Top Execs at China’s Largest Online Travel Site Forgo Salaries
Top Execs at China’s Largest Online Travel Site Forgo Salaries
(Bloomberg) --
Trip.com Group Ltd.’s top two executives will stop drawing salaries, part of a series of wage-cutting moves at China’s biggest online travel service provider to cope with the coronavirus outbreak.
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 added.
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 seen demand plummet 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; non-essential travel is all but forbidden. Last month, when the nation was the center of the outbreak, countries like U.S. and Japan warned citizens to avoid travel to China, further dampening demand for hotels and transportation. More recently, some Chinese cities have begun to restrict arrivals from overseas, 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 is still unclear. While maintaining confidence in the future, we must also take a rational view and prepare for a long-term fight against the epidemic,” Sun’s memo said.
Prior to the current public-health crisis, Trip.com’s business was also negatively impacted by the months-long pro-democracy protests in Hong Kong that severely curtailed visits to the city 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,” she said.
--With assistance from Natalie Lung.
To contact the reporter on this story: Jinshan Hong in Hong Kong at jhong214@bloomberg.net
To contact the editors responsible for this story: Rachel Chang at wchang98@bloomberg.net, Colum Murphy, Edwin Chan
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