China Traveller – January 2012

 

Destination Placement in Chinese Movies


The marketing strategy of consumer product placement in film and TV is everything but new and well documented. The most explicit example being Cast Away starring Tom Hanks that was little more than a product placement ad for Wilson, FedEx and Jeep. The placement of destination brands (destination placement) however has without doubt shifted from the subtle to in your face obvious over the past five years. For good reason to as the Mecca for movies, Hollywood, must be without doubt the greatest and most sustained promotional campaign the US could ever hope for in terms of tourism appeal.

 

On the international stage the evidence of increased tourism arrivals to a country following successful box office sales of a movie filmed on their soil is well documented. Lord of the Rings is a classic example of a destination, New Zealand, which reaped the tourism rewards of an internationally popular film. Mindful of the Kiwi’s success, neighbouring Australia, through the Australia Tourism Commission, spent in the region of AUD$40 million to promote the country branding flick Australia staring Nicole Kidman and Hugh Jackman. Pity the movie was such a disappointment. Perhaps an unintentional Australia branding film, The Boys are Back staring Clive Owen, was more effective in portraying the land of Oz as a great holiday destination despite the serious plot. Other examples of films that have generated strong destination branding include Woody Allen’s Vicky Christina Barcelona and Eat Pray Love starring Julia Roberts in a spiritual quest taking her role to Italy, India and Indonesia. The cartoon Madagascar was punted as the movie to improve tourist arrivals to their exotic destination (“daddy, daddy, I want to go to Madagascar to see lions”) but regrettably the financial crisis stopped such hopes dead in their tracks.

 

The exceptionally large cinema viewing audience in China has driven western film producers of late to produce China characteristic, or at the very least China friendly, films. Examples include Kungfu Panda, 2012 and Transformers. Higher international box office sales means more profit for film makers, and with one quarter of the world’s population, currying favour with the Chinese cinema audience is good for business.

 

Enter the country branding industry. With countries being viewed and compared as brands in the same light as traditional consumer products, country branding in China is taking on a whole new significance. With China on the rise to produce 100 million outbound travellers by 2020 it is hardly surprising that a number of destinations have lobbied Chinese film makers to shoot on their lands, but with varying results to date.

 

The Chinese produced film If You Are the One staring Ge You and Shu Qi made Hokkaido, Japan’s second largest island, an instant hit amongst China’s tourists. According to reports the movie was filmed without financial or any other overt support from the Hokkaido tourism department but resulted in significant branding of the destination in China supported by subway billboards city wide depicting the picturesque island to promote the film. Local tour operators subsequently launched If You Are the One tour packages resulting in Chinese outbound travel to the island climbing by 175% between 2007 and 2008 from 26,950 to 47,400 respectively. Air China and Costa Cruises also got in on the action with brand footage in the movie. If You Are the One 2 subsequently featured local Beijing sites including the Great Wall’s Mutianyu, Tanzhe Temple and the artist 798 district. Deputy Director Gu Xiaoyuan of the Beijing Tourism Administration highlighted the fact that their cooperation with the film was an experiment in their marketing strategy. Travel companies like C-trip also cashed in on the movie’s popularity by launching themed tourism products that fans could follow.

 

National tourism bureaus have proven their willingness to provide significant support to film producers with the objective of securing superior coverage of their product in the Chinese market thus far. The Tourism Authority of Thailand for example provided the producers of Go! Lala, Go! starring Xu Jinglei and Huang Lixing, with logistical, food & beverage and accommodation support to shoot on-site at their beach destination of Pattaya. It is estimated that their destination placement cost Thailand less than a million Renminbi. The French region of Bordeaux also benefitted from their destination placement in the Chinese film Eternal Moment starring, again, Xu Jinglei and Li Yapeng. Director and actress Xu Jinglei is without doubt one of the pioneers in the destination placement business also having completed projects in South Africa and serving as Sri Lanka’s Tourism Ambassador.  Her more recent movie, Dear Enemy also included Hong Kong, the UK, Australia and South Africa. It is understood that their tourism promotion bureaus were approached for support but it is unclear how much was received in the end.

 

As for the results of these destination placement efforts, If You Are the One was viewed by nine million Chinese cinema goers and as previously stated resulted in Hokkaido arrivals increase of 175% year-on-year. If You Are the One 2 was viewed by almost 13 million people and was ranked third in China’s top ten box office in 2010. Go! Lala, Go! was viewed by almost four million people while Eternal Moment was viewed by nearly six million viewers at cinema’s in China.

 

While the industry remains in its pioneering stage it is true that some destinations have already benefited from placement in Chinese films. But no country destination to date has reaped the full potential of hosting a Chinese box office winner than has dramatically improved Chinese tourist arrivals to their land like Lord of the Rings did on an international stage for New Zealand tourism. Who will be first?

China Traveller – January 2012

Tour Operator Quality Standards Must Improve In-line With Growing Consumer Expectations


Since China first opened up its outbound tourism market almost three decades ago by awarding Approved Destination Status (ADS) to Hong Kong and Macau in 1983, it seems customers have been complaining about the less enjoyable aspects of group package tours such as “forced shopping”.  With rapidly rising consumer rights in line with rapidly rising disposable incomes on the Mainland, this all came to a head in 2010 when an elderly Mainland gentleman died from a heart attack while on a forced shopping trip in Hong Kong. The Mainland tourism authorities took note.

 

As the only westerner employee in a Beijing company office I had the opportunity to experience a local group tour to Thailand in 2003 first hand, as part of the company’s year end incentive trip.  Having already travelled through Thailand previous on my own I was very much taken aback by the tour’s itinerary, which included numerous random sites of little interest, and other less pleasant aspects such as forced shopping and sex related entertainment to get more money from customers outside of the official itinerary. I also found the tour guides to be unprofessional who spoke about very little other than nonsense.  I have seen exactly the same problems in tour packages of other country destinations that I am familiar with, the inclusion of sites on the itinerary that pale in comparison to others, and a daunting minute by minute schedule that could not possibly allow for a moment of peace and enjoyment.

 

To be fair, it would be disingenuous for most of the group package customers to complain about poor quality products when the price of those packages are taken into account. When one pays just slightly more than the average return flight ticket price for a one week trip to a particular destination, logic dictates that it is too good to be true. Allow me to use my country as an illustration. The average return flight ticket to South Africa is RMB8,000 with Emirates, yet the majority of the one week group packages to South Africa are priced from RMB8,500 – RMB12,000. This form of pricing in the industry is correctly termed as gambling, as the tour operators make close to zero profit on the actual sale of the group package, but rely on commissions from additional spending on items like diamonds and casino gambling (or worse) to make a profit. If the customers buy diamonds they make a profit, if they don’t, the tour operator company makes a loss for the trip. To keep costs down, the tour operator includes random sites that cost little to reach, economical hotels often far away from the CBD or any area with some form of activities, and cheap Chinese meals, begging the question, what’s the point of going at all?

 

Nevertheless, inline with rising consumer rights the China National Tourism Administration (CNTA) launched a pilot project in May 2011 granting for the first time outbound travel business licenses to foreign invested global tour operators with an eye to raising the industry’s standards. The three companies included JTB, AmericanExpress & Europe’s TUI China. TUI China CEO Marcel Schneider is already on public record as saying that their company will not compete on price, previously he was quoted as saying: “I believe that healthy competition will bring benefit to everyone, both companies and consumers alike…a competitive price is attractive, but we don’t want to provide the cheapest product with a low price to the consumer. I believe quality if far more important than quantity. With the higher expectation of travel experience, more and more consumers will chose higher-end in-depth tours in the future.”

 

Considering the Mainland preference for “lively” over quiet, and the fear of travelling unaided due to language and cultural barriers, it is almost impossible to envisage the future death of group travel in favour of the rapidly growing FIT market. But that should not allow for complacency. While the handful of foreign invested tour operators currently have a golden opportunity to show leadership and raise industry standards, they will not be alone as can been seen in the evidence of an almost explosion of local higher-end niche tour operators and travel clubs emerging recently. Clearly a market for high quality and innovative group travel products already exists, so not only has the Mainland tourism authorities taken note, so have Mainland consumers.

 

Local tour operators that adhere to this growing trend will reap the reward of growing market share at the expense of their less innovative competitors, but country destinations remain vulnerable as well as it is their brand that is tarnished along with poor quality tour operator’s. While many country tourism promotion bureaus already promote recommended itineraries and service standards to tour operators within the ADS system, more creative methods will have to be employed to ensure they actually do adopt the recommended itinerary and service standards to protect their brand.

putin1China Traveller

November 2009

 

When I was still at university the buzz at the time was all focused on Samuel P. Huntington’s controversial book The Clash of Civilizations and the Remaking of World Order which created a bit of a stir as few could have anticipated the 911 attacks and the United State’s (supported by Britain) excessive response to not only invade Afghanistan but Saddam Hussein’s Iraq as well, creating the impression that the Christians were on a crusade against the Muslims again, with inevitable hatred generating consequences. Another emerging theory at the time, although less exciting, was that future conflicts would be caused by natural resources, and in particular, water shortages resulting in bad science fiction type movie ‘water wars’.

 

Little did we know as students at the time that in the not so distant future we would personally witness the emergence of a combination of cut throat competition for natural resources and growing nationalist assertiveness with the potential to result in open conflict. Diminishing natural resources around the globe coupled with the economic skyrocketing of the world’s most populous nations (China and India) with an insatiable appetite for the finite supply of resources has already resulted in levels of economic warfare. Renewable resources are the talk of the day but with Eastern and Western nations alike staking their claim in South America and Africa’s resource reserves they are clearly doing more than hedging their bets. The battle lines for other resources have also been drawn including access to finance and a return to human trading, the poaching of the best and the brightest minds to supplement aging societies. Competition for limited resources of all types has dramatically increased over the past two decades creating the perception of a ‘winner takes all’ eventual outcome. Is your country brand perceived to be a winner?

 

Countries today face far stiffer competition when it comes to economic activities such as trade, investment, tourism and recruitment. But although they remain strictly economic prerogatives they are nevertheless unduly influenced by politics, by the nation’s people, a reality that is only expected to strengthen with increased nationalism triggered in turn by the cycle of increased economic competition. Political leaders, and even business leaders to a large degree, seldom take purely economic fundamentals into consideration, we are after all social orientated humans and not efficiency optimizing robots, and as such country branding, the perception of one’s sovereign state, has never been more crucial for survival or success.

 

The recent emergence of sovereign wealth funds (SWF’s) is evidence of the escalation of economic warfare between sovereign nations. While SWF’s are state-owned investment funds normally established by governments with budgetary surpluses, and composed of financial assets with the objective of maximizing long-term return, they have raised national security concerns. Some fear that SWF’s can be utilized to secure strategically important industries for political rather than financial gain resulting in legislation in some countries already requiring prior government approval for significant foreign acquisitions in strategically important companies.

 

Despite China’s progress in the overall rankings of the recently released Country Brand Index, it is clear that the country brand of China is not a particularly trusted one. This has serious implications for its outward economic objectives as seen when the US previously blocked China’s CNOOC from acquiring Unocal. China’s SWF, China Investment Corporation (CIC) has allocated approximately US$66 billion of its total US$200 billion fund for foreign acquisitions while it’s China – Africa Development Fund, with a gradual budget of US$5 billion, will focus mainly on Africa’s natural resources. The non-adherence to local regulations resulting in dangerous and improper working conditions have already resulted in numerous outbreaks of protest by African workers at Chinese managed operations in Africa. It is thus entirely possible for an African government, or its workers, to resist or outright reject Chinese business initiatives based on protest reports emanating from a perception of irregular economic management. Sticking to this example, China would be well advised to clear the ground for their Africa investments through proactive public relations that target the people, as lucrative government to government relations only account for one aspect, governments do after all, change. The same is valid for China’s image in other regions. This is not to say that Africa would necessarily welcome other ‘Africa resources rush’ countries such as America, Britain, France, India and Russia with open arms. Often to the contrary, the West’s historical role in the colonization of Africa and suspicion of renewed paternalist attitudes disguised as human rights has encouraged many an African government to welcome China’s ‘no strings attached’ trade and development.   

 

It has been claimed from different sources that if the entire world’s population consumed as much as America citizens we would require anything from three to four and a half world’s of resources. The per capita GDP rise in previously underdeveloped regions such as South America, Africa and Asia has resulted in an accompanying rise in consumption that environmentalists believe to be unsustainable. Until the world’s leaders and people come to their senses the ability to secure these dwindling resources, facilitated by increased globalisation, will largely depend on the country’s ability to project the perception of being a trusted, valued, even privileged partner.

 

Russia is a textbook example of a brand basket case country that is in dire need of a branding make-over. From its ill considered KGB era speeches that fail to frighten its intended audience, to the corporate raiding in the TNK-BP affair and neo-Nazi attacks on Africans and Asians coupled with police harassment/corruption targeting tourists in Moscow, the country has little going for its brand. And what a pity considering its inability to retain the excellent individuals it produces who excel on the international stage in a country of such vast and untapped nature that could, with a little effort, become one of the world’s top tourist destinations. But while Russia is struggling to survive the global sigh of relief to see George W. Bush vacate the White House accompanied by Obama’s welcomed election to the position of President and, more importantly, Commander-in-Chief, saw the United States successfully claim the first position in 2009’s Country Brand Index, up from 3rd place in 2008. As the world’s largest economy with a history of enshrined property protection, few would doubt America’s trade and investment structure, but it will take more confidence building measures to convince potential travelers that they are welcome in the US again after the multitudes of horror stories emanating from their short sighted airport customs & immigration officials conducting security theatre.

 

Holistic country branding for developing countries will be especially vital to their success as sovereign states as, unlike their brand strong counterparts in North America and Western Europe, who on closer/personal inspection might turn out to be disappointingly inefficient, narrow minded and downright boring, they continue to suffer from negative perceptions and stereotypes as old as the hills. Not every country can excel at every possible economic activity and the onus lies on (especially developing countries) government’s to identify their true niche economic areas of expertise and convey those messages in a sophisticated and sustainable manner to the outside world. The 2009 Country Brand Index has highlighted the yearning for authentic tourist destinations amongst potential travelers as a future trend so countries without competitive modern industries but who are nevertheless endowed with natural beauty and an authentic culture should be at the forefront of branding their tourist offerings.

 

Country branding sub-categories such as trade & investment, tourism and recruitment cannot act in isolation any longer however and must be stringed together under an umbrella country branding strategy. No matter how sensational a beach might appear, or no matter how enticing a business deal might seem, individuals are not going to be triggered into action if they perceive a country to be inhumane, dishonest, dangerous or any one of numerous negative attributes. Many years later the jury is still out on Samuel P. Huntington’s ‘Clash of Civilizations‘ theory, but the verdict is in on countries that are persistently perceived in a light inferior to the reality, their country brand custodians should take note.

 

cape-town-tourism-logo

China Traveller

November 2009

 

Q: Definition of the Chinese traveler for the Cape Town market?

A: To date Chinese tourists to Cape Town have been defined by group tour ADS travellers as well as significantly government delegation group travellers. Due to the predominant group tour nature of their visits they are limited to short stays of one to three days visiting the major attractions like Table Mountain, V&A Waterfront, Cape Point and the Wine Route. A popular part of their itinerary often includes shopping experiences like diamond purchases and Chinese visitors enjoy Cape Town’s offering of seafood. It is important to note that most Chinese visitors still prefer restaurants that specialise in Chinese cuisine. There are very few FIT travellers from China and this combined with the often “rushed” nature of itineraries, limits the overall exposure to Cape Town’s broader offering is limited.

 

Cape Town Tourism has hosted many groups from the Chinese government, business sector and media. We work hand-in-hand with local government in Cape Town to expose delegates to a broader Cape Town experience.

 

Q: Trends you foresee increasing in popularity?

A: There is a general increase in travel amongst the Chinese population, although the immediate trend is towards domestic travel. There are, however, a small increase in the  number of FIT independent travellers who not only have the confidence to travel alone or in smaller personal groups but also relish conducting their own destination research. These individuals travel for longer periods of time, get to see the real vibrancy that we have to offer and ultimately spend significantly more money while on holiday. This is the category of travellers we would like to see grow in popularity. Unfortunately foreign arrivals from China have been impacted by issues such as last year’s Olympic Games, internal disturbances such as the Sichuan earthquake, heightened competition from an increase in ADS countries, and safety concerns related to crime. Much work must be done by SA Tourism to educate and inform the Chinese market on South Africa as a destination. Cape Town Tourism plays a supportive role in this regard.

 

Q: Most recent figures for outbound Chinese travel to Cape Town?

A: While we don’t have specific figures solely for Cape Town the overwhelming majority of Chinese tourists who visit South Africa visit the Mother City. An estimated 37,000 Chinese tourists visited Cape Town in 2008.

 

Q: Breakdown in terms of ADS versus FIT travelers? What are the respective growth rates?

A: The overwhelming majority of Chinese tourists are still on ADS tour packages. More focus should be on attracting the FIT market, but we realize that this will take time and investment in particular media and PR representation to educate the Chinese market on Cape Town as a destination.

 

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

A: The global financial crisis had a negative impact on most long-haul destinations and this was no different for Cape Town. During times of increased hardship or caution the Chinese travelers tend to restrict their travels more to their immediate region of South East Asia. Swine flu naturally impacted travels worldwide, and in particular travel to and from East Asia. To my knowledge it did not have a direct impact on specifically Cape Town as our destination was not perceived as a hot bed for this potential pandemic.

 

Q: Is Cape Town expecting a boost in tourism from China for the FIFA 2010 World Cup?

A: Cape Town looks forward to hosting Chinese tourists attending the FIFA 2010 World Cup South Africa. There seems to be a growing awareness of South Africa hosting this premier sporting event on the Mainland and we get a sense there is growing interest in our destination in particular for Chinese fans privileged enough to travel here. It is a great pity that the Chinese national football team did not qualify for the World Cup that would have potentially resulted in a huge boost of tourism from China. It is difficult to predict, but we do expect a small percentage of Chinese football fans. The hosting of the FIFA 2010 World Cup is naturally an excellent event to leverage in our favour and attract visitors from new markets like China beyond 2010. Our focus is on media, PR and eMarketing to reach as many football fans as possible; inspiring these potential visitors to chose Cape Town as their next travel destination.

 

Q: How would you define brand Cape Town and what does it offer travelers?

A: Cape Town is an iconic world city; boasting incredible natural beauty and authenticity. It is often described as a “soft-landing” into Africa – a surprisingly sophisticated City, but boasting a rich cultural offering that is unlike any other world city.  It has a well-established tourism infrastructure with excellent hotels and restaurants. Cape Town can cater to different needs 365 days a year because the city’s offerings are diverse and plentiful. There are beautiful mountains and forests in which to hike, much-visited landmarks such as Robben Island and Table Mountain as well as endless beaches and natural attractions. There are museums that narrate our tempestuous history and art galleries that interpret our culture. Markets sell local produce and township tours take visitors on safe, guided visits through the Cape’s bustling townships. Another one of Cape Town’s gems is the Cape Winelands; an exquisite part of our city which shows off all the local vineyards, offering guided tours, wine tastings and stops at gourmet restaurants. A visit to Cape Town is filled with history, culture, excellent dining and enough relaxation time to soak up whatever the season has on offer. With the 2010 FIFA World Cup just months away, Cape Town’s infrastructure has been upgraded to offer world class transport and information, ensuring the visitor convenience and ease when moving around.

 

Q: How is brand Cape Town perceived in the China market and who does it target?

A: Although still fairly “unknown” as a destination, Cape Town is perceived in a very positive light by Chinese tourists in the know. Every single Chinese person learns of the Cape of Good Hope when they are in school so the Cape is viewed with mysticism and romance. Cape Town is known to be a very beautiful city with delicious seafood and this is definitely a pull factor for Chinese tourists. Our current target for Chinese tourists is that of ADS tour groups and we have been blessed with a significant amount of such groups arriving on our shores.

 

Q: Which cities compete with brand Cape Town?

A: Most long haul seaside cities compete with brand Cape Town such as Sydney, Rio de Janeiro and San Francisco.

 

Q: Major obstacles to positively brand Cape Town to a Chinese audience?

A: One of our biggest challenges is that Cape Town is very rarely differentiated from the rest of South Africa or even Africa in the eyes of the Chinese tourist. As such what is positive for the total South Africa brand is positive for the Cape Town brand, but it goes the other way as well. Accordingly, if any negative incidents occur in other parts of South Africa or Southern Africa it may well have occurred in Cape Town. Furthermore, the general perception of South Africa is that it is a country inundated with natural wildlife, elephants, lions etc. As such many tourists do not know that Cape Town is a wholly different experience, a vibrant, sophisticated city with world class hospitality infrastructure. Many of the tourists cannot believe their eye’s when they arrive in Cape Town for the first time, they honestly did not expect to find such a thriving and modern city in a spectacular setting. Our job is to educate potential tourists on the reality of what Cape Town has to offer and what differentiates Cape Town from other cities in Southern Africa and the world.

 

Q: What methods/tactics does Cape Town employ to generate better awareness in China?

A: South African Tourism plays a leading role in terms of destination marketing in new source markets such as China. Cape Town works with and supports these activities with the focus on PR, media and guest relations. Accordingly, whenever media and trade FAM tours are arranged we implement the Cape Town part of the itinerary. Recently the City of Cape Town Mayor visited China and while in Beijing he engaged with the leading travel media and held discussions with China’s leading tour operators. We are currently committed to improving and extending relationships with China’s tourism industry stakeholders and key decision makers. This is a lengthy process but we are making good progress. 

 

Q: How does Cape Town plan to leverage the 2010 World Expo Shanghai?

A: The City of Cape Town, along with its fellow South African cities and provinces will be allocated a significant period of time to make use of the South African Pavilion at The Expo. We are currently finalizing our Expo participation plans but will definitely take maximum advantage of the opportunity to show case Cape Town as an ideal ‘Better City, Better Life’ example on earth.

 

Q: Most creative or audacious tactic/ strategy/ campaign employed in China?

A: Cape Town does not promote itself independently from South Africa in China, but work in partnership with SA Tourism and other role-players. Penetrating a new market like China is expensive and a long-term approach is required where we work with key partners both in South Africa and China, focusing on media awareness and educating the Chinese market.  As a “watch-market” China holds tremendous opportunity for our city, but we are aware that it is a complex market to brand oneself in. We are thus cautious in our approach and want to ensure that the essentials are in place before we start attempting audacious campaigns.  

 

Q: New branding strategies becoming more popular over time? 

A: With the advent of time I expect Cape Town to start developing a much stronger online position as that is where the future of this industry lies. The Chinese citizen, in particular, the younger market, is becoming increasingly web-savvy. Working with web-media and platforms we hope to reach this very important and growing market, turning them into future travelers to Cape Town. Continued research and joint marketing agreements with relevant partners in China are essential.

 

Q: How is Cape Town leveraging off its host status of the 2010 FIFA World Cup to attract greater Chinese travellers?

A: As mentioned the promotion of the World Cup is playing a large role in our overall tourism promotions, but with the focus on a long-term marketing strategy that will reach potential visitors and educate new markets on the appeal of Cape Town as a destination. When the Cape Town Mayor was recently in Beijing, we placed great emphasis on the hosting of the World Cup when engaging key stakeholders. From the feedback we have received from the Chinese media and the media coverage we have seen thus far, it is clear that the local media is very interested in this topic and we will continue to focus our efforts on PR and Media.

 

David LiuChina Traveller

October 2009

 

While I am delighted to see Taiwan being awarded with Approved Destination Status (ADS) it appears as if there is little in terms of a concerted effort to promote and attract Mainland travellers to the Island thus far. The granting of ADS was a recent event and as such most stakeholders are still trying to find their feet but complacency over this new tourism ‘hot spot’ should not be permitted.

 

Initial feedback from Mainland travellers who have now had the opportunity to visit Taiwan have not been overwhelming in their praise with some commenting that they were somewhat disappointed by the lack of modern designed cities, saying that the Mainland cities compared more favourably. This to me indicates that a perception error is in place and the Taiwan promoters would do well to highlight the more enjoyable aspects of travelling to Taiwan.

 

This is merely a symptom of a larger issue however that it is essential for Taiwan promoters to define their messages and ensure that they are relevant to the Mainland target audience, the relevant messages must be an extension of Taiwan’s real attractions. So far it seems as if Mainland travellers mostly only visit the orthodox attractions such as Taipei 101. While these are natural itinerary stops, what in my opinion impresses Mainland travellers the most about Taiwan are the numerous alleys in Taipei that host hidden treasures of exquisitely designed restaurants and shops, the juicy and exotic fruits, scrumptious seafood, magnificent night markets and endless restaurants with delicious menu listings. Furthermore, I think Mainlanders are often taken aback by Taiwan’s exhibited friendliness, its greatest hospitality asset. China as a successful developing country has the best of all hardware, but Taiwan has unparalleled software, friendliness and helpfulness that comes from the bottom of the heart. This is Taiwan’s key differentiator and must thus be strongly promoted.

 

The majority of Taiwanese also have misperceptions of China. Many believe that Mainland China is a rural backwater and while this is correct in some areas, it is clear to all who have visited China that the country is so vast that its first and second tier city dwellers can be described as nothing less than cosmopolitan consumers with a taste for the world. China’s outbound tourists are largely consumers with a higher education and are seasoned travellers, as such their expected levels of service are high. 

 

Mainland travellers to Taiwan are not normally first time travellers, by the time they travel to Taiwan they have already experienced the high levels of service competing South East Asian hotels and destinations have on offer. Taiwan must show through its hospitality industry that Mainland travellers are welcome, they have to show their high level of services offerings. Many Taiwan hospitality practitioners ask me what the ’secret’ is to successfully attracting Mainland travellers, but I tell them that it does not exist, it is a myth. One has to invest in order to be successful, you have to invest in PR, marketing, and you have to be consistent. Taiwan did an excellent job enticing Japanese tourists, but now they must start to entice the Mainland tourists, they need to catch up. Frankly speaking, I have not noticed any promotional work of Taiwan yet.

 

For starters Taiwan needs to establish a visible representative office in Beijing as soon as possible for both relationship purposes but also to get a clearer understanding of the local consumer market. B2B engagement and promotions are very important and a good place to start as well.

 

Before your relations with the tour operators are even in place however, one needs to define what messages your destination wishes to carry. The messages must be relevant, colloquial and easy to remember. Furthermore, it is advised to focus a large proportion of your resources on Internet promotional platforms due to its inherent cost effectiveness. This would include titan platforms such as C-trip but also ordinary chat forums and bloggers. Advertising and marketing can be very expensive on the Mainland, much more than in Taiwan, and as such creative online solutions must be employed to get a better return on investment.

 

The Mainland China audience appreciates celebrities so the Taiwan market will be well advised to leverage off such famous spokespersons, thankfully, Taiwan has an inexhaustible supply. 

 

In conclusion, based on my experience Mainland travellers are eager to travel to Taiwan and I am confident that if the appropriate itinerary is provided, it will be as memorable a trip as any other comparison. I am not convinced however that at this moment in time Taiwan is being proactively and appropriately promoted on the Mainland. Taiwan needs to catch up quickly, it is not the only available destination and the current emerging promotional and experiential trend is not an attractive one.

 

David Liu is Managing Director of Weber Shandwick China. Born in Taiwan, David has been working in the Mainland’s public relations industry for the past 10 year. He can be reached at dliu@webershandwick.com

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.

China Traveller

July 2009

 

As China continues to contribute to the enlargement of the world’s high disposable income pool, five star accommodation is becoming par for the course amongst China’s burgeoning elite. Revitalized by this new market that is currently growing in stark contrast to the rest of the world, owners and managers of ‘luxury’ five star hotels and resorts are sparing no effort to attract the generals of opulence.

 

While even group package Chinese tourists have already proven their passion for purchasing luxury products when abroad it is the upper most section of the ladder that the decadent brands are pursuing. For those who have both a before and current view of China’s urban life the targeting of China as a new luxury market will come as no surprise. Previously dominated by RMB1.2 Xiali taxi’s (with exception of the government driven black Audi’s); RMB10 per dish meals; RMB6,000 per/m2 apartments and clothing & accessories not even attempting to replicate international fashion trends, urban China today is virtually another world with stretch limo Hummer’s (not to mention the previously unheard of Sichuan province based company that just bought Hummer!); fantasy restaurant bills under RMB200; RMB30,000 per/m2 apartments and Gucci/ Prada outlets seemingly everywhere. In fact, similar to other newly wealthy countries, China’s growing adjustment to wealth has gone from the sublime to the ridiculous resulting in a situation where it is now almost impossible to order a bottle of champagne in a club without the accompanying sparklers and fanfare screaming ‘look at me, look at me’. Even my favourite burger joint now has a promotion offering Moët & Chandon, seriously…, champagne with a burger?         

 

Make no mistake, China’s new economic elite have serious money and they are happy to depart with a significant amount of it so long as the exercise heightens their social standing, music to the ears of luxury brand marketer’s intent on finding their emotional pressure points. But the challenge of targeting China’s economic elite is everything but child’s play, not only is the market unique due its relative youth but is further compounded by China’s cultural uniqueness long shut off from the rest of the world, which begs the question, how does an international marketer successfully attract the attention of individuals from a historically inward looking society?

 

Those in the best position to target China’s wealthy will not only have a reputed international brand but will also have dedicated operations on the Mainland itself targeting the source of the market. The aggressive entry of the world’s top luxury hotel brands is further depressing an already saturated market for the time being but the backroom planners are well aware that the pure numbers game that only China can produce will save the day in the near to medium future, and result in an enviable brand loyalty along the way essential in attracting a nation that is starting to look outwards.

 

Luxury hotel and resort groups without a China presence will find it more difficult in attracting sustainable Chinese numbers but do have the benefit of utilizing platforms such as the recently held Asia Luxury Travel Mart in Shanghai in addition to other traditional marketing tools. Such establishments might find it challenging to retain the loyalty of Chinese travellers however due to their lack of on-the-ground experience of satisfying particular Chinese clientele requirements, ranging from basic communication, hospitality offerings to cuisine.

 

Contrary to previous fears of Chinese group tour stowaway’s and the accompanied discriminatory visa procedures a number of informed destinations, led by Japan, are changing tack to target this lucrative Chinese luxury market by making provision for FIT visa procedures ensuring that those that have the means no longer have to be accompanied by tour guides and bank embarrassing deposits as a return guarantee. By cooperating with inventive partners such as VISA, who already have all required information of the potential traveller readily available, this trend is set to snowball.               

 

So just how does a luxury brand marketer target China’s economic elite? If looking for a silver bullet you will surely be disappointed as the answer is: ‘by getting back to basics’. Throughout the various interviews conducted on behalf of the China Traveller since its inception I have rarely heard the word ‘research’ mentioned. Dissimilar to the heyday of ADS promotions, the shotgun targeting approach is no longer relevant if brands expect to see a return on investment. Market segmentation, the most basic of marketing concepts in any MBA course or ‘10-Day MBA’ book for that matter, will also have to dig far deeper than the current ‘white collar target audience’ declaration and shed light on the varying preferences held by wealthy consumers based in different geographic locations, different age groups, different gender, different industries, different language abilities and different behavioural segmentation etc.               

 

Every luxury brand on earth will soon be gunning for the Chinese Yuan and if my Google alerts are anything to go by a new luxury hotel or resort seems to be launching every day somewhere on earth, ensuring that the international luxury market will remain a buyers market for the foreseeable future. Unlike the luxury market obligation, Chinese market share will not be served on a silver platter.

Ritz-Carlton LogoChina Traveller

July 2009

 

Q: Average occupancy rates in China?

A: Our occupancy rates are different for different cities. Hainan and Guangzhou are doing very well, in fact Guangzhou is quite unique as it is one of the few luxury five star hotels and we are doing well there. Ritz-Carlton is the fastest growing luxury five star group in China. We currently have six hotels with more than 2200 luxury rooms and 263 club and suite rooms. Some 60-70% of occupancy in our China properties are made up of local Chinese, while up to 80% in second tier cities.

 

Q: How to differentiate from competitors?

A: Firstly, we pride ourselves on our high levels of service and this is really the brand DNA of The Ritz-Carlton. During the financial crisis we did not cut down on staff. Secondly, what we refer to as our ‘Ladies & Gentlemen’, we highly value our internal staff and accordingly have achieved the best employer in Asia and China accolades. Opportunities exist for our Ladies & Gentlemen to move overseas and operate in different environments to improve their skills. This includes our rank and file and is not limited to management. Ritz Carlton is furthermore striving to become the social centre of cities, and we are moving towards that end through not only guests staying with us, but by enjoying our experience through weddings, dinning etc. Through this we are defining and generating loyalty beyond the normal hotel-customer relationship.

 

Q: Define the Ritz Carlton local Chinese clientele?

A: Out of the business travel segment our clientele is made up of local Chinese working for MNC’s, they are usually educated abroad. Our clientele also include SMME owners and a large percentage is also made up of MICE group tours. In the luxury travel segment we have young people between the ages of 23 and 40, children of SMME owners, overseas educated professionals and the generally affluent.

 

Q: Breakdown of Chinese travellers staying at The Ritz-Carlton abroad?

A: We are aware that numerous Chinese travellers stay with The Ritz-Carlton in Los Angeles, San Francisco, New York, Washington and Atlanta. Similar to the States, we also have many Chinese professionals staying at Ritz-Carlton in Europe when visiting their company headquarters. In addition to business travel, we also receive incentive travel groups but these are normally smaller groups, however, the MICE segment is enjoying good growth.

 

Q: How is brand Ritz-Carlton perceived in the China market and who does it target?

A: As the local experience grows our brand increases in stature. Top business persons are very familiar with our brand. As people show their wealth through visible consumer goods, Ritz-Carlton will always do well amongst Chinese people with high disposable incomes.

 

Q: How do your branding activities differ in terms of targeting potential foreign and local clientele?

A: It is different in China as all of our communications with consumers are conducted in Mandarin however, we never translate our Ritz-Carlton logo for any market. We leverage off the European originated ‘legacy of service’ whereby we never show the actual products but instead support our brand with visuals that taps the individual’s emotions. Our local operations are executed in a local friendly manner and we are furthermore proud of our China specific CSM programmes that are unique in the world, such as our Dinning Programme.

 

Q: Major obstacles encountered in China?

A: We only open our hotels when we are 100% ready, and this was something that was very difficult to educate our operators on from the very beginning, by far our biggest operational challenge. Initially we also spent much time on a suitable translation of Ritz-Carlton into Chinese which in the end resulted in a phonetic translation. We never benchmark ourselves to other hotels, we instead benchmark ourselves against other luxury brands. Furthermore, we don’t advertise our restaurant brands as they are secondary to our Ritz-Carlton brand. Other challenges are sometimes of a political nature, such as the visa restrictions that were in place last year during the Beijing Olympics.

 

Q: What methods/tactics does Ritz-Carlton hotels employ to generate better awareness of itself in China?

A: We have clearly defined market segments that we target. For example, out of the total China team we have a dedicated team of 15 professionals focusing exclusively on the business travel market, whilst we have duplicate teams focusing on lifestyle, group travel etc. These efforts are supported by our dedicated PR team and all teams contribute in an integrated manner with goals determined at the centre. All divisions operate as one team and that is our strength.

 

Q: Additional comments?

A: Ritz-Carlton is ahead of its competitors in China with the right deal structures and the right partners, and the best is still to come. Our new properties in China will be our flagship properties, namely the Ritz-Carlton in Pudong which will be the best five star hotel in China, and the new Ritz-Carlton to be launched in Hong Kong is also set to become one of the best hotels in the world which will win all the accolades, set in a phenomenal location, the tallest building in the world, the International Commerce Centre.