In 2018, Chinese tourists made 150 million international trips, and four years later, China became the world’s largest outbound travel market. Within China, billions of domestic trips are made each year. But in 2020, those figures will look a lot different.

(Image credit: TechNode/Nicole Jao)

The coronavirus outbreak began spreading across the country during Chunyun, the Spring Festival rush, when hundreds of millions of people travel home or abroad for family reunions. Recognizing that the peak travel season was the perfect storm for a rapidly spreading infection, the government quickly locked down a number of cities and implemented strict travel restrictions, paralyzing most of the country.

Since then, China’s online travel agency platforms, along with airlines and railways, have scrambled to accommodate millions of ticket and reservation cancellation requests by drastically expanding favorable cancellation policies and offering full refunds to frustrated customers.

Meituan’s core on-demand delivery service unit, which accounts for nearly 60% of total revenue, was one of the few spared by the epidemic. However, Meituan’s “in-store, hotel, and travel” segment, which accounts for a quarter of its revenue, has seen great disruption.

Coping with Covid-19

In January, China’s aviation and railway authorities requested that online ticketing agents grant free cancellations and ticket changes to passengers who needed to alter their travel plans. The policy applied to train, plane, and bus tickets purchased before Jan. 24.

Most of the major travel booking platforms revised cancellation policies for air, rail, hotel, and attraction bookings in compliance with the request. For example, according to Meituan’s revised policy, tickets for visits before Feb. 8 to domestic scenic spots and attractions could be fully refunded. Plane and train tickets purchased before Jan. 24 were also eligible for a full refund. The company said it would help customers negotiate with hotels for free cancellation or reservation changes. 

Other travel booking platforms, including Ctrip, Qunar, Mafengwo, and Fliggy, took similar measures.

Naturally, paying out all these refunds to travelers has strained the cash flow of these online travel platforms., the owner of Meituan’s online travel booking rival Ctrip, is reportedly planning to take out a $1.2 billion loan for refinancing and working capital. In the days following the epidemic’s peak in China, Ctrip processed (link in Chinese) millions of bookings, including countless canceled orders and requests for date changes.

Fliggy, the ticket-booking site owned by Alibaba, estimated that domestic bookings had dropped by 70% to 80%, and international bookings had declined by 40% to 50%.

The impact goes beyond the financial. Deploying the manpower capable of processing millions of cancellations and change requests in a matter of days proved to be another challenge for the travel platforms. Many disgruntled customers went online to vent their dissatisfaction about the cancellation process.

Many online booking platforms have attempted to alleviate the situation by providing special funds for partners in the travel industry who have struggled with the tidal wave of cancellations.

Meituan launched a RMB 100 million (about $14 million) fund to support businesses in the travel and hotel industry. Airbnb China established a $1 million fund to help respond to the crisis. Ctrip has set aside RMB 1 billion to stimulate tourism-related consumption and RMB 1 billion financial support for partners.

Far-reaching, long-lasting impact

China Tourism Academy expects revenue from tourism in 2020 to drop by RMB 1.18 trillion (around $167.72 billion)—a 21% decline.

A downturn of one-fifth for the world’s largest outbound tourism market does not bode well for the global tourism industry. In 2002, before the SARS outbreak, China’s contribution to the global travel industry was 5%. It has since grown to around 18%.

The impact of the Covid-19 outbreak is by no means limited to China’s domestic travel. Many international carriers suspended or restricted routes to Wuhan, the epicenter of the outbreak, as well as to major cities including Beijing, Hong Kong, and Shanghai.

Chinese and foreign airlines have processed more than 20 million refund requests, totaling over RMB 20 billion, according to Chinese media reports.

According to the International Air Transport Association (IATA), the industry stands to lose around $29 billion in global passenger revenues this year.

The demand for travel is plummeting and will likely remain low as the viral epidemic continues to spread to other countries.

Still, the Chinese authorities are putting on a brave face, urging tourism businesses in China to reopen.

More than 300 scenic spots and tourist attractions in the provinces of Zhejiang, Jiangsu, Jiangxi, Sichuan, Anhui, Henan, Guangxi, and Hainan have reopened.

The Ministry of Culture and Tourism issued a set of guidelines for the reopening of tourist attractions, including requiring tourists to register with real names, contact, and transportation information. Online booking platforms including Meituan and Ctrip have implemented the real-name ticketing system.

“Based on our estimation, we’re relatively optimistic about China’s tourism economy for 2020. It’s highly likely that tourism consumption in China will rebound. Many subjects of our recent surveys said when the epidemic ends, they will take a tour,” said Dai Bin, the head of China Tourism Academy.

Chinese consumers seem eager to step out for some fresh air. According to the Blue Book of China’s Tourism Economy 2020, 71.5% of Chinese said they would travel after the epidemic but planned to wait until the situation settles, while 20.7% said they would travel as soon as the outbreak is over.

Optimistic experts in China expect the tourism market to rebound in a “retaliatory” manner about three to six months after the outbreak is eliminated, according to the state-owned CGTN media outlet.

However, this optimism is not shared by experts outside of China. Some believe the global travel industry may not recover for years.

What it means for Meituan

Meituan started offering hotel booking services as early as 2013, and began to consolidate its travel unit in 2015 with the launch of air ticketing and the acquisition of Kuxun from TripAdvisor.

In 2018, Meituan Hotels was ranked first in China by volume and nights booked, exceeding the combined room nights booked on Ctrip, Qunar, and Tongcheng-Elong, according to market research firm Trustdata. Meituan continued to lead hotel bookings in terms of room nights reserved, accounting for more than 47% of the market.

Compared to other online booking platforms that are solely travel-oriented, Meituan has a much more diversified business portfolio.

Citibank estimates that Meituan’s total annual net income will drop 21% due to the impact of the Covid-19 outbreak on its travel and delivery businesses; nevertheless, their overall forecast of the company’s 2020 outlook was optimistic.

Ticket-booking giant Ctrip, on the other hand, seems to have taken a harder hit. On Monday, CEO Sun Jie announced in an internal email that he and co-founder Liang Jianzhan will stop drawing a salary from March onwards. Some management-level staff have also agreed to slash their salary by as much as half.

Whether the impact of the Covid-19 outbreak lasts for months or years, Meituan will likely survive it. The epidemic certainly presents the biggest hurdles that Meituan’s travel arm has faced to date. However, compared with other online ticket booking platforms, Meituan is positioned more strategically with its diversified businesses that range from on-demand delivery to travel booking to bike rental. The negative impact on its travel and hotel booking business can be offset by its other services—such as online grocery delivery, which has seen growing demand during the outbreak.

Nicole Jao is a reporter based in Beijing. She’s passionate about emerging trends, news, and stories of human interest within the world of technology. Connect with her on Twitter or via email:

Emma Lee (Li Xin) was TechNode's e-commerce and new retail reporter until June 2022, when she moved to Sixth Tone to cover technology and consumption. Get in touch with her via or Twitter.