What happened
Trip.com (TCOM 0.72%) investors lost ground to the market this week. The Chinese travel specialist fell 14% through Thursday trading, according to data provided by S&P Global Market Intelligence, compared to a 0.8% increase in the wider market. That didn't derail Trip.com's wider positive performance, though, as shares are still comfortably beating the 23% decrease in the S&P 500 so far in 2022.
Its outperformance gap shrank this week, though, due to worries about the impact a global growth slowdown might have on its core travel markets.
So what
The International Monetary Fund this week downgraded its estimate of economic growth in 2023. That news initially helped send stock much lower on Tuesday, particularly in the travel industry. The IMF cited decelerating growth in China as a key factor behind its lowered outlook, so it makes sense that Trip.com's stock would react to the prospect of weaker sales.
The company's last earnings update didn't contain evidence of such a slowdown, though. Instead, management cited building momentum in the global travel industry through September. "The fundamental demand for travel remained solid," CEO Jane Sun said on Sept. 21.
Investors still worried a bit more about that momentum hitting a speed bump as the year wraps up.
Now what
The next few weeks will bring much more clarity around travel trends, with major U.S. airlines and travel platforms all set to announce Q3 earnings results. These updates, along with any additional news that affects Wall Street's judgment about global growth trends, will likely continue to drive returns in Trip.com's stock until the company issues its own update in mid-December.
In the meantime, investors should expect lots of volatility in this travel and tourism stock, even though its business appeared to be on the upswing through early September.
