Insights & Inspirations | Seizing Opportunities and Adapting to the Trends: Forging Ahead to Thrive in the Altered Landscape of Tourism

2023-03-28

Wang Haimin

Director and General Manager of China Tourism Group Corporation Limited

Full text :

Your Excellencies, distinguished guests, ladies and gentlemen:

Good afternoon!

It is my great honor to participate in the Xianghu Dialogue. First of all, on behalf of China Tourism Group, I would like to express my congratulations on the opening of the Xianghu Dialogue.

Here, I would like to share a few points on the theme of the meeting.

First, January’s tourism data shows China’s tourism market has notably rebounded. The domestic travel during the New Year holiday was 42.8% of the number in 2019, before the outbreak of COVID-19, with its revenue stood at 35.1% of that in 2019; after a short span of 20 days, the number of domestic travel during the Spring Festival holiday shot up to 88.6% of number in 2019, with the tourism income recovered to 73.1% of the that in the same period before the outbreak of COVID-19. The rapid rise we witnessed from the New Year’s Day to the Spring Festival can shed some light on the coming holiday seasons this year, like May Day, summer holiday, National Day holiday, and we believe the tourism market will be very promising. According to the China Tourism Group, 6.13 million tourists were received in January, a year-on-year increase of 62% and a 5% increase over the same period before the outbreak of COVID-19. Revenue rose 26% year on year, surpassing the pre-epidemic level. The steady rise of the market in the beginning of the year laid a solid foundation for the gradual recovery and new development of the Chinese tourism market this year.

Speaking from the perspective of consumption potential, China has a sizeable tourism market. Recent statistics shows the number of middle-class families in China with an annual income of over RMB160,000 has reached 138 million, and another 71 million will join the group by 2025. No other country or region in the world has so many new middle-class families every year as China. Last year, household deposits in China increased by RMB17.84 trillion, 1.8 times the increase in 2021. It shows that China has huge consumption potential. With the further recovery of consumers’ confidence, the unprecedented desire of Chinese consumers to go out for travel and shopping will accelerate the recovery of the tourism market of China and the world at large.Of course, the recovery of the tourism market is not achieved overnight since the process will involve twists and turns as well as challenges. The tourism market recovery in China is not a simple return to the past, but instead, we have seen new changes and new characteristics in China’s tourism trends as we are going out of the aftermath of COVID-19.

In terms of the tourism retail, the middle and high-end market represented by luxury goods took the lead to rebound in China. A similar trend is seen in the post-epidemic international consumer market, with global sales of personal luxury goods going up 22% year on year to a record high of 353 billion Euros. By 2025, China is expected to become the world’s largest consumer market for personal luxury goods. All these show that Chinese and world consumers are experiencing a new round of consumption upgrading after COVID-19.

In attracting prospective customers, before the outbreak of the pandemic, the development of OTA platform has caused great impact on traditional travel agencies, and changed consumers’ consumption habits. During the pandemic, the rise of short video and live broadcast channels such as TikTok, Kuaishou and Xiaohongshu took away some traffic from the OTA platform, and brought new opportunities for scenic spots, tourism destinations, hotels, travel agencies and tourism retail, allowing such traditional tourism resource providers to have direct connection with consumers via live broadcast channels.Innovation today will eventually become part of the tradition tomorrow. Witnessing the ChatGPT explosion worldwide, it is safe to say homemade AI products are coming out soon, which can be expected to become a new interactive traffic channel to assist customers in preparing travel plans and booking tourism products. The combination of traditional tourism and new technologies will make high-quality tourism resources more direct, reliable, effective and easily accessible to tourists.

From the perspective of traditional tourism, we can see many changes during the Spring Festival this year. The per capita tourism consumption is lower than the level before the pandemic, which reflects that consumers have become more rational and seek greater value for money in buying products and services. The average distance covered by tourists increased 57% year on year, returning to 76% of the distance before the pandemic. During the Spring Festival, Sichuan and Yunnan, representing the destinations of distant natural landscape, respectively ranked first in China in terms of the number of tourists and tourism income. 79% of the tourists choose self-driving tour, and the orders for small-group travels surged year on year, but the domestic group travel organized by traditional travel agencies fell sharply year on year. Elders have become a significant portion of tourists. Nearly 20 million people in China retire every year, creating a vast potential market for travel products suited to elderly people. These changes in tourism consumption will have a profound impact on the supply of services in China’s tourism market.The tourism industry in China can emrbrace big market opportunities better only through cooperation and innovative development.

First, we are in an interdependent world, where we are interconnected in the global flows of goods, services, capital, people, data, innovation IP, and we have the global value chain built on these flows that has created a world of growing prosperity. The best VR, meta-universe, virtual world we have today cannot replace a travel experience in person and communication face-to-face, just as the one we are having now. This February 6, China’s outbound group tour kicks off after three years’ pause, which also marked the start of the resumption of inbound tour. Although the full recovery will take time, I believe Chinese tourists and the Chinese market will give new impetus to the global tourism recovery.

Second, we must always bear in mind the essence of tourism services. The essence of tourism is to serve consumers and deliver wonderful travel experience for consumers. We need to organize and make products to realize the travel vision of consumers, sort out the otherwise scattered tourism resources, and strengthen the construction of service system in the whole industry chain of catering, accommodation, travel, shopping and entertainment. We should respond to consumption upgrading with improved service, meeting the changing demand with the changes in products, and construct the consumption ecology from innovative consumption scene. In all, we should provide services based on the performance capability over the whole industry chain and give consumers unique immersive experience.

Third, we will deepen the integration of culture and tourism. Tourism meets people’s needs at both the material and spiritual aspects. In-depth integration of culture and tourism is the way we must follow for development of tourism. Let us take the example of Shapotou National Reserve and Desert Star Hotel in Ningxia. The desert landscape that is shockingly differet from the city view and the star sky come together at the hotel to add a poetic flavor to the tourism, bringing the tourists a direct feeling of the famous line “The lone smoke is rising erectly from the vast desert; the round sun is setting slowly over the long river” in the great poem from the Tang dynasty. Another example, the Haikou International Duty Free City Shopping Complex newly opened at the end of October 2022 has created an immersive shopping space in cooperation with an international famous studio that won the Academy Award for Best Visual Effects Award for six times. The Shopping Complex integrating modern museum, 4D cinema, concert, fashion show gives visitors a unique cultural fantasy tour during shopping.

Fourth, we shall adhere to product and channel innovation. The individualized, diversified high-end demand of tourists poses demanding requirements for tourism enterprises. We will closely follow the trends of big data and artificial intelligence, promote live broadcast and direct marketing channels based on the scenario application, and realize direct interaction with our consumers. Our effort is aim to turn consumers into our marketing ambassadors, and suppliers into our partners, so as to expand the horizon of our products and services, and work with our consumers, suppliers and partners to define the future of China’s tourism industry.Tourism innovation and service knows no ends. We will always keep a sincere attitude, pass on joy, and work with devotion to help Chinese people’s aspiration for a better life come true. China Tourism Group is looking forward to strengthen exchanges and cooperation with all tourism industry colleagues and partners to jointly usher in a better future of tourism!

Thank you all!