Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>China's outbound tourism recovery started much later than others in the region</li>
<li>In particular, Taiwan &amp; Korea began ramping outbound travel earlier (in Q222)</li>
<li>As destinations, Thailand &amp; Vietnam recovered early, but now lag HK's growth</li>
</ul>


China's outbound tourism recovery started much later than others in the region
In particular, Taiwan &amp; Korea began ramping outbound travel earlier (in Q222)
As destinations, Thailand &amp; Vietnam recovered early, but now lag HK's growth


China's Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed, Not Slower

<ul>
<li>Chinese outbound and domestic air traffic activity improved sharply Y/Y in the January-February LNY travel period, but activity remains far below pre-Covid levels</li>
<li>Given constrained outbound air capacity, we're surprised to see relatively low (65-66%) passenger load factors reported by the leading Chinese airlines during LNY</li>
<li>If planes don't begin to fill up with Chinese tourists soon, we believe some investors may become disappointed in the pace of China's travel recovery </li>
</ul>


Chinese outbound and domestic air traffic activity improved sharply Y/Y in the January-February LNY travel period, but activity remains far below pre-Covid levels
Given constrained outbound air capacity, we're surprised to see relatively low (65-66%) passenger load factors reported by the leading Chinese airlines during LNY
If planes don't begin to fill up with Chinese tourists soon, we believe some investors may become disappointed in the pace of China's travel recovery 


TRACKING TRAFFIC/Chinese Tourism: LNY Traffic Points to Slow Recovery in 2023

Thematic (Sector/Industry)

<ul>
<li>On Monday evening in the US, <a href="https://www.smartkarma.com/entities/trip-com-group-ltd" target="_blank" data-smartkarma-citation="entities:180:1" rel="noopener">Trip.com (TCOM US)</a> reported Q422 results that beat low expectations, but shares in the US traded down about 3% in Tuesday's session</li>
<li>As for guidance, management offered few specifics but noted a sharp improvement in booking activity early in 2023, but also highlighted an outbound capacity bottleneck at the airlines</li>
<li>Just as Covid's negative impacts papered over the secular challenges facing Trip.com, the dramatic near-term recovery in travel activity also obscures longstanding threats</li>
</ul>


On Monday evening in the US, Trip.com (TCOM US) reported Q422 results that beat low expectations, but shares in the US traded down about 3% in Tuesday's session
As for guidance, management offered few specifics but noted a sharp improvement in booking activity early in 2023, but also highlighted an outbound capacity bottleneck at the airlines
Just as Covid's negative impacts papered over the secular challenges facing Trip.com, the dramatic near-term recovery in travel activity also obscures longstanding threats


Trip.com Q4/2022 Results: Back to Reality?

<ul>
<li>In this insight we chart the progress of China's tourism recovery vs pre-pandemic levels</li>
<li>In October 2024, Chinese <em>outbound</em> (international) demand finally reached pre-Covid levels</li>
<li>The recovery in <em>domestic</em> activity was completed earlier and more quickly than outbound</li>
</ul>


In this insight we chart the progress of China's tourism recovery vs pre-pandemic levels
In October 2024, Chinese outbound (international) demand finally reached pre-Covid levels
The recovery in domestic activity was completed earlier and more quickly than outbound


Monthly Chinese Tourism Tracker | Five Easy Charts Showing China's Tourism Recovery To Date

<ul>
<li>We compare Trip.com's Revenue, Operating Income, &amp; Net Income to the Chinese airlines</li>
<li>Trip.com has done a better job of converting revenue growth to improved profitability</li>
<li>Trip.com YTD execution impressive, but we see no near-term upside in share price</li>
</ul>


We compare Trip.com's Revenue, Operating Income, &amp; Net Income to the Chinese airlines
Trip.com has done a better job of converting revenue growth to improved profitability
Trip.com YTD execution impressive, but we see no near-term upside in share price


Monthly Chinese Tourism Tracker | Trip.com YTD 2024 Performance Vs. Three Leading Chinese Airlines

Thailand

Thai Airways International Public Company Limited is Thailand's national airline providing air transportation, freight and mail services on domestic and international routes including Asia, Europe, North America, Africa and South West Pacific.  The Company is a state enterprise which is controlled by the government and partly owned by the public.

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Thai Airways International (THAI TB)

China's Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed, Not Slower

In this insight we compare China's progress toward restoring outbound tourism activity to the progress shown by other major tourist sources in the...

Tracking Traffic

TRACKING TRAFFIC/Chinese Tourism: LNY Traffic Points to Slow Recovery in 2023

Jan-Feb air traffic shows the beginnings of a recovery in Chinese travel activity, but we're surprised to see outbound flights with load factors of...

Tracking Traffic

Trip.com Q4/2022 Results: Back to Reality?

As China emerges from Covid, old challenges remain for Trip.com. After posting solid Q422 results and pointing to signs of a strong recovery, these...

Daniel Hellberg

Monthly Chinese Tourism Tracker | Five Easy Charts Showing China's Tourism Recovery To Date

In this insight we illustrate the trajectory of China's ongoing recovery in outbound and domestic travel activity in five easy charts.

Tracking Traffic

Monthly Chinese Tourism Tracker | Trip.com YTD 2024 Performance Vs. Three Leading Chinese Airlines

We compare Trip.com's and the three leading Chinese airlines' YTD financial performance. Trip.com has done a better job vs the airlines of...

Tracking Traffic

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