Tuniu Corporation

And welcome to our 2021 Third Quarter Earnings Conference Call. Joining me on the call today are Donald Yu, CUNY's founder, chairman, and chief executive officer, and Anqiang Chen, CUNY's financial controller. For today's agenda, management will discuss business updates, operation highlights, and financial performance for the third quarter of 2021. Before we continue, I refer you to our safe harbor statement in the earnings press release which applies to this call, as we will make forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to most directly comparable GAAP measures. Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in R&B. I would now like to turn the call over to our founder, chairman, and chief executive officer, Donald Wu.

Thank you, Mary.

Good day, everyone. Welcome to our third quarter 2021 earnings conference call. While the recovery of the overall tourism industry experienced a step back in the third quarter due to the resurgence of COVID-19 and natural disasters, our revenues from packaged tools continued to increase. Following the pandemic resurgence in August, Tunisia's total travel GMV resumed growth during September and October. Operating expenses decreased year-on-year for the third consecutive quarter. and our net loss continues to narrow compared to the same period last year. During the pandemic era, 2NEW has steadily, fastly adhered to our customer-first principle, providing safe and comfortable travel experiences, as well as refund and exchange guarantees. Our refund and exchange request rate reached the highest level of the year following the COVID-19 resurgence in July. From July 20 to August 20, 2NEW refunded over 85,000 orders and the total refunds for packaged tours was over RMB 120 million. In addition, 2NEW extended refund and exchange guarantees for mid- and high-risk areas and absorbed some of the losses for customers who had to cancel trips due to pandemic control measures. Since the outbreak of COVID-19 in 2020, we have provided coverage on the losses of our customers, totaling over 100 million. Thanks to our timely and effective services, We have been rewarded with the long-term support and trust of our many loyal customers. In fact, the contribution of repeat customers to our transaction volume has been stable at more than 75% every quarter since 2020. In October, our member state single-day sales exceeded RMB 10 million, with the Transaction volume of package tool products increase in 30% quarter on quarter. And the high quality and trustworthy corporate image we've established has played a large role in attracting new customers. While ensuring that we maintain the highest standard of service quality, we will continue to focus our energies on product development We consistently worked to upgrade our products based on customers' involving demands, amidst the change towards smaller, premium package tours. Travelers have increasingly diversified demands for tour themes such as adventures, photography, and health-related services, alongside the traditional visits to scenic spots. and their standards in terms of facilities and service is growing as well. During the National Day holiday this year, more than half of our total organized tours were groups of six or less, according to new tours booking data. Two new years of experience in the industry have allowed us to build a mature product and service network covering points of departure. But the development of destination-based products and services still has enormous room to develop. The design and development of 2NEWS package tool products has always revolved around the destination. Our new tool product designers all have more than five years of experience in destination design. and we have dedicated staff responsible for resource procurement at destinations. Since the COVID-19 outbreak, we have further promoted innovation within existing destination roles and the development of new destinations. By deeply leveraging our resources in the domestic travel market, we have launched multiple diversified products such as countryside tours, glamping and urban light tours in addition to our mainstream products to provide more options for customers. In the post-COVID-19 era, self-guided tour has become increasingly popular. To address this, our HotelPlusX product model focuses on destination hotels with special emphasis on location hotels. Our HotelPlusX product model offers many options to meet diverse customer demands, such as scenic spot tickets for the mass market, helicopter tours for the premium market, and family-friendly entertainment activities. The HotelPlusX product model still has room for development, and with our direct procurement advantages, we will continue to access deeper levels of destination-based resources to provide travelers with more product choices and greater value for money. In terms of marketing, our approach combines popular online formats, including short videos to better capture the attention of customers and live streaming shows to introduce destinations, helping to encourage interested users to place orders. These promotions are highly popular with current customers, especially the younger generation. We have developed several long-term and in-depth live streaming shows for popular destinations, some of which have achieved strong results, and we look forward to developing this channel further.