The stock in Tuniu Corp. (Nasdaq: TOUR) slipped nearly 6% on Wednesday despite a recent survey showed 60% Chinese were planning a trip in 2020.
The Nanjing-based online leisure travel company said in a statement today that its revenue in the first quarter reached $24.6 million, down 62% from one year ago. Its net loss hit $29 million, 8 cents per share, in the three months through March, up 39% year-over-year.
Going forward, Tuniu significantly lowered its revenue guidance for the next quarter. The company said in the statement that it expected to earn 20.8 million yuan($3 million) to 72.8 million yuan($10.4 million) in revenue of the second quarter, down 86% to 96% from one year ago.
To compare, the company reported revenue of $75.8 million and a net loss of $24.3 million in the second quarter of 2019.
Tuniu attributed its revenue drop to the adverse impact on the travel demand due to the outbreak of COVID-19. The company has suspended to sell packaged tours and collected fewer service fees from insurance companies during the first quarter.
Still, the company owns $296.6 million cash and cash equivalents in the book to weather the storm of the COVID outbreak-related industry slowdown.
“Even though travel restrictions implemented during the COVID-19 pandemic remain in place, we are positive on the long-term prospect as there has been a strong accumulation of demand for travel products,” Dunde Yu, the chief executive officer of Tuniu, said in the statement.
Founded in 2006, the travel company offers organized and self-guided tours, as well as travel-related services for leisure travelers through its website tuniu.com and mobile platform.
The company announced a business shift in the domestic market, turning to high-quality domestic travel products to customers to meet the near-term challenges.
The Chinese outbound market has become the largest one in the world since 2013, according to Skift research. But the coronavirus outbreak
China is reported to lead the travel recovery as the recent survey in May showed 60% of Chinese intend to travel in 2020, with more than 45% wanting to have an outbound trip, according to Ivy Alliance Tourism Consulting-led joint survey.
Among all the dream destinations, Japan ranked top, followed by Thailand, Europe, the Maldives, and Singapore, according to the survey.
Shares in Tuniu closed at $1.08 per share on Wednesday, down 6%.