In our last issue of INBOUND, we posed the challenge to those in the U.S. inbound tourism industry interested in the Chinese market with the headline: “Chinese Want to Travel. But to the USA?” Two weeks, later, most of the signals point to a continued expansion of sales and bookings for travel within China. But as far as the re-opening of China as an important overseas source market to the United States … well, think 2021.
From a dialogue we had with some staff at Dragon Trail Interactive, a global marketing firm headquartered in Beijing, we’ve digested some of the discussion into the following takeaways:
1. Growth of Domestic: China’s domestic tourism market is continuing a steady recovery, and the lifting of the ban on inter-provincial group tours in mid-July – after nearly six months – is a significant milestone. The announcement led to a surge in traffic to travel websites. Fliggy, Alibaba‘s online travel agency platform, more than 100,000 trans-provincial group tours, air tickets and accommodation reservations were sold in a little more than a week. By July 23rd, the number of daily passenger flights in China had rebounded to 80 percent of pre-coronavirus levels, reported China’s aviation regulator, the Civil Aviation Administration of China (CAAC).
2. Why is an increase domestic travel in China relevant to the USA? “While it might not seem related to outbound tourism, the recovery of the domestic market is actually an important first step to reigniting interest in travel, and for consumers to feel comfortable traveling again,” Matt Grayson, president, Americas, told us.
3. What the industry is doing in China to nurture a recovery: Chinese tourism businesses, including OTAs, airlines, and hotels, have all helped this recovery to happen with huge discounts, rewards to incentivize travel (such as extra loyalty club points, for example), giveaways, and experimentation with new sales channels such as live streaming sessions. Another example is that of the Trip.com Group, which is taking advantage of “pent-up wanderlust” by livestreaming sale events of heavily-discounted hotel stays around the world, all of which come with flexible arrangements that allow travelers to cancel or postpone the reservation with no penalty.
4. Any indication of re-start of travel to the United States? Grayson said that, “at this point, there is still almost no outbound tourism from the Chinese mainland, and this is unlikely to change before there is a relaxation of the policy that requires all incoming arrivals to China to quarantine for 14 days at a quarantine center, and to pay all expenses for this.” He noted that, in a recent consumer survey that Dragon Trail conducted, it found that the quarantine-on-return was the leading reason that respondents would not travel outside of China.
5. Any authoritative sign of just when might travel to the USA resume? The full return of international travel is unlikely, according to James Liang, chairman of the Trip.com Group, who said that travel between Asia and Europe, and Asia and the U.S. will not resume until next year. Mr. Liang said that travel stocks have regained 30-50 percent of their losses. And within the next six months, they would probably go up to 80-90 percent of their pre-pandemic levels. (Liang is chairman and co-founder of Trip.com Group, which operates four of the top platforms in China: Trip.com, Ctrip, Skyscanner and Qunar.)
Also, latest ITB China travel trends report which examined the impact the coming recovery phase will have on the planned travel behavior of Chinese outbound tourists, indicated that the largest group of those surveyed expecting recovery in this market in 9-12 months. The 2020 China Market Recovery Special Edition is based on an annual survey among 200 Chinese outbound travel agencies and travel companies, including interviews with industry experts. When asked about the recovery of the Chinese outbound travel market, respondents indicated the following:
—43 percent of those surveyed expect that outbound travel will recover within the next nine to 12 months;
—A third (33 percent) think it might take six to nine months,
—One fifth (20 percent) of survey respondents believe it will take three to six months; and
—4 percent expect to see a recovery within the next three months.
6. So, what, if anything, should U.S. suppliers and DMOs be doing? Dragon Trail Interactive put it this way: At this point, although outbound travel from China is not happening, it’s still a good idea to stay engaged with the market. This includes B2C content – a good example here is Switzerland Tourism, which has kept posting as usual on Chinese social media channels, with lots of content promoting Switzerland’s landscapes and natural beauty. They increased their followers on Weibo by around 16,000 during the second quarter of 2020. B2B engagement is also important at this time, and the Chinese travel trade is very receptive to training and ways to communicate through online events and platforms. Keeping them well informed of any updates, as well as new products, will help them to make the recovery process as smooth and speedy as possible, once international travel is possible