Tongcheng Travel: The OTA That Grew Up Outside China's Megacities

China's online travel market is usually discussed in terms of giants built around Beijing, Shanghai and other megacities. Tongcheng Travel / 同程旅行 built its business differently — betting specifically on users from small and mid-sized cities — and Q1 2026 results show that bet paying off in record numbers.

Betting on an audience beyond the megacities

As of March 31, 2026, more than 87% of Tongcheng Travel's registered users lived in non-first-tier cities — that is, outside Beijing, Shanghai, Guangzhou and Shenzhen. This is a deliberate positioning choice: instead of competing with larger players for the same megacity audience, the company built its product and marketing around residents of less-covered regions, where competition for customers is traditionally lower and loyalty to a convenient, familiar service tends to be higher.

Record Q1 results

For Q1 2026, the company's revenue reached RMB 5,005.8 million — up 14.4% year-on-year, with annual paying users hitting a record high of 254 million. The company attributes this growth to diversified traffic sources, product innovation, and a flexible operating strategy — the ability to quickly adapt offerings to demand in specific regions rather than working from a single nationwide template.

Hotel management as the main growth driver

According to the company's own figures, hotel management was the largest growth driver in Q1, while the vacation and travel-package segment declined roughly 5% — a signal that demand is shifting toward simpler, more predictable products (accommodation and transport booking) rather than complex travel packages. For Q2 2026, the company expected pressure on the transportation segment from higher airfares and reduced flight capacity, while accommodation and other services were expected to keep growing.

Why Tongcheng's model is instructive for the market

For companies assessing the potential of China's domestic tourism and ticketing markets, Tongcheng's case is a clear illustration that the growth of China's online travel market no longer comes down to first-tier city development: less obvious regional markets are generating a significant share of new paying users. This model, and the broader structure of China's ticketing and travel industry, can be explored on the China Ticketing & Travel Expedition.

What it means for the market

Tongcheng Travel's experience shows that focusing on undervalued geographic segments can be just as profitable a strategy as directly competing for megacity audiences — provided the product and logistics are built specifically around that audience's needs.

Why smaller cities aren't a "second tier" for travel businesses

Users from non-first-tier Chinese cities were long undervalued by platforms geared toward premium megacity audiences, on the assumption they had lower spending power and less willingness to pay for travel. In practice this audience drives a significant share of China's domestic travel demand: residents of small and mid-sized cities travel domestically more often, travel abroad less often, and are far more sensitive to interface convenience and payment simplicity than to a service's premium branding. A product that solves exactly those problems — rather than chasing premium-segment visual aesthetics — earns a loyal audience with a high rate of repeat use.

What's happening in the transportation segment

The expected pressure on the transportation segment in Q2 2026 from rising airfares and reduced flight capacity isn't a Tongcheng-specific problem — it's an industry-wide trend affecting China's entire flight-booking market. Companies whose revenue is more diversified across flights, hotels and other services weather such fluctuations more easily than players dependent mainly on ticket sales — which is exactly why growth in the hotel-management segment turned out to be such a significant resilience factor for Tongcheng.

Sources

Q1 2026 financial figures are drawn from the company's press release (PR Newswire, Vietnam Investment Review) and Quartr coverage.