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Analysis: Three Principles for Survival in the New Chinese Travel Industry

Updated: Apr 5

An update on China's recovering travel industry.

News: Fiji Tourism Bureau Launches New Spring Marketing Campaign

The recent China Outbound Tourism Development Report (2023-2024) by the China Tourism Academy revealed that outbound tourists from China surpassed 87 million in 2023, with expectations to reach 130 million in 2024. Visa-free policies and increased international flights have spurred travelers' interest. Now, post-Spring Festival, prices for flights and accommodations have dropped, making it an ideal time for off-peak travel. Fiji Tourism Bureau has capitalised off this trend, initiating a marketing campaign targeting Chinese tourists for spring, promoting the theme "Off-Peak Visa-Free Travel to Fiji, Enjoy Unbelievable Value for Money." Collaborating with Fiji Airways and 20 resorts, special packages offer affordable options for Chinese travelers, aiming to fulfill their desire for luxury island experiences at reasonable prices. Vincent Zheng, Global Director of Fiji Tourism Bureau Asia-Pacific and Chinese Market, aims to diversify Fiji's tourism offerings and provide high-value vacation packages, sharing Fiji's unique allure with Chinese tourists.

MSC Restarts China Cruises

On March 15th, MSC Mediterranean Shipping Company Cruise Line, the world's largest family cruise line, welcomed its "Asian flagship" MSC Bellissima to Shanghai's Wusongkou International Cruise Terminal for the first time and held a grand inaugural celebration, ushering in the maiden voyage of the mainland China homeport scheduled to officially begin on March 16. By pioneering international cruise routes departing from Shanghai to neighboring countries, MSC Mediterranean Shipping Company will become the first international cruise brand to set sail from a mainland China homeport post-pandemic, offering Chinese guests 25 popular itineraries covering the spring and summer tourism peak seasons, departing from Shanghai and Shenzhen.

Australia's Queensland Restarts China Engagement

The Queensland Tourism and Events Promotion Board has just kicked off the "Queensland Is Calling" Greater China Conference in Shanghai, marking its first industry event in China since 2019. Led by Ms. Katie Mills, 24 Queensland tourism companies showcased new offerings to nearly 300 industry professionals from mainland China, Hong Kong, and Taiwan. Queensland aims to reignite tourism interest and attract Chinese visitors through face-to-face negotiations and industry training. The event highlights new developments, including attractions like Dreamworld and Sea World, and introduces first-time participants such as the Gold Coast Marathon and Crystalbrook Collection Hotels. Queensland, a favored destination among Chinese tourists, anticipates a resurgence in Chinese tourism, with projections of tourist spending exceeding $2.9 billion by 2032. The conference aims to strengthen ties with major tourism partners and media guests, fostering growth in Queensland's tourism sector. Ms. Patricia O'Callaghan, CEO of the Queensland Tourism and Events Promotion Board, emphasised the goal of doubling international tourism revenue by 2032.

Analysis: three main trends driving Chinese travel in 2024

Anxiety over growth is increasing for many travel enterprises as internet platforms inject more competition into the market. Concepts such as "private domain traffic" and "livestreaming sales" are emerging, and the majority of revenues are going to a small minority of companies with large follower bases. Facing the ever-present unknown challenges of 2024, operators in the travel industry must not only have the ability to move forward at full speed, but must also avoid potential dangers while achieving sustainable growth. China Travel Trade Media has outlined three key trends in the Chinese travel market by which to understand 2024's new developments:

  1. Fragmented consumption accelerates

In today's AI- and internet-driven market, everything is individualized, and every user is a media outlet. The way information is disseminated has become more fragmented, with attention being distributed irregularly. In October 2023, Jiang Hao, CEO of Ctrip's Tourism Business Group, publicly expressed a new viewpoint: fragmented tourism business has become a new growth driver for Ctrip after the pandemic. "Compared with 2019, the revenue generated by fragmented tourism businesses has increased from 40% to 70% of the total revenue of Ctrip's Tourism Business Group."

Ctrip data also shows that travelers enjoy spontaneous travel. The volume of hotel bookings made for the next day has increased by 71% compared to 2019. Data has also shown that it will soon become a common practice for Gen Z travelers to book tourism products after arriving at their destinations, based on factors such as weather and mood. Companies like Klook offer local experiences, most of which allow free changes or cancellations up to 24 hours or even a few hours before departure, winning over many younger consumers. It's not hard to see the uptake of the on-demand model in the market, including Chinese education giant New Oriental's 200 million yuan investment into car rentals.

Today, flexible micro-destinations, such as a cuisine or an event, make various experiences a potential fragmented tourism resource. With the help of a fragmented media ecosystem, even subculture and niche preferences may suddenly become mainstream. Destinations need to be ready to respond with fragmented entertainment experience products, while integrating services and personalised interactions.

2. Integration of wholesalers and stores

With the rise of consumer awareness via digital media, consumption demands are becoming more diversified, personalised, high-quality, differentiated, and refined. On the one hand, the resulting abundance of products increases the difficulty for customers to choose, and on the other hand, it results in a large number of ineffective products piling up. It is also impossible for store salespeople to introduce all the tens of thousands of products to customers in detail.

In this market, it becomes essential to take feedback around diverse consumer demands to wholesalers quickly. This not only helps upstream wholesalers to update effective new products quickly, but also innovates and optimises the structure of stores themselves. It helps stores and tour groups to gradually transition from homogeneous tangible products to customised products and additional services.

3. Adopting a growth mindset

Travel companies need to be where the traffic is, and more and more travel companies are investing into the digital media arena. The vast consumer markets of the Internet era have become the main battlefield for acquiring customers. Zhu Zhanzhao, Vice President of Tuniu Travel Network, highlighted a difficulty with traditional OTAs and other older e-commerce businesses: products are sorted according to sales and reviews, making it to difficult to position emerging hot products for sales. However, the algorithms of new digital platforms bring opportunities in demand and supply matching, which traditional e-commerce cannot do. This means that travel businesses need to consistently think of ways to attract customers' attention via platforms like Xiaohongshu and Douyin.

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