Signage at Trip.com Group Ltd head office. in Shanghai, China on Monday, August 28, 2023.
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Shares of Chinese online travel service provider Trip.com plunged 19.23% in Hong Kong on Thursday after Beijing opened an antitrust investigation into the company, making it the worst performer on the Hang Seng Index.
The fall also marks the stock’s worst day in Hong Kong since its listing in April 2021. Shares had closed down 17% on Wednesday in New York.
China’s State Administration for Market Regulation said Wednesday evening that it was investigating Trip.com for “alleged abuse of market dominance and monopolistic practices,” according to a CNBC translation of the Mandarin statement.
Trip.com is the largest online travel provider in Asia by market capitalization and one of the largest in the world. The company has stakes in British flight aggregator Skyscanner, Indian travel company MakeMyTrip, as well as several Chinese travel providers.
Trip.com said in a statement that it would “actively cooperate” with the investigation and added that its business operations were operating as usual.
The case could have long-term consequences for the company, according to Kai Wang, senior equity analyst at Morningstar.
Wang said that “several local tourism associations have complained that Trip.com commits the same violations as the other two platforms, by forcing local merchants to sign exclusive agreements with the platform.” Trip.com will then increase merchant commissions after signing these agreements.
Citing previous high-profile antitrust cases involving Alibaba and Meituan, as well as previous government warnings, Wang said Trip.com could face a “hefty fine.”
SAMR investigated Chinese tech giant Alibaba in 2021, fining it a record 18.2 billion yuan ($2.8 billion) after it was found guilty of monopolistic practices.
“This is not the first time Trip.com has clashed with the government over consumer violations, as the company was fined for forced bundling of value-added services in 2017. This could also make the government even angrier given its repeat offender status,” he added.
The Trip.com survey comes as Chinese tourism is expected to increase this year, with travel marketing and technology firm China Trading Desk estimating that mainland Chinese travelers are expected to make between 165 million and 175 million cross-border trips in 2026, up from around 155 million last year.
The Chinese New Year holiday, which sees hundreds of millions of people return to their hometowns, will be celebrated between February 15 and 23.
Travel consultancy Dragon Trail International said that in 2025, 501 million Chinese traveled domestically during the Chinese New Year holiday period, an increase of 5.9 percent year-on-year. Tourism spending during this period reached 6.77 billion yuan, an increase of 7 percent.
