Top Execs at China’s Largest Online Travel Site Forgo Salaries
(Bloomberg) ― Trip.com Group Ltd.’s top two executives will stop drawing salaries as part of a series of cost-cutting moves at China’s biggest online travel service provider in response to the coronavirus epidemic.
Chairman James Liang and Chief Executive Officer Jane Sun will no longer receive salaries beginning this month, and other members of the company’s top management will also voluntarily cut theirs by as much as half until the travel industry recovers, Sun wrote in an internal memo reviewed by Bloomberg News.
Apart from front-line workers in the company’s service department, pay increases for other employees will also be suspended temporarily, the memo said.
Trip.com, known domestically as Ctrip, is one of the largest players in an industry that’s been walloped by the global epidemic. The company, which provides everything from hotel and flight reservations to packaged tours and train ticketing, has experienced a plunge in demand as Covid-19 spreads around the world and forces a cascade of travel advisories.
In China, authorities and large employers have encouraged people to stay home. Shopping malls and restaurants are empty; amusement parks and theaters are closed; nonessential travel is all but forbidden. Last month, when the nation was the center of the outbreak, countries including the U.S. and Japan warned citizens to avoid travel to China, further depressing demand for hotels and transportation. More recently, some Chinese cities have begun to restrict arrivals from abroad as growing coronavirus outbreaks elsewhere prompt Beijing to enact curbs on inbound travel.
“At present, the domestic epidemic situation is entering a relatively stable stage, but the prospects for the global epidemic situation are still unclear,” Sun said in the memo. “While maintaining confidence in the future, we must also take a rational view and prepare for a long-term fight against the epidemic.”
Before the current public-health crisis, Trip.com’s business was also hurt by the months-long pro-democracy protests in Hong Kong that severely curtailed visits by mainland Chinese tourists.
“This measure comes at a time when virus outbreak extends globally and makes it uncertain when to expect a recovery in the travel industry,” said SWS Research Co. analyst Mandy Jia. “But Trip.com is the No. 1 leader in the online travel agency industry. The virus crisis may shut down some smaller businesses and benefit the industry leader.”
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