Q2 2026 Tongcheng Travel Holdings Ltd Earnings Call Transcript
Key Points
- Tongcheng Travel Holdings Ltd (STU:TEM) delivered solid financial results in Q2 2026, with total revenue up 6.8% year-over-year to RMB5.0 billion and adjusted net profit up 9.8% to RMB851 million, despite market headwinds.
- International accommodation business showed exceptional growth, with room nights sold increasing by more than 50% year-over-year, and international air ticketing revenue continued robust growth, contributing to a rising share of total transportation revenue.
- The hotel management business, including Elong Hotel Technology and Wanda Hotels and Resorts, is expanding rapidly, with over 3,500 hotels in operation and more than 2,000 in the pipeline, positioning it as a strong second growth engine.
- The company completed the acquisition of Dida Inc., a strategic move to enter the carpooling market, which is expected to create synergies and expand its mobility offerings.
- Tongcheng Travel Holdings Ltd (STU:TEM) is proactively integrating AI across its operations, including customer service and product recommendations, and has partnered with Weixin's AI assistant, positioning itself for long-term technological advantages.
- The company's focus on high-quality hotels is paying off, with the proportion of 3-star and above hotel room nights increasing by approximately 3 percentage points year-over-year, supporting ADR growth and outperforming the broader industry.
- The transportation ticketing business faced significant headwinds in Q2 2026, with revenue declining 2.3% year-over-year due to higher fuel surcharges and elevated airfares, which suppressed long-haul travel demand.
- The tourism business, particularly outbound package tours, experienced a 2.9% year-over-year revenue decline, pressured by rising fuel costs and geopolitical uncertainties.
- Summer travel demand in Q3 2026 is expected to be softer than anticipated, impacted by frequent extreme weather conditions, leading to a moderation in core OTA business growth.
- The company incurred one-off expenses of approximately RMB58 million due to organizational restructuring in Q2, which temporarily increased service development and administrative expense ratios.
- Fuel prices remain an area of uncertainty for the second half of 2026, and the company expects potential continued pressure on travel demand, especially for long-haul trips.
- The company faces potential regulatory adjustments in the OTA industry, and while no material impact has been observed, there is ongoing uncertainty regarding future compliance requirements.
Good day, and thank you for standing by. Welcome to Tongcheng Travel 2026 second-quarter and interim results announcement. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the call over to your first speaker today, Ms. Kylie Yeung, Investor Relations Director of the company. Please go ahead.
Thank you. Good morning, and good evening, everyone. Welcome to Tongcheng Travel's 2026 second- quarter results conference call. I'm Kylie Yeung, Investor Relations Director of the company. Joining us today on the conference call are our Co-Chairman of the Board, Executive Director and CEO, Mr. Hope Ma; our CFO, Mr. Julian Fan; our Chief Capital Officer and President of Wanda Hotels and Resorts, Ms. Joyce Li.
For today's call, our management team will provide a review of the company's performance in the second quarter. Hope will brief us on the company's strategy. Joyce will discuss our business and operational
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