Things are very different at Trip.com, which is fast-moving. It is also a relatively young company with a young workforce. With approximately 30,000 employees, the average age, explains Chen, is 28. “I feel like I’m back at university – people are so young!” she says. She was also keen to work for this company because it has a female leader – Jane Sun, the CEO of Trip.com Group – and the leadership team is also female. “That is quite unique in the technology industry,” Chen says. On a personal level, she says, it is inspiring to be working for such a CEO. “You have someone to look up to – someone who is leading a US$4bn business. In Asia, I have seen this more; in Europe it is much rarer,” she says, of women being in prominent leadership positions.
Also, the pace of business is very different to what she experienced in Europe. In a traditional company, for example, it could take 12 months or so for a new product to get to market. “At Trip.com we could have new products or new services on a weekly basis,” she says. “With an internet company, it is so fast – it is completely different from my previous job,” says Chen. And all these new products have the same treasury needs as a slow-moving product in a traditional company.
The demands of this fast-paced environment were perhaps nothing compared to the response that was needed as the COVID-19 pandemic unfolded. Chen had to steer the group’s treasury through the disruption, which was particularly challenging as the travel industry was one of the most severely impacted. Although it was challenging – and difficult at times – this experience has been a highlight of her career, providing her with more lessons for the future.
China experienced the outbreak of COVID-19 much earlier and locked down at the end of January 2020. Then a few months later in March, the global equity and bond markets crashed, causing a liquidity squeeze for many companies. “That was the most disruptive moment for the company,” says Chen. Trip.com was founded in 1999 so it had experienced something similar with the SARS outbreak in 2003. Unlike SARS, Covid was going to last longer than six months, however. Also, SARS was not global, and COVID-19 has had a much wider, global, impact. At the time COVID-19 started to spread, the company had an ongoing refinancing project, which at the outset Chen had expected to be a smooth process. However, because of COVID-19, it was disrupted and became very difficult and eventually took nine months to be completed.
Through this, however, Chen was able to pull off what she needed to for the company and was able to secure a US$1.3bn syndicated bank loan, and also a bond issuance. The market was very tight, Chen explains, and this had to be done in stages. Chen explains it was also difficult to manage the company’s relationships with its banks and convince them that the company was solid and could withstand these unprecedented events.
Perhaps the biggest issue that Chen had to deal with was the sheer number of cancellations because of the ban on travel. “There were two million cancellations that had to be reimbursed,” she says. This was an unexpected level of refunds, and also, there was a massive issue because of the delay in when the company receives the money back from its suppliers compared to the expectation of when the customers expect their refund. They have to refund the customers immediately whereas the airline, for example, which issued the ticket is still holding their money. “So, with a single event like this – if you have two million customers at the same time wanting a refund – it is a shock to the cash flow of the company,” says Chen.
This obviously was a concern to the company’s lenders at the time. “We were very transparent with the lenders and were able to show them the cash flow forecast and that we would be able to survive in the worst-case scenario – the company would still have no liquidity issue if they paid in their share and did the refinancing. Being so open with them was the right thing to do,” says Chen.
Amid the crisis, however, were opportunities for Trip.com. In 2003, when the SARS outbreak occurred, the company was able to gain market share and the same occurred this time around. “The travel demand is still there – it is delayed and has transformed to domestic travel,” says Chen. Also, competitors, particularly offline travel agencies or smaller firms, were not able to handle the cash flow shock and they have thus disappeared from the market. “For us it was an opportunity to consolidate our market position and share,” says Chen.
During the most recent crisis, Chen says that it has been important to get the support from the highest level of an organisation – particularly their banking partners – and to know when to go straight to the top. When dealing with the financial arrangements, because of the urgency of the situation, it was critical to go to the senior leaders rather than deal with the credit officer in a particular country. Chen explains how she was able to reach out to the chief risk officer of the bank immediately as she knew they would have a different view on the risk of the company in this extraordinary time. Also, Chen explains, because of the company’s good relationships – and the bank understanding the nature and solid footing of the company – they were able to secure US$1.8bn in financing at much better pricing than their competitors. Throughout the pandemic, liquidity was top of mind: “Cash was king – that was an absolute priority,” says Chen.
With these experiences behind her, Chen now has the breathing room to look ahead to the future. One of the priorities is to focus on technology, she says. For many years there weren’t many changes at the incumbent banks, with treasury management systems and SWIFT operating in the same way. But now, particularly over the last two years, there has been a lot of change, such as the use of APIs [application programming interfaces] in bank connectivity and FX trading, which were already implemented in Trip.com. Chen says she is particularly keen to make use of robotic process automation (RPA) and intends to implement this for the treasury’s operational work.
As Chen prepares for the next stage of her career, with all the new technology it entails, it is difficult – like Steve Jobs said – to connect the dots looking forward. No doubt her future endeavours will provide more life lessons and the dots will connect in the future as well.