Here are the latest announcements and press releases from ChinaContact
The China Outbound Travel Education Series – part 2 (The Industry)
June 29th, 2009
The travel industry in China is complex and vague for two main reasons. First, the industry has only recently been confronted with new free market mechanism where consumers are free to choose their travel destinations. Second, despite this, the industry is still largely controlled and directed by the government. So what effect these two seemingly conflicting factors have?
This situation is comparable to other sectors in the Chinese economy which are in a transitionary phase from centrally controlled policies to free market mechanisms. The market mechanism is clear to Western players in travel and tourism: the consumers’ demands must be met by suppliers with a premium on value added. But the overwhelming role of Chinese governmental institutions is often misunderstood by Western businesses.
In the Chinese travel industry, the national, provincial and city governments influence greatly the development of the market. We expect this influence to gradually decrease over the coming years, in light of WTO regulations and increased openness to the west. As it stands, only a limited number of licenses are issued to Chinese travel agents allowed to operate international travel. There is no distinction between retail and wholesale business. Foreign tour operators are not allowed to conduct outbound travel in China in any legal form though there are signs that this situation may change in the future.
The limited number of Chinese travel agents engaged in outbound travel clearly cannot meet the growing demand for travel abroad. This has resulted in an extensive grey network of travel agents operating without a license. The big disadvantage of this grey network is that they are not legally liable, are not allowed to deal with foreign exchange or handle visa applications. But this unofficial sub-sector has been the most active, succeeding in gaining a sizeable market share by focusing on business travel or using ‘franchised’ licenses.
Some key points to consider:
? Only one third of the travel business is actually operated by official travel agencies, the rest passes through other organisations such as government bureaus, trade promotion bodies, consultants, private networks and contacts abroad.
? Gaining access to the Chinese market and developing a successful strategy requires first a good understanding of the complicated situation.
? Freelance agents often ‘rent’ or ‘franchise’ an outbound travel license number from an established agency to sell and operate their own independent groups and individual travel business.
The China Outbound Travel Handbook 2008 in blog post sized chunks for easy reading. The posts are abridged versions of the book to give a general overview of China’s tourism industry, the marketing and sales approaches that work, case studies from different destinations, tips on hospitality and more. At any point you can go to our website to read the full version or join the ChinaContact Tourism Network and download the PDF version for free. A license to print the handbook can be purchased from our website as well.
Next week: part 3 – Approved Destination Status (ADS) policy
The China Outbound Travel education series – part 01
June 25th, 2009
In the coming weeks we will be releasing chapters of the China Outbound Travel Handbook 2008 in blog post sized chunks for easy reading. The posts are abridged versions of the book to give a general overview of China’s tourism industry, the marketing and sales approaches that work, case studies from different destinations, tips on hospitality and more.
At any point you can go to our website to read the full version or join the ChinaContact Tourism Network and download the PDF version for free. A license to print the handbook can be purchased from our website as well.
Part 01: Introduction to the China Outbound Travel Handbook
This China Outbound Travel Handbook was first published in 2005 and comprehensively updated in 2008. It was written from two distinct business views – Chinese local expertise and Western experience of doing business in China. It provides practical information you can use as well as insight into the challenges of dealing with China’s tourism industry and how to prepare for them.
The co-author Roy Graff served as E-commerce director for Gullivers Travel Associates and Country Manager of Octopusavel.com in China from 2002 to 2005. His company provides full service representation to tourism destinations, hospitality and travel companies as well as bespoke services covering consulting, strategy, business development, training and product localization. Roy also maintains the ChinaContact Tourism Network which helps travel professionals worldwide to network and interact online about China’s tourism industry.
The China Outbound Travel Handbook will give you the basic understanding and insight to begin operating in this challenging, complicated but potentially hugely profitable market place. You will learn who is travelling abroad, what are the best ways of reaching them, how the travel industry is organised in China and how to show your hospitality to Chinese visitors abroad. This handbook is the travel industry professional’s definitive and user friendly tool for effective promotion and marketing in China. It will facilitate the establishment of profitable relationships with the right counterparts in China and improve your ability to welcome the Chinese traveller successfully.
After twenty years of successful reforms, China has become an active player in the international tourism industry. Travelling abroad is now a regular part of the lives of many people in China, for both business and leisure.
Doing business in China and with China, has been the subject of countless books and training courses for more than a decade. These books and manuals have dealt with general business practices that can be applied to as many industries and sectors as possible. While they are useful for background knowledge and some insight into China’s business culture, ultimately they cannot answer specific questions about China’s tourism industry. Tourism is one of the youngest industries in China, with outbound tourism literally the ‘baby’, still learning to define itself and realise its potential. The industry suffers from lack of regulatory enforcement and a ruling body several steps behind the private sector.
There are between 200 and 250 million Chinese today that are financially able to travel overseas . 2007 outbound numbers reached nearly 41 million, an increase of 18.6% over 2006. WTO estimates a minimum annual growth of 12.8%, reaching 100 million by 2020. There are over 700 licensed outbound travel agencies in China. The number of countries given ADS (Approved Destination Status) is more than 135 and still increases. It is an exciting time to be working in tourism, with China representing the single greatest growth opportunity in the world to western travel destinations and tourism companies.
Next week: Part 2 – the China travel industry
Conversation with Sam Flemming: Online social networks in… – Eventbrite
June 11th, 2009
ChinaContact Invites you to:
Discussing China online social media
17 June 2009, Wednesday, 4 – 6 PM
Find out how China’s SNS scene is shaping out and how different it is in terms of revenue models and usage compared to Western SNS. Learn how brands monitor and manage their online reputation through social media and how China’s youth market can be engaged and influenced.
Sam Flemming (profile below) will be offering his insights and discussing China’s online social media sector during this free afternoon meetup.
For more information and booking, visit Conversation with Sam Flemming: Online social networks in China.
China Travel Innovation Summit report: Social media and the travel industry
June 2nd, 2009
Travel Industry and the Social Media Puzzle
China TravelDaily Exclusive by Maggie Rauch (republished by ChinaContact in partnership with China TravelDaily)
June 3, 2009: With China’s leisure travel market growing at the same time as its online usership grows, it’s no surprise that a number of players are looking to capture the attention of travel consumers through social media.
The social media tools that are gaining steam–social networking sites, bulletin board systems, microblogging–may be a relatively recent phenomenon, but their function for marketers is based on a tried and true principle, says Mark Inkster, chairman of Yiqilai.com.cn. “You might not believe what you read online, but if it comes from your friends you will trust it.”
From travel booking sites like eLong and Ctrip to airlines and hotel review sites, China’s travel industry players are experimenting with using social media to attract and engage travelers. But the best ways to leverage that are still unclear, and social media strategy–particularly involving online social networking–was a major topic of discussion and debate at the recent China Travel Innovation Summit in Beijing.
“The barriers are quite high for creating a standalone social network,” says William Bao Bean, partner, Softbank China and India Holdings, who moderated a panel on social media at the Beijing summit. “Everybody belongs to two or three and doesn’t want to add another.”
Lufthansa Airlines learned that lesson when it experimented with creating its own social network for the U.S. market, Genflylounge.com, which failed to generate the interest that Lufthansa had hoped for. Its social media tactics in China are now anchored by a partnership with Xiaonei.com, the so-called “Facebook of China.” Lufthansa uses its presence at Lufthansa.xiaonei.com to interact with young consumers at the same place where they interact with each other.
“We felt that we would rather hook up with an existing social network provider,” says Martina Groenegres, Lufthansa’s chief China representative. “We chose Xiaonei because it is the biggest network for students, with 22 million active users. They’re generally well-educated, between the age of 18 and 25 and come from more than 3,000 universities.” Lufthansa’s 1,000-plus “friends” on Xiaonei share travel tips and have access to special deals and contests.
Jason Xie, eLong’s vice president of web and business development, is not so positive on the use of online social networking for travel industry players. Says Xie: “It’s hard to have success with SNS in tourism because: One, the stickiness is not enough–people travel maybe twice a year for tourism; two, travel itself doesn’t generate sufficient content; and three, travel information is destination-based, so I think that SNS is in conflict with travel information. I don’t care about the ten places my friend has been.”
Mark Inkster, chairman of Yiqilai, a travel review site that relies heavily on user-generated content, directly disagreed with Xie. “Because you only travel two or three times a year, you want to come back [to social media] and have fun,” he said. “Dream, plan, book, travel, share–these don’t happen in sequence. We are looking to engage people as they move among these phases of the travel experience.”
Despite his aversion to social networking, Xie said that eLong is working on an initiative with Xiaonei, though he would not elaborate on it. The only program he discussed was eLong’s Yiqifei (”Fly Together”) program, which allows travelers to connect online with people who will be on their flight. Ctrip tried and scrapped a similar program in the past, as have several companies like the now-defunct Intown2.com, but Xie seemed confident that Yiqifei would appeal to eLong’s customers.
Inkster, though bullish on the role that social media can play in travel, acknowledges that Yiqilai is still working out its strategy. Echoing Bean, he says, “People are parts of other networks. I’m not too confident in travel social networks, so we’re building a presence on other networks.” Yiqilai allows users on its own site to contribute content through wikis, BBSes and interactive games. Its “Where I’ve Been” map app, which lets users place virtual pins on cities they’ve visited, is available on four different social networking sites including Facebook and Xiaonei, and is a top-rated app on 51.com, Inkster says.
China presents an interesting set of challenges and opportunities to travel providers when it comes to social media. Its rapidly emerging leisure travel segment does relatively little online booking, but is otherwise very active online.
“Online social engagement is higher in China than in the United States and Europe,” says Jens Thraenhart, president of brand strategy firm Chameleon Strategies. Forty percent of China’s online users can be categorized as “creators” Thraenhart says, compared to 14 percent in the United States. Thraenhart considers 44 percent of China’s online population to be critics or commentators, compared to 16 percent of the United States’ Internet users.
Of course, spinning that engagement into air ticket purchases and hotel bookings is not an easy thing. Questions of measuring return on investment for social media projects were raised throughout the Beijing travel summit, and there were no easy answers.
Groenegres says Lufthansa is still waiting to see if its latest experiment pays off: “Will people actually exchange a lot of information and then finally buy something? Do they link with our own site, Lufthansa.com, and book something?”
Roy Graff’s presentation on China online travel marketing and distribution at Travel Distribution Summit Europe is available for online viewing
May 25th, 2009
TDSEurope2009 Workshop ChinaContact
View more Microsoft Word documents from Roy Graff.
The Question and Answer session that follows can be downloaded as an MP3 file or listened to from the ChinaContact Tourism Network.
Press Release: Industry Leaders Gather at TravelDaily China Travel Innovation Summit
May 21st, 2009
Industry Leaders Gather at TravelDaily China Travel Innovation Summit
China’s top travel professionals gathered in Beijing last week to identify opportunities and discuss trends in the country’s travel market, which remains the world’s most rapidly emerging even as the world economy faces huge challenges.
TravelDaily (www.traveldaily.cn), China’s leading online publisher and event organizer with emphasis on trends in the distribution, marketing and technology of the travel and tourism industries, hosted the 2009 China Travel Innovation Summit from May 12 to 13, 2009, at Beijing’s New Otani Chang Fu Gong. Featured speakers were some of the most powerful companies and brightest minds in the Chinese travel industry, hailing from companies like Amadeus, PayPal, Travelzoo, UATP, AMEX, Google, Baidu, Ctrip, eLong, Qunar.com, Yiqilai.com, Lufthansa Airlines, DerbySoft, CHINAonline and Oyesgo.
The two-day conference had more than 280 registered attendees, decision-makers representing various sectors of the travel industry, from airlines to online travel booking to hotel and car rental businesses. The conference kicked off with a presentation of PhoCusWright Asia Pacific’s recent report “Corporate Travel Management and Travel Practices in China,” and concluded with a “Start-up Challenge,” in which five entrepreneurs pitched their travel-related business before a panel of experts. Nile Guide (http://www.nileguide.com/), a personalized trip planner and travel itinerary site, beat four other start-ups–YourTo, Feeyo.com, HiCafe and Lostrip – garnering the most SMS votes during the Startup Challenge Pitch and winning the TravelDaily Innovator Award.
Other topics covered in the summit’s 14 sessions were: social networking sites, online video, user-generated content, meta and semantic search, online travel management, hotel distribution and investment.
“I am so pleased to see Chinese travel companies looking for innovative ways to serve their customers,” said Eva He, marketing director of TravelDaily. “The start-up challenge was really an exciting session and we were so proud to have the most innovative entrepreneurs showcase their solutions to the industry at our show. I believe they will have a significant impact on the competition landscape of China’s travel industry.”
TravelDaily’s next conference will be the China Travel Distribution Summit in November of 2009 at the Shenzhen OCT International Hotel. Registration for the event will begin in July.
About TravelDaily
TravelDaily(www.traveldaily.cn) is China’s leading online publisher and event organizer focusing on distribution, marketing and technology developments in the travel and tourism industries.
With our China focus, our up-to-minute news and feature stories combined with in-depth analysis by leading industry experts will keep you up-to-date with the latest trends in the industry.
For more information, contact:
Ms. Ivanka Ge
Tel: 86 20 8760 5706
Fax: 86 20 3761 5190
Email: ivanka@traveldaily.cn
About ChinaContact
ChinaContact is media marketing partner of the Travel Innovation Summit and a leading China market entry specialist for tourism and hospitality organisations.
To inquire about participation in future events or China market access, email info@chinacontact.org
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