Nov 16, 2023: China Market Update
Alina Xiang
President & CEO, East West Marketing ◆ China Tourism Expert ◆ Trusted Marketing Partner to Travel and Hospitality Clients
Latest News
In the upcoming winter-spring flight season, the number of China-US direct regular passenger flights is expected to increase from the current 48 (24 round trips) per week to 70 per week, offering a boost for the exchange of personnel and trade between the two countries. As flight volumes recover, the prices have been steadily decreasing.
The US Department of Transportation (DOT) also announced the new arrangements, noting that the new cap would be effective starting from November 9.
Chinese airlines which could add more flights to the US include Air China, Beijing Capital Airlines, China Eastern Airlines, China Southern Airlines, Hainan Airlines, Sichuan Airlines and Xiamen Airlines
The DOT seeks to continue the ongoing and productive dialogue with the CAAC to facilitate a gradual, broader reopening of the US-China air services market, the US department said.
Source: Global Times
Outbound Market & Industry News
Social media platforms in China are buzzing with talks about the Spring Festival holiday arrangement of 2024 which was released by the State Council on October 25. The release of the holiday arrangement has searches on travel portals. The online travel services provider Qunar said that searches for train tickets and international flight tickets doubled at its platform just in 30 minutes after the arrangement released. It said that some "early birds" in Shanghai and Changsha in Hunan province have made bookings at the platform.
Source: China Daily
China issued more than 600,000 visas to foreign visitors in the third quarter, nearly 2.7 times the same number from the same period last year, in the strongest sign that travel has rebounded to pre-Covid levels, according to the latest data. On Tuesday, data from the National Immigration Administration showed 123 million cross-border trips were recorded from July through September, a giant 454% jump compared with the same period last year.
Source: SCMP
Saudi Arabia has been granted Approved Destination Status (ADS) by China, with the goal of welcoming 3 million Chinese visitors by 2030. The country is ready to accommodate Chinese tourists with new direct flights, customized products, and strategic partnerships in place.
Source: China Daily
On November 1, 2023, Active America China ?? in partnership with East West Marketing Group Shanghai, made its eagerly awaited return in San Francisco. The conference, which is specifically focused on the inbound Chinese Tour & Travel market, saw the participation of 50 U.S. suppliers, 46 Chinese buyers, and 6 receptive operators. The two-day conference featured half a day of educational sessions and one and a half days of one-on-one marketplace meetings.
To celebrate the launch of United Airlines' Los Angeles-Hong Kong-Los Angeles nonstop service, the Los Angeles Convention and Visitors Bureau (Los Angeles Convention and Visitors Bureau) and United Airlines hosted the "Hong Kong - Los Angeles New Service Launch & Agent Appreciation Dinner"? in Hong Kong on October 26. Eighty representatives of travel agents and ticket agents from Hong Kong and South China gathered to celebrate this exciting occasion. The Los Angeles-Hong Kong-Los Angeles route is the first direct Los Angeles route launched by United Airlines in Greater China after the pandemic.
Trip.com Group held its Global Partner Summit in Singapore, inviting guests from across the travel industry, including accommodation, airline and destination marketing partners. More than 2,000 partners and media attended the event held at the Resorts World Singapore – Convention Centre.
James Liang, Co-Founder and Chairman of Trip.com Group, explained why travel is unique from a multifaceted perspective. "Psychologically, it fulfils a high level of need which is not easily saturated. In economic terms, it is a long-term, high-growth industry. At the social level, it promotes human understanding, enhances communication and brings peace and inclusiveness. Philosophically, tourism helps promote human innovation, thus pursuing the long-term prosperity of human civilisation."
Source: PR Newswire
Inbound and Domestic Market
The Foreign Ministry said that China will continue to improve its visa policies and actively create more favorable conditions to boost cross-border travel. The statement came a week after Chinese embassies and consulates in more than 10 countries, including the United States, the United Kingdom, Italy, the Netherlands, South Korea, Singapore and New Zealand, ceased online visa appointments in favor of walk-in visa application services.
领英推荐
Source: China Daily
China saw over 3.67 billion domestic tourist visits in the first three quarters of this year, the Ministry of Culture and Tourism said Friday. The figure marked an increase of 1.58 billion tourist visits, or 75.5 percent year on year. The expenditures by tourists amounted to 3.69 trillion yuan (about 514.06 billion U.S. dollars), soaring 1.97 trillion yuan, or 114.4 percent, the data showed.
Source: Xinhua
East West Marketing Insights
Q+A with Fion Wan, Vice GM of Outbound Travel, China International Travel Service (CITS) Shenzhen CO., LTD.
China International Travel Service ShenZhen Co., Ltd (brand name: Eachtravel) was established in 1954 with 68 years of deep cultivation in the tourism industry. Currently, the number of employees has more than 1700 people, the business scope covers inbound travel, domestic travel, outbound travel, conference and exhibition and various types of theme tour, and it is the leading travel service company in Shenzhen and even in South China.
Over the years, Eachtravel has won many awards and is far ahead in the national travel industry: it has been ranked among the top 10 travel agencies in China, the top 3 in Guangdong and No.1 in Shenzhen for many years in a row in the ranking of travel agencies announced by the National Tourism Administration.
Q: With recent positive developments in various aspects, what are your expectations for the outbound travel market to the United States in the next year? What is the expected recovery level/percentage of tourist numbers?
A: With the recent increase in direct flights between China and the United States, it‘s indeed good news. If I were to summarize 2024 in a simple sentence, I’d say it‘s a year of laying a solid foundation for professionals in the American outbound travel market, focusing on steady progress for the long haul.
Looking back at 2023, although the third batch of destination openings by the Ministry of Culture and Tourism included the United States in mid-August, which was fantastic news. From August to November, there have been significant challenges for group tours to the US. These challenges mainly stem from a few aspects. First and foremost is the issue of visa application. Currently, the appointment for a visa in Guangzhou is scheduled as far as May of next year, significantly limiting the group of customers without visas from traveling. I believe improvements in visa appointment times in 2024 will significantly help in group formations.
The second challenge lies in flight availability. While United Airlines has increased its routes, such as the Los Angeles to Hong Kong route and doubled the San Francisco to Hong Kong flights daily, these are excellent developments. However, even with these increased flights, the occupancy rate for individual tickets remains high. This indicates that despite the additional flights, there's still considerable pressure on group capacity. In terms of group policies, there are relatively challenging aspects. So, combining these visa challenges with flight availability, it has made the recovery of independent group tours somewhat difficult. Looking towards the coming year, our hope is for independent group tours to recover steadily and in an orderly manner.
Regarding the level of tourist recovery, to be candid, it‘s challenging to predict at this moment because it depends on the visa and flight capacity I just mentioned. If we can recover to about 20% to 30% of the pre-pandemic numbers, I would consider that quite optimistic. As for a reference, after the recovery of outbound tourism in 2023, particularly in the South China market, like our company’s operations, our long-haul routes had a total revenue of $18.3 million, with the Americas accounting for less than 10%.
Q: Currently, what changes have there been in the overall customer base and market demands compared to pre-pandemic times?
A: Currently, our customer base primarily consists of business inspection groups and trade show groups, with group sizes typically under 10 people. Services we provide are ground transportation and local guides, as clients often handle their own flight and hotel bookings.
Q: What will be the focus of your business and primary product offerings until next summer?
A: In our strategy, we will primarily focus on family-oriented small-group customizations in our product framework. For instance, our ‘Luxury Lite Global’, incentive meetings, and summer student groups. Additionally, our thematic series will include themes like parks, prestigious schools, famous cities, amusement parks, and summer camps. Subsequently, our business emphasis will closely follow changes in visa and airline policies, aiming for the orderly recovery of independent group tours.
Q: How is the recovery of your American travel products progressing at the moment?
A: Our company greatly prioritizes product development, and post-pandemic, we have consistently emphasized this aspect. However, due to the previously mentioned visa and limited flight capacities, there's been a delay in the process from product development, training, promotion, to the final refinement. The recovery is not yet particularly ideal.
Q: Apart from conventional products on the East and West Coasts, are there plans to introduce more in-depth or new emerging destination products in the coming year?
A: Considering the characteristics of CITS and the Shenzhen market, we've been placing emphasis on in-depth products, including thematic products, emerging experiential activities, and products from emerging destinations, such as San Antonio, New Orleans, which are more niche. Tailoring destination products according to flights, customer demands, and age groups is our aim, not just focusing on the Americas, which is a significant part of CITS's entire product line.
Q: What are the main challenges you are facing in product development and marketing?
A: We face two primary challenges. Firstly, there's still a lack of familiarity with emerging destination products, requiring on-site inspections or professional training. Secondly, from a marketing perspective, the exposure in general public marketing efforts is not enough. Therefore, public awareness mostly revolves around conventional East and West Coast American products, and the refinement of these experiences is not particularly high.
Q: In the process of product development and operation, what kind of assistance and support do you most need from the destination?
A: Taking into account the two points of our two key challenges mentioned earlier, compared to the support some other destinations receive, I hope that the US Travel Association and the individual US destination tourism boards can increase their promotional efforts, including funding and training activities.
Notable Key Aspects
East and South China remain the dominant sources of outbound travelers.
East and South China have always been significant outbound travel sources, with sentiment scores? of 28 and 20 in 2023 H2. Even though East China and South China's sentiment scores are roughly 10 scores lower than those of the same period in 2019, 70% of respondents anticipate that their outbound sentiment scores will be comparable to or better than 2019's, largely for the? following reasons: