2024-11-26
October 31, at the WTA·Xianghu Dialogue 2024 in Sanya, Hainan, Ms. CHEN Baiyu, President of Guangzhou Lingnan Group Holdings Company Limited, Rotating President of China Association of Travel Services, delivered a keynote speech on "Forging New Paths: Development Trends in China’s Travel Service Industry". Below is a summary of the key points discussed.
As I see it, 1999 marked the advent of mass tourism, 2019 signified the integration of culture and tourism, and 2023 can be regarded as the year of the industry’s "reset". Looking ahead, 2024 stands as the start of a new era for China’s tourism industry—a year where innovative productivity drives the high-quality development of a modern tourism ecosystem. Industry professionals, whether in travel agencies or related sectors, must closely follow these trends.
Let us first discuss travel agencies. Many agencies are transitioning from single-function tourism organizers to comprehensive travel service providers. For example. GZL, often seen as a traditional group travel agency, operates two parallel product lines: group tours and customized travel, with the latter accounting for 30% of its revenue. GZL’s group tours are characterized by transparency, well-defined themes, and exceptional value for money. Customized travel is further divided into private and large-scale options. Private customization targets clients with highly personalized travel needs, emphasizing social interaction in small, intimate groups. Large-scale customization encompasses corporate meetings, educational tours, and business travel, standing out for its creative planning and seamless collaboration. With this dual strategy, we aim to further enhance the value of travel agencies. Travel agencies possess unique, irreplaceable advantages, reflected in three key areas: 1. Resource Integration: As a core competency, this enables agencies to combine and coordinate diverse resources effectively. 2. Ground Services: Agencies excel in providing on-the-ground support and a personal touch that platform businesses often lack. 3. Risk Management: Their robust risk management capabilities ensure travelers a secure and worry-free experience. Over the past four decades, China’s tourism industry has transformed into one of the world’s most vibrant and promising markets. Travel agencies, with their ability to innovate and adapt, are well-positioned for a bright future.
Next, let’s explore the closely related hospitality industry. Hotels are no longer just accommodations; they are increasingly adopting the "lodging+" model. This approach integrates lodging with a variety of new formats by embracing creative ideas, embedding cultural innovations, leveraging advanced technologies, and introducing fresh business models to offer unique experiences. Hotels are becoming an integral part of daily life rather than just a service for travelers. A recent example of this transformation is our collaboration with China Southern Airlines, where our hotel teams provided in-flight catering for the C919, China’s domestically produced large aircraft. This initiative takes hotel dining services beyond the ground, taking them into the skies and even across international boundaries. Additionally, we have partnered with local cultural IP projects to bring Cantonese chefs into scenic rural areas, curating regionally inspired menus and hosting distinctive dinners. This fusion of mobility and cuisine creates sustainable business opportunities while redefining the travel experience.
Another key area of focus is exhibition industry. Encompassing venue operations, conference management, exhibition organization, and tourism services, it serves as a vital traffic gateway and revenue driver for both travel agencies and hotels. In recent years, the exhibition industry has undergone significant transformation and is set to accelerate its evolution into a multi-functional modes. This integration of exhibitions, conferences, sports events, and activities will enhance efficiency and connectivity across upstream and downstream enterprises with the sector.
Reflecting on these developments, we recognize that tourism is not only a cradle for new productive forces but also a discerning arena for patient investors. It demands a long-term vision and consistent value creation. To successfully navigate this dynamic landscape, companies must accurately understand consumer segmentation, pursue rational and balanced growth in scale and investments, and maintain a focus on profitability with operational logic. These elements are critical for building a sustainable competitive edge and ensuring the industry’s steady progression into the future.
Four key capabilities are essential for businesses to thrive in this new era: 1. Enhancing strengths to boost competitiveness: Core competencies vary by company, encompassing brand, standards, business models, resources, customer bases, and technology. Businesses must adapt to local and industry-specific conditions and their own capabilities, proactively cultivating strengths that meet present challenges and anticipate future demands. 2. Addressing weaknesses to foster innovation: With over 60,000 travel agencies nationwide, not all can independently develop cutting-edge technology. Instead of pursuing unattainable innovation, companies should adopt existing technologies effectively. This requires identifying weak points, embracing market feedback, responding swiftly to changes, and adjusting strategies accordingly. 3. Building resilience to mitigate risks: This involves prioritizing financial and risk management, maintaining healthy finances, focusing on cash flow, and ensuring a reasonable debt ratio to withstand economic fluctuations. 4. Maximizing returns to enhance investment value: Improving investment returns requires balanced operations. This includes aligning inputs with outputs, scale with profitability, operational effectiveness with asset management, and online convenience with offline experiences.
Looking ahead, we are confident in an open and inclusive future—one characterized by sustained growth, optimized structures, and positive momentum. We look forward to collaborating with industry peers to uphold our commitment to excellence, deliver exceptional services, and contribute to a brighter future. Together, we can enhance quality of life, drive economic growth, create jobs, generate wealth, and take on greater responsibilities in fulfill our social obligations.