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Snap Talks at WiT Indie Penang, Part One: Of Chinese travellers and tours & activities – Web In Travel

Snap Talks at WiT Indie Penang, Part One: Of Chinese travellers and tours & activities
20/03/2019, by , in Distribution, Featured, Marketing, Meetings, Regions, Sectors

At last week’s WiT Indie 2019 held at the Penang Institute in Penang we invited a team of travel experts to give short presentations to spark new ideas and new learnings. In this first part, BrandStory Asia and Rezgo talk China and travel activities.

Marketing to the Chinese traveller: Reene Ho Phang, BrandStory Asia

“There are big changes in the China travel market, which also means big opportunities for marketers,” was how Reene Ho-Phang, founder & managing director of BrandStory Asia, described what lies in store for companies looking to do business with this outbound travel giant.

Reene Phang-Ho: Big changes in China market means big opportunities for marketers.

BrandStory Asia, a destination marketer in China, was established in 2003 to engage with the travel industry to stimulate the desire for and drive travel by Chinese consumers.

“My work is about creating love for destinations like Hawaii and Jerusalem, and this love will lead to lots of money from my clients,” she added, with reference the conference’s theme, “Love & Money”.

Describing China as the “world’s largest source market for travel” that is (still) growing and evolving Ho-Phang pointed the three key points for marketers to note in the evolution of the China market are the digitisation of the country, geographical expansion and changing habits.

Evolution of China market

  • Social media: Dominates Chinese life at home and while travelling. Consumers use mobile devices to do everything –  from watching movies to purchasing travel and socialising.
  • Digital payment: “We don’t carry wallets or credit cards anymore as we pay for everything with the mobile phone (Alipay/WeChat payment). Even buying fried dough for breakfast from a street hawker is with mobile by scanning a QR code,” said Ho-Phang.
  • Rise of Tier 2 markets: In these cities such as Chengdu, Chongqing and Ningbo, now coined as the “‘new Tier 1 cities”, there is an explosion in outbound travel as people have more purchasing power, are changing their lifestyle and now want to travel. Airlines are flying in to meet demand – all leading to double digit growth for these metropolis.
  • Mega shift to FIT travel: Major Chinese OTAs are reporting an increase of 60% in this segment versus groups.
  • Luxury travel boom:  Residents of Tier 1 cities — Beijing, Shanghai, Guangzhou, Shenzhen — are growing wealthier and more sophisticated, sparking a rise in luxury travel.
  • Family travel: Groups are still travelling but no more are they followers of flag-carrying tour guides. Instead the groups are now smaller with multi-generation families travel becoming popular, and they account for 30% of Chinese outbound tourists (30 million). These travellers  want experiences and are willing to pay more for hotels.

Islands, 1st choice destination

BrandStory’s interactive campaign on Hawaii reveals islands as 1st choice destination for Chinese travellers.

Ho-Phang said BrandStory’s interactive WeChat campaign on the mobile phone  – Hawai’i 6 Island Adventure – revealed that 46% of traveller ranked island holiday as their first choice destination. The campaign is popular as it not only showcases the products but educate Chinese consumers about Hawaii , that it is not just one island but six. Travellers  can follow the campaign on the microblogging website Weibo. Ctrip, she added, reported 20% increase in bookings with campaign.

Another segment with great potential is YOLO (You Only Live Once) – adventure seeking Chinese travellers who numbered about accounted for . 190 million adventure seekers spending US$30 billion.

Current data shows a 12% increase in spending from Chinese outbound tourists, and China is the #1 market in terms of top spenders.

Download Reene Ho-Phang presentation (PDF).

How to get your experience business discovered: Stephen Joyce, CEO, Rezgo

Travel activities account for 9% of global travel market and is the third largest segment of  the travel space after airlines and hotels. This is a really significant space worth about US$129 billion (RM500 billion).

Stephen Joyce: Travel activities is third largest segment of the travel space after airlines and hotels.

Nearer home, Asia Pacific is the largest regional market for tours and activities with 30% of the share –  a huge market, just as big as Europe and North America  – so it’s not insignificant.

It is thus not surprising that many companies are venturing into this sector. While the big boys have the resources and manpower to market their products and services globally, the smaller players may have difficulty in doing so. How then can an experience business get itself discovered?

On hand to share some techniques with operators/owners of tours & activities at WiT Indie on how to do this was Stephen Joyce, CEO of Rezgo, the tour operator software that allows tourism agencies to integrate a real-time online booking system into their websites.

Touching on conference’s theme (Love & Money), he stated that while tour & activities is a big industry it is made up of small businesses and people carry out these activities “out of love and not necessary doing it for the money,” and are passionate about it.

Elaborating he gave a global snapshot of these business:

  • 64% generate on average less than US$250,000 per year for their business (global statistics); in Asia this may be significantly less in some markets.
  • 61% have less that 5,000 customers per year, so not huge volume of customers as they serve fairly small markets.
  • 53% have 5 or less employees; many of these companies are single owner or operator or single owner.
  • About half( 56% ) are industry ready and are able to distribute through third party like OTAs with support from technology they are using. The percentage is much lower in Asia as most of the business is done offline with many still using paper and pencil, phones calls and dealing with local resellers – in markets like Thailand, for example, all tour and activities are bought off one or two offline resellers.

On ways to get discovered Joyce listed these steps:

Know your customer

“So the first thing you have to do is before you get discovered is you need  to know who your customer is and who you want your customer to be. Is your customer local, or are they  international or domestic travellers?”

Joyce explained that in South-east Asia a domestic traveller is one who  travels between countries within the region like from Thailand to Malaysia or from Singapore to Cambodia, different  from the same traveller in the US where there is such a huge geographic space that domestic travel  is within the borders.

Get to know your customers – who they are and what they want.
(Image credit: Soft_Light Getty Images)

The choice of payments for customers is also vital. International travellers from outside South-east Asia, like Australia, Europe or the US, prefer to pay with credit cards vs cash or local payments. Chinese tourists will want to pay with Alipay or WeChat Pay.

Other factors to consider are how likely customers book in advance, are they mobile-centre. Also consider their demograhics – are they older or younger customers, millennials or baby boomers, what language they speak and in what currency they prefer to see pricing.

Joyce stressed that the currency used in pricing is important. “This is because customers are likely to purchase a product/service if it is in their own currency. For example, if your target market is Japan and you’re bringing Japanese tourists inbound to do your activities consider pricing your product  in Japanese Yen instead of USD, Singapore dollars or Malaysian ringgit.”

Get prepared: Automate bookings

Joyce said this was the key part as 67% of activities providers worldwide manage their reservations and availability using some kind of system like email and a calendar. This method is, again, used much less in Asia.

Steps to take in automation:

  • Accept credit card payments or payment method preferred by your customers (Alipay, WeChat Pay, Apple Pay etc),
  • Use a reservation or booking platform system to manage your availability and business. “When you digitalise your payment choice it’s easier to share unlike when it’s on paper,” said Joyce.
  • Review your pricing to ensure your added costs are considered,
  • Get a website with your own domain and brand, use it to distribute your brand.
  • Connect your online booking system to your website so people can book online.

Direct business is good business

“90-98% of your sales will  come from direct business if it is done right,” said Joyce.

Here’s how get more direct business:

  • Set up you Google My Business profile, that’s how people look for you. Do that right away.
  • Ensure you have rich descriptions, content, photos and videos on your website to describe your tours.
  • Set up social media profiles for your business – Facebook, Instagram, Twitter, WeChat.
  • Develop a content strategy, if you can, to improve your SEO.
  • Use Google Adwords Express or Google AdWords to drive direct customers from Google Search. Start advertising. It’s a very effective way to drive business especially locally on mobile.

In closing his presentation,Joyce reminded the delegates that for their experience business to be discoverable just remember to do the following – “price your activities accordingly, use a reservation system, connect to the important channels and use digital marketing effectively.”

Download Stephen Joyce’s presentation (PDF)

Featured image credit: spkphotostock/Getty Images

Part 2 of Snap Talks at Indie Penang next week

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