Hello. And thank you for standing by for Tuniu's 2021 Fourth Quarter and Full-Year Earnings Conference Call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference call, Director of Investor Relations, Mary.

Thank you. And welcome to our 2021 fourth quarter and full-year earnings conference call. Joining me on the call today are Donald Yu, Tuniu's Founder, Chairman and Chief Executive Officer, and Anqiang Chen, Tuniu's Financial Controller. For today's agenda, management will discuss business updates, operational highlights and financial performance for the fourth quarter and fiscal year 2021. Before we continue, I refer you to our Safe Harbor statement in 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 know that, unless otherwise stated, all figures mentioned during this conference call are in RMB. I would now like to turn the call over to our Founder, Chairman and Chief Executive Officer, Donald Yu.

Thank you, Mary. Good day, everyone. Welcome to our fourth quarter and full-year 2021 earnings conference call. 2021 was the year for challenges and opportunities, while Tuniu new experienced rapid business rebound since COVID-19 was brought under control in China. We've also been tested by its repeated recurrences. In 2021, our revenues from packaged tours for the full year of 2021 maintained the same level as in 2021. Despite adverse external environment with transaction volume of our self-operated local tour operators achieving double-digit growth. Our operating expenses have decreased year-on-year for four consecutive quarters and the net loss for the year has also narrowed significantly compared with last year. COVID-19 has [indiscernible] the abilities of tourism enterprises to manage risks on a sustained basis. It has required enterprises to continue to innovate, meet key customer demands and upgrade products and services. It also required a highly efficient internal management systems to adapt to the changing business environment, using limited resources. Tuniu's development path has been differentiated by our focus on the creation of a vertically integrated supply chain, allowing us to become the industry's sole integrated digital tourism service provider. By bringing together production, supply and the sales and building our capabilities in direct procurement, as well as product design and packaging, self-operated local tour operators and multiple sales channels, Tuniu has realized significant advantages compared to our peers. Recognizing the market changes and upgraded customer expectations in the post COVID-19 era, Tuniu has focused on new directions for product development that leverage our advantages. In addition, we have upgraded our digitalization capabilities across the entire industry chain to improve our operational efficiency and customer experience. Our integration has shortened the industrial chain and improved the gross profit, while digitalization has improved efficiency and reduced the costs. With the synergies…

Thank you, Donald. Hello, everyone. Now I walk you through our fourth quarter and the fiscal year 2021 financial results in greater detail. Please note that all the monetary amounts are in RMB unless otherwise stated. You can find the US dollar equivalents of the numbers in our earnings release. Starting from the fourth quarter of 2021. Net revenues were RMB 73.4 million in the fourth quarter of 2021, representing a year-over-year decrease of 38% from the corresponding period in 2020. The decrease was primarily due to the negative impact brought by the outbreak and spread of COVID-19. Revenues from packaged tours were down 49% year-over-year to RMB 42.8 million and accounted for 58% of our total net revenues for the quarter. The decrease was primarily due to the resurgence of COVID-19 in certain regions in China. Other revenues were down 14% year-over-year to RMB 30.6 million and accounted for 42% of our total net revenues. The decrease was primarily due to the decline in commissions received from other travel-related products impacted by the resurgence of COVID-19. Gross margin was 47% in the fourth quarter of 2021 compared to a gross margin of 40% in the fourth quarter of 2020. Operating expenses for the fourth quarter of 2021 were RMB 78 million, down 92% year-over-year. Excluding share-based compensation expenses, amortization of acquired intangible assets and the impairment of acquired intangible assets, non-GAAP operating expenses RMB 74.8 million, representing a year-over-year decrease of 22%. Research and product development expenses for the fourth quarter of 2021 were RMB 13.5 million, up 5% year-over-year. The increase was primarily due to the increase in research and product development personnel-related expenses. Sales and marketing expenses for the fourth quarter of 2021 were RMB 28.6 million, down 75% year-over-year. The decrease was primarily due to the…

[Operator Instructions]. We will take our first question today from Grace Lu [ph], a private investor.

My name is Grace Lu. I have several questions for you. Firstly, what's your view on the recovery of the travel industry in 2022 compared with the previous year? And based on your perspective, could you please share the company's strategies and priorities for this year and any guidance on the financial components of 2022?

The travel market experienced both rebound and recurrences last year. In general, our packages tour revenues kept in line with 2020. On a quarterly basis, the second quarter was the best, which contributed over 40% of the annual packages tour revenues. As the pandemic was under control, the pent up demand was released. So, in the second quarter, our packages tour revenues increased more than 9 times year-over-year. The rest of the three quarters were disrupted by reemergence of COVID-19. Travel restrictions impacted regions, restricting demand for travel products, which adversely affected our revenues. Coming to 2022, the continuous resurgence of the epidemic since the beginning of the year has limited the recovery of the travel industry. Therefore, our net revenues for the first quarter will have a negative growth. However, based on past experience, the recovery of travel largely depends on the control of the pandemic. The ongoing vaccine rollouts and enhancement of treatment methods will pay more effective ROI in pandemic control this year. Amid such a dynamic external environment, we will continue to insist on product innovation and service improvement this year. And our integration model, we are producing more products of our own, such as new tour and hotel plus X products. Also, we'll increase the use of our [indiscernible] local tour operators in our own products. We have also developed more travel themes, such as spring outings, wellness tour and night tour to attract various customers. In terms of services, we have enhanced the user experience through our digitalization strategy. We will use technical means to facilitate the whole process from booking, traveling to returning to follow the new consuming and entertainment habits of the mass market. We have also encouraged live streaming shows and the sort of videos as one of our marketing methods. In terms of financials, it's hard to give specific top line guidance due to the changing external environment at present. However, the adoption of integration and digitalization [indiscernible] will help us improve the profit margin and better control the costs. We will continue to execute the strict cost control measures as we did last year. If the market turns better, we'll be on the right track to deliver better results.

[Operator Instructions]. We are now approaching the end of the conference call. I would now hand the call over to Tuniu's Director of Investor Relations, Mary, for closing remarks.

Thank you. Once again, thank you for joining us today. Please don't hesitate to contact us if you have any further questions. Thank you for your continued support and we look forward to speaking with you in the coming months.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.