TOUR Q2 2025: Packaged Tours Drive 26% Growth as Live Streaming Hits 20% of Volume
TOUR leveraged peak holiday demand and a robust supply chain to drive double-digit revenue growth, fueled by packaged tours and live streaming channel expansion. Strong outbound and domestic travel momentum, particularly in emerging markets and premium offerings, offset weakness in Southeast Asia. Strategic bets on live streaming and channel diversity are reshaping the company’s growth engine heading into peak season.
Summary
- Channel Diversification Accelerates: Live streaming and offline stores gained share, broadening TOUR’s customer reach.
- Packaged Tours Outperform: Premium and value lines delivered robust growth, especially in emerging outbound destinations.
- Margin Watch as Costs Rise: Operating expenses surged, highlighting the need for continued cost discipline as TOUR scales.
Business Overview
TOUR, also known as Tuniu, is a leading Chinese online travel agency specializing in packaged tours, outbound travel, and travel-related services. The company generates revenue primarily from the sale of packaged tours—bundled travel products including transportation, accommodation, and guided services—alongside ancillary offerings such as advertising and technical support for tourism boards. TOUR’s business is structured around domestic and outbound travel segments, with sales channeled through digital platforms, live streaming, and a growing offline store network.
Performance Analysis
TOUR delivered a 15% year-over-year increase in net revenues for Q2 2025, with packaged tours as the core driver, up 26% and now representing 84% of total revenue. This growth was underpinned by robust demand during three major holiday periods, with both transaction volume and number of trips rising. Notably, domestic tours accounted for about two-thirds of gross merchandise volume (GMV), while outbound tours made up the remaining third, with Europe, Japan, and the Maldives leading growth among international destinations.
Live streaming channels continued to scale, contributing nearly 20% of transaction volume, up from over 15% in the previous quarter. This channel proved especially effective for new select products, which target cost-conscious travelers, and for high-value destinations such as Dubai and the Caucasus. Gross profit grew modestly at 2% year-over-year, overshadowed by a 58% increase in operating expenses driven by investments in sales, marketing, and R&D personnel. Despite this cost pressure, TOUR achieved profitability on both GAAP and non-GAAP bases, supported by strong cash flow from operations and disciplined working capital management.
- Channel Mix Shift: Live streaming and offline stores now account for a larger share of sales, reducing reliance on traditional online channels.
- Destination Outperformance: Emerging outbound regions like South America and the Caucasus saw triple-digit growth, offsetting Southeast Asia declines.
- Cost Inflation: Operating expenses, especially in R&D and sales, outpaced gross profit growth, creating margin pressure despite revenue gains.
While packaged tour momentum remains robust, the company’s ability to leverage new sales channels and manage rising costs will be critical as it enters the summer peak season.
Executive Commentary
"Our diversified sales channels have enabled us to reach a broader customer base. We are seeing more and more of our sales coming from new channels like live streaming and offline stores. At the same time, we are closely monitoring the ROI of each channel and maintaining strict cost control over internal operations."
Donald Yu, Founder, Chairman, and CEO
"Revenues from package tours were up 26% year-over-year to $113.4 million and accounted for 84% of our total net revenues for the quarter. The increase was primarily due to the growth of off-night tours and self-drive tours."
Anqiang Chen, Financial Controller
Strategic Positioning
1. Live Streaming as a Growth Engine
TOUR’s pivot to live streaming is reshaping its sales funnel, with this channel now contributing nearly 20% of transaction volume. The company is leveraging influencer partnerships, on-location broadcasts, and immersive product presentations to drive engagement and conversion, especially for outbound and high-value products.
2. Product Line Diversification
New tour and new select, TOUR’s premium and value product lines, are capturing both high-end and price-sensitive travelers. The company’s ability to maintain high repurchase rates among premium customers and scale cost-effective offerings through live streaming underpins its multi-tiered approach to market segmentation.
3. Supply Chain and Procurement Leverage
Centralized procurement and resource integration allow TOUR to offer competitive pricing, expand departure city coverage, and secure airline discounts. Favorable payment terms and technical support for suppliers further strengthen its supply chain, enhancing product quality and vendor loyalty.
4. Offline Store Expansion
TOUR’s investment in offline stores, particularly in key departure cities and transportation hubs, is building local scale and lowering operating costs. This channel grew transaction volume over 20% year-over-year, demonstrating its value in reaching customers less accessible via digital channels.
5. Technology and AI Adoption
Ongoing investment in AI agents and internal digital tools is aimed at improving customer experience and operational efficiency. Early adoption and positive user feedback suggest TOUR is positioning itself for scalable service delivery as demand grows.
Key Considerations
TOUR’s Q2 results highlight a business in transition, balancing rapid channel innovation with the operational demands of peak season travel. The company’s ability to sustain growth while managing cost inflation and evolving consumer preferences remains central to its investment case.
Key Considerations:
- Holiday Demand Surge: Peak travel periods provided a tailwind, but sustainability post-season is a key watchpoint.
- Sales Channel ROI: Management is closely tracking the effectiveness and cost of each channel, especially as live streaming and offline stores scale.
- Emerging Market Momentum: Outbound travel to new and non-traditional destinations is outpacing legacy markets, diversifying revenue streams.
- Margin Management: Operating expense growth outstripped gross profit, highlighting the need for ongoing cost discipline as TOUR invests in growth.
Risks
Rising operating expenses, especially in sales, marketing, and R&D, threaten margin stability if not matched by incremental revenue gains. Geopolitical and regional demand volatility, as seen in the sharp decline in Southeast Asia travel, could persist or spread to other key destinations. Channel cannibalization and execution risk exist as TOUR aggressively expands new sales formats, which may dilute brand or margin if not managed carefully.
Forward Outlook
For Q3 2025, TOUR guided to:
- Net revenues of $199 million to $208.3 million
- Year-over-year growth of 7% to 12%
For full-year 2025, management maintained a cautiously optimistic outlook:
- Continued focus on profitability and channel efficiency
Management highlighted several factors that will shape results:
- Peak season demand and evolving customer booking patterns
- Further expansion of live streaming and offline channels
Takeaways
TOUR’s channel diversification and product innovation are driving growth, but margin headwinds from rising expenses require close monitoring. The company’s ability to sustain momentum as holiday seasonality fades and to balance investment with profitability will determine its trajectory in the coming quarters.
- Packaged Tour Strength: Outperformance in core packaged tours and new destinations offset regional weakness, validating TOUR’s multi-segment strategy.
- Cost Discipline Needed: Operating expense growth is outpacing revenue, requiring efficiency gains to protect margins as sales channels scale.
- Channel Innovation Watch: Investors should monitor the sustainability of live streaming and offline channel gains, as well as their impact on overall customer acquisition cost and brand equity.
Conclusion
TOUR’s Q2 2025 results underscore a business capitalizing on demand recovery and channel innovation, but now facing the challenge of scaling profitably. Execution on cost control and channel ROI will be critical as the company moves deeper into peak travel season and beyond.
Industry Read-Through
TOUR’s success with live streaming and influencer-driven travel sales signals a broader shift in travel sector distribution, with digital engagement and immersive product demonstrations gaining traction. The rapid rise of outbound demand to emerging destinations suggests a diversification trend that could benefit suppliers and operators able to adapt quickly. However, cost inflation and destination-specific volatility remain sector-wide risks, with margin management and channel effectiveness now central to competitive advantage for travel agencies and platforms across Asia.