working with destinations to prepare for Chinese travelers’ arrival and “reviving consumer confidence,” according to a statement by the company. 

But even with smoother relations, experts note that Chinese travelers will only go as far as their pocketbooks will take them — and those might need some repair still. The economy last year grew by only 3 percent under the pressure of widespread lockdowns, amounting to the country’s second-weakest economic performance since the end of Mao Zedong’s Cultural Revolution in 1976. Meanwhile, youth unemployment reached a record high of almost 20 percent in June. 

With price hikes in both flights and accommodations, Chinese travelers who chose remote destinations before the pandemic might now opt to stay closer to home. 

Taken together, the challenges facing Chinese tourism contribute to the country’s sense of estrangement from the West, and vice versa. Joerg Wuttke, president of the European Union Chamber of Commerce in China, says during recent meetings in Brussels and Berlin, just mentioning China “nearly had a toxic taste to it.”

“There has been a complete breakdown in science, in cultural exchanges — everything that matters in human-to-human contact has been idle,” he says. “I hope that the opening up means people will start traveling again to witness one another and talk face to face.”

When they’re ready, Trip.com hopes to take them there.

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