Tuniu Corporation Q2 FY2026 earnings call

Overall Business Context

• The domestic travel market maintained steady growth in Q2 2026, supported by favorable policies including new spring break arrangements, while select outbound travel destinations faced market headwinds. 2News achieved non-GAAP profitability for the sixth consecutive quarter amid these challenges.

Product Development

• Expanded and refined the product portfolio to meet growing demand for personalized, flexible travel, adding more small-group tours, private tours, customized tours, self-driving tours, and hotel-centric self-guided travel products. Also expanded ancillary travel offerings including hotels, car rentals, and destination experiences.
• Launched new premium private tour products with upgraded services (custom recommendations, dedicated transportation) to serve high-end customer demand, alongside segmented products for family and senior travelers. The Q2 2026 premium Singapore summer tour already exceeded 10 million RMB in sales.

Sales & Channel Expansion

• Implemented targeted marketing initiatives including niche online seminars and product-specific live streaming to deepen customer engagement and drive higher conversion.
• Expanded live streaming channel partnerships across major platforms and with MCN agencies, leveraging 2News' product portfolio and fulfillment capabilities to grow sales and expand the customer base. Live streaming transaction volume grew double-digit year-over-year in Q2.
• Grew the offline store network to ~500 locations, with double-digit year-over-year transaction volume growth; offline stores expand service reach and support local sales growth.
• Saw increased demand for corporate customized travel solutions, and secured new partnerships with well-known enterprises to deliver team building and incentive travel programs.

Technology & Efficiency

• Integrated AI into multiple internal workflows (knowledge base building, promotional content creation, order processing) to improve employee efficiency and reduce operating costs.
• Upgraded the consumer-facing AI travel assistant Xiao Niu to support end-to-end booking of standalone travel products (flights, hotels, attraction tickets) and personalized itinerary planning based on customer preferences and travel scenarios.

For the second quarter of 2026: 1. Package Tours: Net revenue reached 121.1 million RMB, representing a 7% year-over-year increase, and accounted for 87% of the company's total net revenues. Growth was driven by expansion in offline tour offerings. 2. Other Revenues: Net revenue totaled 17.8 million RMB, a 17% year-over-year decrease, and contributed 13% of total net revenues. The decline was primarily caused by lower advertising service fees received from tourism boards and bureaus.

• For the third quarter of 2026, 2News expects net revenue to reach 202.1 million RMB to 212.2 million RMB, which represents 0% to 5% year-over-year growth compared to Q3 2025.
• Management confirms confidence in long-term travel demand growth and the resilience of both the travel industry and 2News' business, and targets maintaining profitability for the third quarter of 2026.

• Certain outbound travel destinations (including the Middle East and Africa) experienced significant headwinds, with Q2 2026 transaction volume to these regions down over 20% year-over-year, dragging down overall outbound performance. Suspended promotional activities for impacted destinations also reduced the company's advertising service revenue.
• Domestic self-guided travel products, which are growing faster than organized tours, have lower profitability than traditional organized tours, putting pressure on overall margin.
• Outbound travel markets continue to face broader macro and geopolitical uncertainties that limit growth, even as some regional destinations see healthy gains.
• All forward-looking forecasts are preliminary and subject to change based on evolving market conditions.

Q: What factors caused the net profit decline in Q2 2026, and can management provide an update on summer travel bookings and Q3 profitability outlook? / A: Net profit fell due to two main factors. First, key outbound destinations including the Middle East and Africa saw over 20% year-over-year transaction volume decline, pulling overall outbound GMV share down from 33%+ to 30% quarter-over-year, and suspended destination promotional activities cut advertising revenue by 70% year-over-year. Second, faster-growing domestic self-guided products have lower profit margins than traditional organized tours, pressuring overall margins. For summer 2026, domestic travel holds steady growth, with high-quality small-group and private tours in strong demand. Outbound remains uncertain: the Middle East still saw negative growth in July, but destinations like Singapore, Malaysia and the Americas are growing healthily. Bookings are more spread across months due to new holiday policies, with late September bookings for the combined Mid-Autumn Festival and National Day holiday already surging. While management does not provide a specific numeric target, it expects to deliver another profitable quarter.