Calm before the stormChina Traveller

August 2009

 

While health officials continue to caution that H1N1 swine flu remains a serious risk to all nations one would be forgiven for thinking otherwise considering the lax attitude adopted by seemingly all travellers today. The shock of worst case scenario swine flu projections no doubt caused initial self restricting measures but there currently seems to be little dampening effect on regional and international travel due to any health concern.

 

Attitudes towards virus outbreaks seem to have softened a degree since SARS all but obliterated travel in Hong Kong and on the Mainland in 2003. Those who lived in Beijing during the height of 100 people getting infected with SARS per day back then will remember the damaging effects of bringing great swathes of the economy to a grinding halt, especially the travel and leisure industry.

 

Generally speaking, China’s consumers can be described as anything but risk prone adventurers. The government’s stringent measures to prevent an H1N1 epidemic, the multiple temperature measurements before getting out of the airport for all passengers and the strict quarantine of potentially affected passengers spoke volumes of China’s health official’s learning curve since SARS. Furthermore, a number of Chinese tour operators were quick to cancel trips to North America immediately upon the H1N1 outbreak in Mexico reinforcing the nations cautious attitude. China’s outbound tourism industry is still dominated by ADS styled group travel, which by definition is a risk managed form of travel. The consequences of group travel market domination are that cancellations due to perceived risk will be total as opposed to independent travellers who might still weigh up the pro’s (including elements articulated by the destination’s crisis communications team) and con’s individually. This further compounds a potential damaging period for affected destinations.      

 

A number of leading health authorities have started to voice their concern that amid global warming, virus outbreaks similar to SARS and H1N1 will become more routine. While initial outbreaks will result in initial short-term panic, human nature dictates that over time consumers will start to become accustomed to such outbreaks and view such disruptions as unavoidable, yet temporary, inconveniences rather than life threatening pandemics. Assuming that this risk adverse nation, China, can acclimatise to such risks is a very liberal assumption however (especially with the tour operators making the decision), and it will nevertheless result in temporary, yet significant, spikes in travel, creating havoc for the industry.

 

Political instability also serves as an equally strong risk to tourism, of which Thailand must be the textbook example of a great travel destination plagued by divisions that have negatively impacted on tourist arrival numbers. Chinese arrivals to Thailand experienced a significant drop of 38% for the first quarter of 2009 following the protest enforced closure of Bangkok’s main airport last year while the ASEAN summit protests which prevented the free movement of world leaders including President Hu Jintao was sufficient evidence that Thailand remained a destination of choice only if you didn’t mind risk being holed up in an airport or hotel for a few extra days. Since then the Thai authorities have been slowly reclaiming ground through aggressive campaigns and the relaxing of visa restrictions that are already paying dividends. To be sure, Thai authorities are not promising an end to the disruptions, but their strategy of attacking the wallet and ease of use will perhaps shorten consumer’s memories when picking a holiday. 

 

A particular risk when targeting China is furthermore that of bilateral relations political risk. The collective urge to travel to Paris has lost its sparkle somewhat since Parisian demonstrators took it upon themselves to disrupt the Beijing Olympics torch relay through their capital. Even most recently, following Turkey’s Prime Minister’s declaration that the upheavals in Xinjiang could not be described as anything other than a ‘kind of genocide’, the Chinese official diplomatic notes of protest filtered rapidly through to its citizens that under no circumstances was Turkey to be promoted or engaged with inside China so long as bilateral tensions remained in place.

 

The combination of the perception of lack of development and outright personal danger has stifled Chinese outbound travel to numerous regions including the Middle East, Africa and South America. Mexico serves as a good example here where despite its renowned beautiful surroundings the destination is generally avoided by Chinese tourists out of fears for person safety from criminal elements whilst their North American and European counterparts take it more in their stride. While the reporting of a murder in Mexico does make the average Western tourist think twice about a Christmas getaway, the publicised news of a Chinese person being singled out in a criminal act serves as a progressively powerful deterrent.

 

Nothing tests a destination’s crisis communications system more than a wholly unexpected and immediate disaster however. Although the crisis can take on a number of forms, if the cause was man made and the consequence of extreme negligence or latent discrimination (i.e. avoidable) destinations with the appropriate systems in place will without doubt fare better than the unprepared.   

 

Crisis’ of all shapes and sizes catch those in responsible positions either by complete surprise or the magnitude of the crisis is the surprising factor. Either way they will not disappear as a threatening source to the reputation of destination’s we have been tasked to protect, the ‘calm’ we are enjoying right now would be a good time to prepare for the next storm to strike.

Small Luxury Hotels of the World LogoChina Traveller

August 2009

 

Q: China expansion plans?

A: We have noticed an increase in the number of hotel applications from China, which is a reflection of the growing maturity of the market and the subsequent proliferation of luxury boutique hotels across the country. SLH added three Chinese hotels to its 2008 global portfolio and we have already welcomed Han’s Royal Garden in Beijing, Pudi Boutique Hotel in Shanghai and Wuzhen Clubhouse in Tongxiang this year. Our first ski resort in China, Sun Mountain Lodge in Shangzhi, is also scheduled to open this year. This growth demonstrates Small Luxury Hotels of the World’s commitment to China and reflects the high standards of boutique accommodation that is developing across the country. Each of these has added to the breadth and depth of Small Luxury Hotels of the World’s offering in China.

 

Q: Occupancy percentage of outbound travelling Chinese staying at SLH abroad?

A: China is an increasingly important source market for SLH. Demand from Chinese travellers visiting SLH hotels in Europe and the Asia Pacific region is particularly high, whilst a growth in bookings for hotels in the Americas is expected in the next year now the destination has opened up to visitors from China. We have actually already seen a number of bookings for our hotels in the US from the China market. Compared to last year, Spain seems to be an increasingly popular destination for Chinese travellers – as does Bali, Australia and New Zealand. Despite the global economic downturn, revenue from bookings made from China has increased this year. Compared to the same period last year bookings from China have grown by 150 per cent in the first six months of 2009.

 

Q: How is brand SLH perceived in the China market?

A: We are seeing a growth in the number of bookings made through the GDS by travel agents in China. We have worked hard to build our relationships with the trade here – for example, through our attendance at trade shows such as Asia Luxury Travel Market (ALTM). Travel agents know that their clients will only experience the very best when they recommend an SLH property – wherever it is in the world. They trust us and they know they can rely on us to take care of their valued clients.

 

Q: What gives SLH the competitive edge?

A: We were recently awarded top honours for the third year running in the New York-based Luxury Institute’s annual Luxury Brand Status Index survey. SLH was voted number one luxury hotel brand by wealthy consumers beating off 21 other luxury hotel brands, including Ritz- Carlton and Peninsula. No brand is better placed than Small Luxury Hotels of the World to provide our guests with the best of the best. The fact that only five percent of the hotels that apply to join are successful is testament to the high standards we demand. Although our hotels have their own interpretation of luxury, they all subscribe to a single standard of excellence.  Although we are keen to grow, we will never compromise on our strict standards – our reputation depends on it. As well as personalised service, it is really the experiences our hotels offer that set us apart as a brand. From medieval sword fighting, moonlit sleigh rides, bob sledding at 80 miles an hour, exploring the Scottish countryside in a Jaguar E-Type Roadster, a one-to-one Thai cooking class to a private shopping spree in Cartier, the range of experiences is extensive. SLH hotels can also organise behind the scenes tours or opportunities to engage with the local community – for example, tea with the Berbers in Morocco, mingling with the Masaai tribes in Kenya or an overnight stay with a nomadic family in Mongolia.

 

Q: Major obstacles in positively branding yourself in China

A: We have not encountered any major obstacles. We are building the profile of our brand amongst consumers, trade and hoteliers. China is a market which is poised to be one of significant growth for SLH – and we are dedicating the resources necessary to fuel this growth.

 

Q: Outbound Chinese traveler’s loyalty to foreign branded hotels?

A: Traditionally Chinese travellers have been extremely loyal to the large, international hotel brands. However, our brand positioning matches exactly what experienced Chinese travellers are beginning to demand – individuality, memorable experiences and as sense of self-identity.  These discerning travellers do not want cookie-cutter hotels.

 

Q: Methods/tactics to generate better awareness in China?

A: We have an integrated approach to Sales, PR and Marketing. We hold a regular media event in Shanghai which is attended by representatives from our hotels around the world. We also have a presence at the top consumer shows such as Millionaire Fair, Extravaganza Fair, China International Luxury Property Fair and events such as the 9 Dragons Hill Polo Event. We have attended ALTM in Shanghai since the first event three years ago. We support a number of charity events across the region, such as annual charity fundraising event for The British Chamber of Commerce in Shanghai, as part our commitment to responsible tourism – an initiative we call ‘Caring Luxury’. We are also participating in various industry initiatives in-market. I am on the judging panel for the inaugural China Best Design Hotels Awards which are being organised by The Bund.

 

SLH appointed travel industry expert Alison Roberts-Brown as Area Director, Asia Pacific in June 2008. Alison is responsible for overseeing business development, sales, PR, marketing partnerships and stakeholder liaison.

visitscotland-logoChina Traveller

August 2009

 

Q: How would you define the Chinese traveler for the Scotland market?

A: 40% of our travellers from China are made up of business travellers and other short-term travellers. Another large component includes scholars. We receive on average around 10,000 Chinese travellers per year, basically, 10-15% of Chinese travellers who go to the UK travel to Scotland

 

Q: Breakdown in terms of ADS versus FIT travelers?

A: Over the past two years FIT travel has been the emerging trend amongst Chinese travelers, evidence of which can be seen on Ctrip and other online operators. This, FIT, will no doubt be the future trend but it is still early days. A very rough estimate of FIT travel to Scotland puts it at 10% of total Chinese travel.

 

Q: Financial crisis and swine flu impacted on arrivals from China?

A: The biggest impact of the financial crisis is that booking lead times are much shorter now and people are searching for greater value for money. From the China side trips to Scotland have also been delayed as a consequence but it is good news that travel has started to pick up from June. Nevertheless, tour operators continue to search for bargains to kick start stalled operations. Like the rest of the world the UK is not immune to the effect of swine flu, but in terms of outbound travel the US and Mexico have suffered greatly, while Scotland by comparison have not been that badly affected. The UK is very aware of these challenges and taking the threat seriously. 

 

Q: Define brand Scotland?

A: We have a shared industry ambition to grow revenues from tourism by 50 per cent by 2015.  Attracting visitors who want to experience a luxury break in Scotland will be an important element in achieving this goal.  Scotland has much to offer the luxury traveller, from world class five star resort hotels, to Michelin stared restaurants and high quality local produce – all set against a backdrop of vibrant cities and some of the most breathtaking scenery and heritage in Europe.” VisitScotland brand research shows that Scotland has world famous icons such as whisky, tartan, golf and castles along with strong, romantic and rich imagery. The people of Scotland are respected and admired throughout the world but there were issues with the destination being seen as expensive and remote. Emerging from the research were three key words, each representing the Scottish brand: Enduring – The buildings and architecture, history, culture and tradition. Dramatic – Dramatic scenery, beautiful light and the drama of the changing weather. Human – The Scots are seen as down to earth, innovative, solid and dependable, and full of integrity and pride.

 

Q: Golf as a draw card for Chinese tourists?           

A: Due to being the home of golf, St. Andrews, 8% of travelers to the UK include golf as part of their itinerary and the Chinese are showing great interest in this area. Accordingly, our golf operators are working very closely with their Chinese counterparts. Recently, VisitScotland and Connect2Golf launched an amazing opportunity for golfers in China to become Scottish golf club members in the Home of Golf by joining the new Scottish Prestige Golf Club. This includes the opportunity to play at over 30 courses throughout Scotland, from Gleneagles, venue for the 2014 Ryder Cup, to Carnoustie Championship, seven time venue of the British Open, and Turnberry, home of the 2009 British Open, and experience the world’s oldest and best greens and fairways, played on by so many of the world’s greatest golfers. The Scottish Prestige Golf Club has been created for Chinese golfers.

 

Q: Who do you target?

A: While our main target is affluent and well travelled Chinese, business extenders, golf players and repeat travellers to the UK, at the same time we will continue to push for increased ADS business most ADS tours only stop at Edinburgh as part of an eight day tour through the rest of the UK. At VisitScotland we would like to show the other parts of Scotland, especially of the more high end offerings. Accordingly we are working closely with golf operators and our PR key messages include golf as part of our priority target.

 

Q: What methods/tactics to generate better awareness in China?

A: We have engaged in a number of travel trade training activities for the larger tour operators and have also focused on FAM tours that tour operators, travel agents and the media can see for themselves exactly what we have on offer. VisitScotland was the first UK destination to launch a Chinese language agent training website. In terms of creative tactics we have tended to refocus our attention to hosting non-travel trade media. Furthermore we have successfully hosted the ‘Scotland Home of Gold Challenge Day’ in Shanghai in 2006/07. All our efforts are backed-up by annual trade missions to China. Our strategic partner, VisitBritain presents the whole of Britain to the China audience.

 

Poling Lee joined VisitScotland as Trade Promotion Executive in September 2005. She is responsible for identifying markets and developing the trade network in the Middle and Far East markets, in particular in her native China.