Shanghai, China — Shares of Trip.com Group Ltd., a leading online travel service provider, plummeted nearly 22% in Hong Kong trading on Thursday after authorities in Beijing launched an antitrust investigation into the company. This decline marked the most significant drop for Trip.com since it went public in April 2021, following a previous 17% decline in New York the day before.
The State Administration for Market Regulation (SAMR) announced late Wednesday that it was probing Trip.com for alleged abuse of its dominant position in the market and monopolistic behavior, raising concerns about the company’s competitive practices. This investigation echoes previous actions taken by the Chinese government against other major technology firms, notably Alibaba, which was fined a record 18.2 billion yuan ($2.8 billion) in 2021 for similar violations.
Trip.com is the largest travel provider in Asia by market capitalization and ranks among the largest globally. The company has significant investments in various international travel brands, including UK-based flight aggregator Skyscanner and Indian travel firm MakeMyTrip, as well as numerous Chinese travel agencies.
In response to the investigation, Trip.com stated that it would cooperate fully with the SAMR and assured that its daily operations were continuing as usual. Despite the turmoil, the company remains well-positioned in a recovering tourism market.
Analysts project that Chinese tourism is poised for recovery this year, with estimates suggesting that cross-border travel by mainland Chinese could rise to between 165 million and 175 million trips by 2026, up from 155 million in 2022. The upcoming Chinese New Year holiday, observed between February 5 and 23, is expected to see significant travel activity, as millions return to their hometowns.
Travel consultancy Dragon Trail International reported a notable increase in domestic travel during the same holiday period last year, with 501 million travelers recorded, marking a 5.9% rise compared to the previous year. Tourism spending also surged, reaching 6.77 billion yuan, a 7% increase from the prior year.
As consumer travel demand rebounds, the scrutiny on major players like Trip.com highlights the regulatory landscape in China, where government oversight of business practices is increasingly stringent. The impact of this investigation on the company’s market position and the broader travel industry remains to be seen as authorities continue their enforcement efforts against perceived monopolistic behavior.
