Tuniu Corp’s Earnings Call: Growth Amid Challenges

Tuniu Corp ((TOUR)) has held its Q1 earnings call. Read on for the main highlights of the call.

Tuniu Corp’s recent earnings call presented a mixed sentiment, with notable growth in certain segments like packaged tours and live streaming channels, contrasted by challenges such as decreased other revenues, increased operating expenses, and a net loss. The company’s strategic moves, including the introduction of AI technology and the expansion of offline stores, are promising, yet the financial figures highlight areas that need attention.

Packaged Tours Revenue Growth

Tuniu Corp reported a significant 19% year-over-year increase in revenue from packaged tours, primarily driven by the growth in organized tours. This segment’s robust performance underscores the company’s strength in curating attractive travel packages that resonate well with consumers.

Outbound Tour Transaction Volume Increase

The company achieved double-digit year-over-year growth in outbound tour transaction volume during the first quarter. This growth indicates a strong recovery in international travel demand, reflecting consumer confidence and interest in exploring destinations abroad.

Live Streaming Channel Growth

Tuniu’s live streaming channels continued to thrive, with both transactions and verification volume achieving double-digit year-over-year growth. This channel has become a vital part of Tuniu’s strategy to engage customers and drive sales through interactive and dynamic content.

Introduction of AI Technology

The launch of Tuniu’s self-developed travel AI agent, Xiao Niu, marks a significant technological advancement for the company. This AI assistant is designed to enhance user engagement and improve operational efficiency, positioning Tuniu at the forefront of innovation in the travel industry.

Expansion of Offline Stores

Tuniu’s expansion with nearly 300 new offline stores is a strategic move to bolster localized procurement and strengthen customer engagement. These stores are expected to enhance the company’s reach and provide personalized services to customers.

Decrease in Other Revenues

Despite the growth in other areas, Tuniu experienced a 26% year-over-year decline in other revenues, primarily due to decreased commission fees from other travel-related products. This decline highlights a challenge that the company needs to address to diversify its revenue streams.

Gross Profit Decline

The gross profit for the first quarter was RMB 69.3 million, representing a 15% decline year-over-year. This decrease in profitability is a concern that Tuniu will need to address to ensure long-term financial health.

Increase in Operating Expenses

Operating expenses rose by 15% year-over-year, driven by increases in research and development, sales and marketing, and general administrative expenses. This rise in costs indicates Tuniu’s investment in growth and innovation, although it also impacts the bottom line.

Net Loss Attributable to Shareholders

Tuniu reported a net loss attributable to ordinary shareholders of RMB 4.7 million in the first quarter. This loss underscores the financial challenges the company faces, despite the positive developments in certain segments.

Forward-Looking Guidance

Looking ahead, Tuniu expects second-quarter net revenues to be between RMB 131 million and RMB 136.8 million, representing a 12% to 17% year-over-year increase. This optimistic forecast reflects the company’s confidence in its strategic initiatives and market recovery. As of March 31, 2025, Tuniu held RMB 1.2 billion in cash and equivalents, providing a solid financial foundation for future growth.

In summary, Tuniu Corp’s earnings call highlighted a blend of growth and challenges. While the company is making strides with innovative technologies and strategic expansions, financial hurdles such as decreased other revenues and increased expenses remain. Investors will be keen to see how Tuniu navigates these dynamics in the coming quarters.