China Ready, Tourism, Destination Marketing

Is it Ctrip or No Trip? Tuniu gets busy ! Will the dolphin beat the cow. Will the camel get the hump?

 

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Many China travel  observers believe that Ctrip is in an unassailable position. The team at Tuniu would disagree. They are taking aim at Ctrip and Qunar. What makes Tuniu different? It focuses on leisure travelers. Ctrip and Qunar do not. This article appeared in the China Morning Post July 17th…….Will the dolphin beat the cow? Will the camel get the hump?……Read on……………

Chinese online travel agent Tuniu takes on Ctrip, Qunar in flight bookings market

Tuniu Corp, a Chinese online leisure travel company, has set its sight on the flight booking business, tapping into a field dominated by leading players Ctrip and Qunar.

“For the next few years, we expect our air ticketing business to see a fast growth rate in both domestic and international flight bookings,” Tuniu’s president and chief operation officer Yan Haifeng told the Post in an interview in Beijing.

As China’s top website for package tours, Nasdaq-listed Tuniu has stepped up its expansion in the flight and hotel bookings business since the beginning of this year.

The company said air ticket transactions on its online platform grew about 13 times in the second quarter of this year from a year ago. Hotel bookings in the second quarter increased 22 times from the same period of last year. Despite the rapid growth in this segment, the contribution of the flight booking business is still small compared with Tuniu’s core package tours, Yan said.

“With a faster growth rate compared with our peers and the huge potential, we expect our market share to increase significantly in the future,” he said, without providing any figures.

The prospects for China’s air travel booking market is promising amid a rapid growth in outbound travel. The price competition among online travel agencies was fierce until the merger of Ctrip and Qunar last year, which formed a new dominant force in flight and hotel bookings.

Tuniu is differentiated from other competitors as it targets leisure travellers, Yan said.

“Many of our peers focus on business travel which is different from leisure travel destinations,” he said.

“From our experience in package tours over the years, we have more resources and an established network in booking hotels and flights in destinations for leisure travellers,” Yan said.

The travel agency negotiated closer tie-ups with airlines this year, he said. Leading airlines including China Eastern Airlines, Air China, Hainan Airlines and Capital Airlines have opened flagship stores on Tuniu’s platform, while a number of airlines are preparing to join the platform, Yan said.

HNA Tourism, a subsidiary of HNA Group which controls Hainan Airlines, announced a US$500 million strategic investment in Tuniu in November 2015, becoming its largest shareholder.

As Chinese airlines scrap commissions for travel agencies in order to boost direct sales, profit margins in the air ticketing business for Tuniu and other players come under pressure.

“Although airlines want to increase their direct sale channels, they still need a number of other channels to get access to more customers,” Yan said.

Flight and hotel bookings are the services that can benefit the company’s existing package tour business, he said.

In the first quarter, Tuniu posted a 62.8 per cent year on year increase in revenue to 2 billion yuan (HK$2.3 billion), however, its net loss for the period more than doubled to 539.5 million yuan from 233.1 million yuan in the same period last year. Separately, Ctrip reported a first-quarter loss of US$244.8 million.

“We are optimistic that online travel agencies will turn to profit next year after some reshuffles and consolidations in the industry,” Yan said.

Price competition has come to an end because of the dominance of Ctrip and Qunar that will help improve profitability of existing players, he said.

“The investment spree in the online travel agency sector has cooled down as the capital market has become more rational. The competition will become less fierce,” Yan said.

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China Ready, Tourism, Destination Marketing

Yellowstone hires Mandarin-speaking interpretive rangers

This article appeared in Montana’s Missoulian newspaper written by Larry Mayer.  (China Ready Partners observation: As Chinese grow in numbers and we see more repeat visitors independent Chinese travelers go off the beaten track and explore gateway communities and more. Self drive is emerging as a “new” model. We also see a need for a more authentic National Park experience and not just a ‘drive-by’ )

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BILLINGS – Yellowstone National Park has hired three Mandarin-speaking interpretive rangers this summer to help ease communication with a growing influx of Chinese tourists.

“It’s great to show the Chinese visitors my country, after they showed me theirs,” said Evan Hubbard, one of the rangers, who studied in China for two years. “They are coming here and everything that is so familiar to us is completely foreign to them.”

“During last summer we saw that this could be helpful,” said Rich Jehle, South District resource education ranger in Yellowstone. “We have all kinds of basic safety publications in different languages. But it’s different having someone who can speak directly to a visitor.”

Yellowstone doesn’t track visitation by nation of origin. Instead, the park’s staff is simply relying on a perceived increase, one that the West Yellowstone Chamber of Commerce has noted, as well.

“We just know it’s a significant number,” said Mary Sue Costello, president of the chamber. “We have felt this switch for probably three or four years.”

“It’s probably been recognized for a few years but last year was where the increase was very evident,” Jehle said.

Huge increase

Chinese visitation to the U.S. increased by 451 percent between 2007 and 2015, according to statistics provided by the U.S. Department of Commerce. Of the 2.1 million Chinese visitors in 2014, 34 percent were on vacation, or more than 740,000.

The trend has been noticed by states that are bringing in experts to help them cater to Chinese visitors. Costello said Montana’s 2015 Governor’s Conference on Tourism and Recreation brought in Haybina Hao, vice president of the National Tour Association, to help Montana businesses adapt.

Hao told Travel Pulse magazine in an interview earlier this year that, “The China market, we have to understand, is culturally very diverse, totally different from the typical North American culture. It’s politically very sensitive, and you need to always be politically correct. It needs to be diplomatically appropriate. So it’s a very challenging market.”

A story in the July 5 Idaho Falls newspaper said the city is seeing a big overflow of Chinese visitors who are on their way to and from Yellowstone and businesses are starting to cater to them with Mandarin speaking hotel receptionists, instructions written in Chinese and the use of translations apps on cellphones by businesses to close the language barrier.

The jump in Chinese tourism to the United States is due to the country’s estimated 300 million members of the middle class – who have more expendable income – and a relaxation of government travel restrictions.

One statistic that Yellowstone does track is the number of buses that pass through the park’s gates. In 2015 the park counted more than 10,500 buses, an increase of 17 percent over 2014, which saw a 21 percent increase from 2013. Tour buses on average have about 50 seats, but it’s not clear what the park counts as a bus. Some may be much smaller.

“We don’t know how they are coming in,” Jehle said. “But there are a lot on tour buses and driving cars.”

Ranger responsibilities

The three Mandarin-speaking interpretive rangers have the same duties as any other interpretive ranger – providing information about park resources, orientation, giving formal interpretive programs like guided walks, roving the Old Faithful or Madison areas to talk to visitors informally and providing education on regulations. They also can interpret during medical emergencies.

Hubbard said Chinese tourists in Yellowstone are often looking to other visitors for cues on how to behave.

“There tends to be two very distinct interactions: safety or regulation issues, like walking off the boardwalk in a thermal area,” he said. “That becomes an education opportunity. Often they say they had seen someone else or saw tracks.

“The more fun interaction is hearing Chinese speakers while I’m out roving and I will give them a greeting and their eyes will light up,” Hubbard said. “Usually it’s their first time here and they are excited to have this unique opportunity.”

Another record?

The three Mandarin-speaking rangers were hired from a pool of about 10 applicants, Jehle said. Two are Caucasians who taught in China and one is Chinese resident who just became a U.S. citizen.

The increase in Chinese tourism comes as Yellowstone is on pace for another year of record visitation. Last year more than 4 million people visited the park, and this year’s monthly statistics show the park is on pace to top last year. With more people, the park’s services – everything from bathroom facilities to roads and parking lots – are being filled to capacity.

Each day the Old Faithful Visitor Center alone records more than 10,000 visitors at this time of the year, Jehle said.

“I would say this has been building for several years,” he said. “Obviously, solving all of the problems of how popular this park is isn’t easy to do. But if we can solve little problems like basic communication to address visitors, it is helpful.”

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China Ready, Tourism, Destination Marketing, Uncategorized

So, What Makes L.A.’s Go123 Hopper Shuttle Bus the Poster Child for China Ready?

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Go123’s Mr Hoppy Rides in to Town

Serial entrepreneur David Huang, owner of Chinese Host Inc., had a dream. In reality he has many. Huang, was born in Guangzhou. His family moved to Los Angeles when he was very young. Although he has roots in China, he grew up and was exposed to the L.A. “let’s make a deal” environment.

He also developed a passion for travel, tourism and the great outdoors. He became a tour guide, he obtained a commercial bus drivers license, he ran a bus company, he bought a couple of buses, he started a tour company, he started a DMC in Las Vegas, he built a reservation system for Chinese travel producers, he built his own bus company, he started a Chinese receptive firm, he opened offices in China and today David Huang owns the largest and most respected Chinese Travel company in the western USA, Chinese Host Inc., (CHD), generating over one million visitors since 2011.

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David Huang

David always did things the right way, which is not always the way all Chinese operators work. Tales of fake log books, forced shopping stops, unlicensed companies, even bus drivers handing over sums of cash in brown paper bags – all horrify David, as it gives Chinese bus operators a bad reputation. He wanted to take the most professional path. Safety first and foremost……..Licensed, bonded, $5M insurance liability on every bus……and purchased a nice selection of Prevost coaches as they are ISO 14001 certified for environmental sustainability. He even recruited a National Park Service ranger to train the tour guides, as David wanted the best customer experience possible. Quality over quantity.

As David’s reputation grew over 25 years, industry organizations asked David to assist in their China marketing and business strategies. National Tour Association, Receptive Services Association, North American Journeys, State of Nevada, Las Vegas Convention Authority, Los Angeles Visitor Bureau (and many more) have David’s fingerprints all over their China programs.

David has always had his finger on the pulse. Always in the game. More importantly he could see where the game was headed. That’s what entrepreneurs do.

David was born China Ready. He didn’t need China Ready education. It’s in his DNA.

He foresaw the tsunami of Chinese tourists flooding into North America. He saw the growth in Chinese airlines coming to America. (Over 250 flights a week now including US carriers). He saw the over US$1 billion in subsidies given to the 4 Chinese airlines serving America given by local Chinese governments. He knew they would require transportation needs to get them around unfamiliar surroundings, getting them to enjoy the things they want to do – shopping, attractions, museums, etc. At the same time David realized that the demographic profile and psychographic behaviors were changing. Younger, better educated, affluent, e-connected, and independent. They desired the freedom to make their own choices in travel. Chinese travel producers, such as the mega OTA Ctrip, also saw the trends and began planning modular travel segments making it easier for travel agents and consumers to build their own trips. Times, they (still) are a’changing.

Driven by insight, David swiftly developed a Chinese dedicated transportation system for Greater Los Angeles, that would cater to the more independent Chinese traveler. Not a tour bus but a shuttle bus transit system with a hop-on hop-off model. This was the soft opening of Go123 Hopper. Five routes traveling to the “must see” destinations in L.A. and down to Anaheim.  

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There were several strict criteria.

  • Every bus licensed, bonded and carrying $5M liability
  • Seat belt at every seat
  • Each bus with a Chinese speaking driver
  • Each bus WiFi enabled
  • Video screen in each bus
  • Free Apple and Android apps
  • QR codes enabling download of real time GPS maps
  • Details on what to do on the route plus offers

Go123 Hopper was presented to top DMO officials who all embraced the transit system enthusiastically; as did the local area attractions, shopping, dining and other points of interest.

CHD then ensured the program was loaded in to its own booking engine and introduced to the top travel producers in China. Ctrip made a special trip to test the service. The result of that trip was “two thumbs up” and immediately placed Go123 Hopper into in packages that can be purchased as part of the “Modular” travel trend.

Following this, numerous travel companies jumped on the Go123 Hopper bus. A B2B campaign followed reaching 2,000 Chinese travel agencies, wholesalers and OTA’s. A Chinese B2C campaign ensued introducing Mr. Hoppy, a whimsical Chinese style animation of a Go123 Hopper bus.

Its amusing to see the creative process at work. It’s fun to follow the flow from smart phone scribble to consumer ad seen today throughout China and Hong Kong. 

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Smart phone scribble to consumer ad in Simplified Chinese (Ad design FourthIdea, Buffalo)

Today, Ctrip feature Go123 Hopper in over 20 packages. The growing list of travel producers now include Lulutrip, Haiwan, Tuniu, ToursForFun, usitrip, Majestic and more.

Go123 Hopper checks all the boxes for the newly renamed F.I.T market in China (Fully Independent Travel). It provides safe transportation in a city where even other Americans prefer not to drive, Chinese speaking and knowledgeable drivers, freedom to explore greater Los Angeles from Universal to Disney, free e-maps on demand, free route apps, destination information, hop on – hop off, and of course WiFi connected.

This is the ultimate poster child for being China Ready but I strongly believe this carries way beyond a great example of China Ready. This clearly spells out W-E-L-C-O-M-E. After all isn’t that what being a great host is all about, I applaud the Southern Californian DMO’s for their forward thinking and David Huang as the best Chinese Host you will find this side of the Pacific.

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China Ready, Tourism, Destination Marketing, Uncategorized

More Chinese tourists to visit US in 2016, says travel agency

Story source – GBTIMES BEIJING & US Travel Association- 2015/12/28
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Figures from the US Travel Association show that around 3 million tourists from the Chinese mainland visited the U.S. in 2015, up 16% from last year. (photo courtesy of China News Service)

Insiders are predicting an increasing in the number of Chinese tourists visiting the United States next year, partly due to the easing of restrictions on Chinese citizens acquiring tourist visas.

2016 is also the China-US tourism year, as proposed by Chinese President Xi Jinping and his US counterpart Barak Obama.

Sun Geng, Chief Operating Officer of L&L Travel Enterprise, the biggest travel agency for Chinese tourists travelling to the States, has predicted that the 2016 Spring Festival period will be their busiest time, with more than 5,000 Chinese travellers having already applied for tours in that period.

Sun said that in the future, they plan to develop more travel destinations to remoter parts of the US and not stay just confined to those containing first-class landmarks.

“In the next step, we will develop more tourist destinations in the second-tier or third-tier US regions, including the Midwest, which showcases the original US culture. We hope our tours will not only let Chinese tourists see the Statue of Liberty in New York, the Universal Studios in Los Angeles and the Golden Gate Bridge in San Francisco. We will offer more tours and let young and old Chinese people experience true U.S. culture and spirit.”

The travel agency welcomed 260 thousand Chinese tourists this year, the highest number among all its competitors.

Meanwhile, figures from the U.S. Travel Association show that around 3 million tourists from the Chinese mainland visited the US in 2015, up by 16 percent from last year.

China is behind Mexico, Canada, the European Union, and Japan in terms of the numbers of tourists visiting the US But, by 2020 China could become the third biggest source of visitors.

This growth has been facilitated partially by the new visa arrangement announced at the APEC Summit in November 2014.

B-category non-immigrant visas were extended to 10 years for Chinese business travelers and tourists going to the US.

Many Chinese tourists have welcomed the extension.

“The travel visa was extended to ten years last year, which made everything easier. And so we applied for 10-year visas, with a plan of coming here for the New Year.”

The amount of money Chinese tourists spend during their trips in the US is also increasing significantly, which has proved to be good news for the US economy.

“The two of us have spent four to five thousand already on hotel stay. We are staying for two weeks here, so probably we will spend another $2,000 to $3,000. We were also asked to do some shopping for friends and family as New York is a great place to buy luxury items. In total we plan to spend around $20,000 to $30,000.”

By 2021, Chinese tourists are expected to spend a staggering $80bn annually in the US according to the US Department of Commerce.

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