Trip.com announces 1b yuan fund to ease suppliers' cash flow

China's largest online travel agency Trip.com launched on Thursday night a 1 billion yuan ($695 million) fund to relieve the cash flow burden of its suppliers as the country battles the novel coronavirus outbreak.

The supportive fund is included in the travel agency's latest released V plan to revive the badly hit Chinese tourism industry. According to the V plan, also announced on Thursday, Trip.com will return 50 percent of the marketing fees to hotels affected by the epidemic. Other life service providers will be exempted from commissions for a year.

The promotion fees which group travel service providers had submitted before the Spring Festival will all be returned. At least three months of fees for using the system of Trip.com will be returned. For the 8,000 physical stores that Trip.com has built all over China, they will be exempted from three months of management fees and their respective annual business target can be deferred by three months.

Trip.com has also teamed up with banks to provide more than 10 billion yuan of loans to the companies operating on its online platform. Financial requests from companies based in Hubei will be accepted preferentially.

Up to this date, Trip.com has provided more than 1.3 billion yuan to users and suppliers affected by the epidemic.

James Liang, chairman and co-founder of Trip.com, said they will also feel pressure in terms of financing if the epidemic and the suspension of work lasts longer than expected.

"But our pressure is far less than the small- and medium-sized service providers. Their difficulty affects the entire industry," said Liang.

As per a survey combining industry insights and data collected at Trip.com, the Chinese tourism industry will face a short-term loss of more than 1 trillion yuan during the epidemic. That number can reach 10 trillion yuan by the end of the year, or 10 percent of China's annual GDP.