Culture Consulting and the Travel Industry in China

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Category: Business in Asia, Regulations
Culture Consulting and the Travel Industry in China

Culture consulting helps many companies strategize their approach toward business in terms of cultural perspective. In the travel industry, culture consultants have wide-ranging knowledge of their own culture and provide deep insights into the cultural side of the market. In China, travel agency service outlets exist for consultation purposes alone. Local travel in China has taken off (though still highly regulated) since the middle of 2020. However, China has also now started the vaccination campaign for foreigners and relaxed entry for those who have taken the vaccine. Hence, it may only be a matter of time before cross-border travel regains its pre-COVID-19 height.

Please have a look at our previous article on Vaccination Information for Foreigners in China

Travel sales and travel agencies in China are occupied these days in promoting travel within the Chinese borders. On the other hand, China’s reattainment of normalcy amid post-COVID-19 is leading the recovery of the travel industry.

Post COVID-19 travel

A joint survey by Ivy Alliance Tourism Consulting, China Comfort Travel Group, and PATA revealed that 60 percent of Chinese travelers intend to travel in 2020, with more than 45 percent wanting to go abroad. The five most desired destinations are:

  1. Japan
  2. Thailand
  3. European countries
  4. The Maldives
  5. Singapore

According to the survey, 48 percent of the respondents would like to travel with a group. On another note, 18 percent of those surveyed would like to choose a travel agency to customize their tour. Moreover, the survey results reported that overseas travelers prefer to purchase services from travel agencies.

Travel sales & agencies

China’s travel agencies (38,943 registered by the end of 2019) including the online travel booking industry have expanded substantially, before COVID-19. According to the Ministry of Culture and Tourism, the industry generated a total of RMB 710.34 billion in revenue in 2019 alone. Domestic travel shared 53.25 percent of 2019 revenue, while outbound tourism amounted to RMB 214.56 billion.

Despite the sharp decline of revenue as mentioned, the travel industry is still expected to have a significant recovery once global vaccinations are put in place. Moreover, with that renewed fervor to travel comes new trends that may also come up in the culture consulting industry.

Role of culture consulting in the travel industry

Culture consulting plays an important role in the success of travel companies or agencies in China. Through this practice, travel companies can identify timely and specific factors to be considered when making business plans. Moreover, individuals and other business owners can also take advantage of culture consulting for their China market researches.

Personalization

The digital age allows us to research our interests and be able to share those interests almost instantly through platforms like blogs or social media. Travelers are looking for the personalization of their ideal trips. Looking for experiences especially made for the individual is as popular as social media trends of “places to go”. Although these trends catch on and are based on feedback from an interconnected (social media) community, individuals who can go to their ideal travel spots are happy to share their experiences and impressions as well.

When travelers receive a satisfyingly enhanced experience, they are more likely to rebook with the company. However, travel agencies will need to identify demand patterns and personalized travel experiences ideal to a particular group or segment.

Increased segmentation

Segmentation involves categorizing the market further into smaller segments. In 2010, the China outbound travel market was divided into three segments:

  • inexperienced mass market;
  • experienced mass market; and
  • affluent segment.

Although sufficient at that time, further segmentation in the following years became necessary to describe the dynamic and ever-changing characteristics of the market. In 2018, the segments increased to five. It is necessary to identify segmented demands to enable the personalization of travel experiences. Some of the important goals of travelers who can be segmented include:

  • cultural travels;
  • outdoor travel;
  • sports spectator tourism; and
  • study tourism.

In identifying various goals and segments of the market, culture consulting and travel industries alike can have an idea of what kind of preparations they need to market their services better. In other words, for content marketing to become more detailed and precise, more market segments must be identified.

Increased diversification

Diversification in terms of travel marketing is bound to be more prominent among those utilizing video marketing and KOL marketing.

  • Video marketing – a strong marketing campaign makes use of video content to promote the culture, setting, and overall travel experience offered. This could include client testimonials, clips from the trips, and alike.
  • KOL marketing – KOL stands for Key Opinion Leader. Expert knowledge or leading individuals who are considered highly knowledgeable and relevant in the field are shown in this marketing strategy. The subject utilized is someone connected to the culture or location; or if not at least someone who has a high polarization towards the target market.

Using only one type of marketing strategy for a long time would be tiresome to today’s generations. This is especially since the digital revolution has introduced fast-paced transactions and dynamic interactions accessible through our various devices.

Digitalization

Digitalization of travel sales has become mainstream in China. The convenience of having bookings confirmed within a few seconds, planning your entire trip with a few taps on your smartphones, and (usually) not having to print tickets for traveling has conquered us by storm.

By yearning for travel experiences gleaned from social media and the internet, travelers especially the emerging middle class is more and more traveling to previously unexplored destinations. Mobile platforms, APPs, mini-programs, etc. allow travel sales and agencies to engage with potential clients from the moment they start considering travel until such time that they do purchase the services and further after the completion of the tour package.

Moreover, these days, marketing is not only the sole function and doing of the enterprise. Some social media features allow satisfied clients to spread “word of mouth” while directly identifying the company from which they have availed the travel services.

Regulations related to the travel industry in China

The popularity of travel agencies induces regulating the activities of travel consulting industries. According to State Council Order no. 550, travel agencies must register their establishment at the industry and commerce department and the tourism administrative department. Moreover, according to Article 11 of the said order, a travel agency must uniformly manage its service outlet and not engage in other activities beyond tourist solicitation and consultation.

The “travel agency” refers to a legal person (i.e. an enterprise) that is engaged in such activities such as the following:

  • soliciting, organizing, and receiving tourists;
  • providing tourists with related tourism services;
  • carrying our domestic tourism business;
  • inbound tourism business; or
  • outbound tourism business such as service network (travel agency service outlets) specifically for consultation.

Conclusion

Culture consulting can be very much associated with the travel business. The innovations surrounding travel marketing in the coming months must be centered on new trends such as personalization, segmentation, diversification, and digitalization to be considered current and up-to-date. Moreover, catering to the outbound as well as domestic travel market requires good business operations as well as travel knowledge, to be able to stay afloat in the industry. Having a professional team to guide you through the ups and downs of the industry will benefit your company in China in the long run.

Contact us

S.J. Grand provides advisory on setting up a business in China. We put our competent team at your service to give you the most effective China market entry, due diligence, and tax optimization strategy for foreign-invested enterprises.  Contact us to get you started.

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