Interview with Beijing Regent Hotel

Beijing Regent Hotel Manager Scott Walton on Beijing’s challenging

Beijing Regent Hotel Manager Scott Walton on Beijing’s challenging hospitality industry

 

China Traveller

May 2009

 

The Beijing 2008 Olympics have come and gone, the global financial crisis has started to make its impact on China’s inbound travel sector, swine flu is creating further market panic, while new five star hotels continue to be rolled out throughout China’s capital.

 

Scott Walton, Hotel Manager of the Beijing Regent Hotel, took some time from his busy schedule to discuss with the China Traveller the challenges faced by premier hotels in Beijing and how his team is going about tackling them.  

 

Q: Average occupancy rates?

A: 2008 was our second year of operation, this was an excellent year primarily due to the Olympic boost. The only problems we experienced were pre and post Olympic due to problematic visa issues affecting the market. On average we experienced a 50% occupancy rate for 2008, while we estimated a 60% occupancy. For the first two months of 2009, our low season, we recorded 35-45% occupancies while for March, which is supposed to experience an increase, recorded roughly 43% occupancy. Our more established competitors have registered slightly higher than that, but the Regent Beijing is gaining in market share.

 

Q: Local/foreign guest occupancy ratio?

A: In 2008 the ratio was 52% Asian and 48% Western. Of the Asian segment, 50% were local Chinese, 25% Hong Kong Chinese and the remainder from the rest of Asia. In 2009 thus far, 60% account for the Asian segment as the US and European markets decline.

 

Q: How would you define the Chinese hotel guest?

A: Our local hotel guests are refined with extremely high expectations, they are very good at communicating those expectations to us. The Regent Beijing conducts much local business and our guests tend to be from the upper echelons of society including i) upper-end income earners in Beijing; ii) government business (Beijing, and other 1st and 2nd tier city government employees); iii) and a great number of Hong Kong Chinese. We are proactively targeting more 2nd and 3rd tier city customers with higher disposable incomes.

 

Q: What are the major obstacles to positively brand Regent Beijing amongst a local audience?

A: An essential obstacle is that international hotels are still not as widely known in the local market. We have found that we had to re-define ourselves after the Olympics and to that end we are exploring the services of specialist PR companies to assist us target the local market and other avenues.

 

Q: What measures are you taking to combat the slowing global economy?

A: We recently employed a new director of sales and marketing with tremendous pedigree. As the Beijing pie has shrunk with a growing inventory and while the Beijing tourism authorities are pushing hard to increase demand the market will remain a challenge for some time. Accordingly the Regent Beijing is making greater efforts to look after its existing client base and we are sparing no efforts to train, train and re-train our staff. Furthermore the Regent Beijing is looking to explore non-traditional markets and keep long term relationships strong.

 

Q: What methods/tactics does Regent Hotels employ to generate better awareness in China?

A: We are looking to partner with an internationally recognised PR company who are specialists in the local market. Internally we do conduct our own target marketing using CRM databases and we furthermore target the local F&B market with using a dinning card which proves to be popular and successful in Beijing.

 

Q: Are there any new branding strategies you would highlight as becoming more popular over time?  

A: We are leveraging more from our owners prominence in Beijing and China, Madam Chen Laiwa, and her reputation in the music and art world. Accordingly we push for art features in the local and foreign media focusing on art work displayed in the hotel.

May 26th, 2009 | Michael Jones | Tags: , , , , , , , , , , , , , , | No Comments »

Heightened Competition With Dwindling Resources Requires a Strategic Shift

China Traveller

April 2009

 

As the global financial crisis deepens in North America and Europe with no end in sight, it is expected that some of the more prudent tourism destinations will be redoubling their promotional activities in markets with the ability to evade the worst of the downturn. The fact that marketing budgets have been decreased in light of the crisis however alludes to the catch 22 situation that many marketers find themselves in. China in particular matches this description with senior tourism officials confident of continued outbound travel growth throughout 2009, yet the strengthening of the Renminbi, coupled with crisis induced slashed budgets, over the past few years has equally resulted in decreased marketing budgets.

 

The unique environment within which we find ourselves has forced marketers in China to raise the bar on creativity, to achieve better results on the back of fewer resources. While few crisis driven tailor made campaigns are immediately recognisable, creative campaigns born out of intensified competitiveness are and should serve as lighthouses in a sea of new strategies.                

 

Celebrity Endorsement: Celebrity endorsement of destinations is becoming an important tool in the overall promotional kit. The increase in celebrity endorsement promotions in the local consumer industry is indicative that such tactics resonate with the Chinese audience. While a standard tactic in general consumer PR in China, with hindsight it is surprising that celebrity endorsements have not featured more in the promotion of destinations. A creative example includes Jamaica’s inclusion of China’s father of rock, Cui Jian, in a recent FAM tour. Furthermore, in 2008 the Canada Tourism Commission included ice skating celebrities Shen Xue and Zhao Hongbo in their promotions, a strategic step that will go a long way in the run-up to the 2010 Vancouver Winter Olympic Games. For her part, Chinese actress/director and at the time world number one blogger Xu Jinglei was invited to South Africa to view and report on the country’s highlights leveraging on her popular online platform. Upon her return Ms. Xu published an English language learning guide filled with pictures of herself set against a South African backdrop and locally relevant dialogues, the book quickly entered the top ten best sellers list in Shanghai.

 

Blockbuster Films & Music Video’s: Mindful of the positive influence the blockbuster hit Lord of the Rings had on New Zealand’s tourism, the Australia Tourism Commission spent in the region of AUD$40 million on the promotion of Australia staring Nicole Kidman and Hugh Jackman. While strategically sound in theory to splash out on such visible promotions, the strategy clearly went astray as the final product did not live up to expectations. From local viewers the author spoke to, it appears that Vicky Cristina Barcelona proved to have a stronger pull factor to Spain than Australia achieved, a frustrating point considering it was probably not one of Woody Allen’s objectives. A number of destinations have lobbied Chinese film makers to shoot on their soil, some with varying yet limited results, but it will be interesting to see which destination manages to host the production of a Chinese blockbuster hit that will have a direct impact on their Chinese travel arrivals. Chinese music video producers are on the same track, seeking new and exciting natural backdrops that will blow their audience away.    

 

Maximising Resources Online: Few would disagree that the Queensland Tourism Authority’s ‘Best Job in the World’ campaign was other than utter genius. With almost 35,000 applicants around the world promoting their video’s amongst their friends resulting in enormous online and off-line buzz, it is difficult to think of a more creative campaign. The campaign has clearly resonated with the Chinese audience with Clare Wang wining the wild card vote with three times the votes of her closest competitor. Destinations would do well to take a feather out of Queensland’s hat and tailor make similar campaigns for the China audience.

 

There are also a number of online consumer PR tactics that have yet to migrate to travel & tourism PR agencies in China. Social networking platforms such as Chinese versions of Facebook employed to promoted consumer products and services, viral games development, and the production and posting of online specific video’s have been developed to great effect in other industries thus far. Most destinations to date have also ignored what is being said about them on local bbs (Bulletin Board System) sites (the infamous Chinese Internet chat rooms) relying merely on traditional media monitoring. Monitoring and positively influencing bbs sites has proven to be both an economical and effective strategy for consumer products as it is difficult to find a more interactive platform in the virtual world we live in. Reacting at the eleventh hour to damaging bbs chatter in a time of crisis is simply no longer an option. 

 

Lastly, a mix of traditional and new tactics are also on the cards. A growing number of countries have already sent influential Mainland bloggers on FAM tours to their countries with great effect. Recently a single Chinese tourism beat blogger on invitation in South Africa posted numerous articles that received over a million hits amongst travel enthusiasts as well as hundreds of positive comments and requests for additional information. Such tactics strike at the heart of the target audience and permit for the necessary interactivity that is an effective builder of emotional bonds with your brand.

 

As the Chinese consumer market advances in maturity destinations and travel organisations will be required to embrace increasingly sophisticated strategies to maintain and/or increase competitive market share. Coupled with China’s unique economic strength the financial crisis has added impetus to the need to rethink strategies in China’s travel & tourism industry.

May 21st, 2009 | Michael Jones | Tags: , , , , , , , , , , , , , , , , , | No Comments »

Gainers and Losers of 2008’s China Outbound Travel

China Traveller

March 2009

 

With damaging storms, upheaval in Tibet, the Sichuan earthquake and the hosting of the Beijing Olympics, 2008 was expected to be an unassuming year for Chinese outbound travel. Initial figures collected from China’s exit ports however indicate that despite all the herculean challenges met, outbound growth remained surprisingly robust for most regions.

 

With the exception of troubled Thailand, South East Asian countries benefited significantly with overall high growth rates while Europe almost universally suffered under a cloud of downturn pessimism (complete table of figures on data page, pg. 7). Growth rates were also reversed in a number of African and Latin American countries, a serious issue of concern for developing countries reliant on foreign arrivals for job creation.

 

No surprise in that Hong Kong remains the most popular destination with over 17 million Mainland travellers visiting the Special Administrative Region in 2008, closely followed by Macau with over 15 million arrivals. Neighbouring Japan remains the global destination of choice for Chinese travellers receiving 1.55 million persons at a growth rate of 6.8% over 2007. Vietnam was the second largest recipient of Chinese visitors with 1.45 million at a whopping 58% growth over 2007. It is interesting to note the disparity in figures between China and Vietnam as destination itself only recorded 650,000 visitors. The disparity can been explained due to Vietnam sharing a border with China, a consequence of which Chinese figures include local border day trips, with the Chinese persons returning on the same day, whilst Vietnamese figures only include over night stay.   

 

The order of remaining neighbouring countries with the highest Chinese arrivals include: Korea in third place (1.34 million); Singapore surpasses Thailand for fourth place with 713,000 arrivals; Thailand (624,000); Malaysia (623,000); Taiwan replaces Indonesia for seventh place (279,000); Indonesia received 248,000 arrivals on the back of impressive 46% growth over 2007 while the Philippines came in last with 163,000 arrivals on negligible 1.7% growth.

 

Travellers to Australia continued to grow at 3.7% resulting in 413,000 arrivals. Australian tourism figures also reflect lower numbers than China’s (356,400) which is partially explained by China’s numbers including all types of travellers (business, students, relative visits etc.) as opposed to pure tourism figures. New Zealand received 73,000 visitors at a growth of 7.7% over 2007. The United States, taking advantage of its fairly recent ADS (Approved Destination Status) status surged ahead with 775,000 arrivals, 8.5% growth on 2007 figures, while Canada almost reported zero growth resulting in 230,000 visitors.

 

With the exception of Russia (790,000 visitors at 7.2% growth over 2007) Europe performed poorly with Germany recording 253,000 visitors, a decline of 6.9%. The UK received 234,000 visitors (decline of 1.4% over 2007) while arrivals to France declined by 5.9% over 2007 resulting in 202,000 arrivals. The blanket drop in European arrivals has a number of influencing factors. Firstly, the number of natural calamities to hit China in 2008, along with the hosting of the Beijing Olympics, was always going to have the greatest impact on long haul destinations, and with Europe being the greatest recipient of Chinese outbound travel for so many years it was natural that for them to feel the greatest pinch. Canada, another long haul destination, as previously mentioned also reported near zero growth but the United States avoided the same fate due to its stronger business and student exchange relations with China as well as its newly acquired ADS status. Fearing illegal immigration, Europe also raised the bar on visa requirements for Chinese travellers that clearly had a direct relationship on the drop in tourist numbers. Lastly, the now infamous Olympic torch relay spectacle that occurred in Paris, protests in the UK compounded by the German Chancellor meeting with the Dalai Lama in the wake of unrest in Tibet galvanised potential Chinese tourists into an anti-Europe group.   

 

Brazil also received less visitors than in 2007 with a decline of 1.2% resulting in 23,000 visitors but the country to suffer the steepest decline in arrivals according to available information is 2010 FIFA World Cup host South Africa attracting a mere 34,000 Chinese visitors, a decline of 13.5%. In the Middle East the UAE registered robust growth of 19.8% totalling 118,000 visitors.   

 

Comparing the available Chinese figures with the actual destination arrival figures however, it becomes clear yet again the discrepancies that exist due to a number of reasons including the infamous Hong Kong/Macau factor as well as the fact that many Chinese travellers concurrently visit multiple destinations, the second and third stop, or more, of which are not reported at exit ports. Taiwan reported an additional 50,000 arrivals, while Singapore registered over 300,000 more Chinese visitors. Thailand reported an additional 150,000 plus visitors while Turkey and New Zealand reported an impressive 35,000 (more than double the Chinese figures) and 37,000 additional arrivals respectively. As allured to above, Hong Kong in particular and Macau account for much of these discrepancies serving as a hub for transferring flights.

May 19th, 2009 | Michael Jones | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , | No Comments »

Interview With Tourism Authority of Thailand

 

 

Amnuay Thiamkeerakul, Tourism Authority of Thailand's China Director, the helmsman leading his brand out of the storm

Amnuay Thiamkeerakul, Tourism Authority of Thailand's China Director, the helmsman leading his brand out of the storm

 

China Traveller

March 2009

 

Q: How would you define China’s outbound travel industry at the beginning of 2009?

A: China’s outbound travel industry has been affected by the global financial crisis, but not seriously. Outbound travelers are still willing and able to go on leisure tours and companies still need to attend MICE related events, and lucky for us, Thailand is still the perfect choice for these types of travelers.

 

Q: How would you define the Chinese traveller?

A: The Chinese traveler comes from the nation’s developed urban centers and is motivated to go abroad for different reasons – leisure, business and so on. They want to go experience destinations that offer a wealth of tourism resources, such as natural beauty, fun activities, great food and more. There is good growth in FIT travelers now and while Europe and the US were very attractive, due to the current situation many are choosing to travel to neighboring countries more. Furthermore, where more high end travelers also used to favor the West more, many come of the high end segment travel to Thailand to stay in resorts, play golf, go to the spa’s and enjoy our unique cuisine.

 

Q: What sorts of trends have emerged among Chinese travellers and which ones do you foresee increasing in popularity?

A: With current outbound travel just under 50 million a year, and a potential outbound travel market of over 250 million, the most important trend to take note of is growth. China’s enormous potential translates into enormous hope in the industry.

 

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

A: In a word: ‘Amazing’. We offer an amazing portfolio at an amazing value, lending on our tagline for 2009 ‘Amazing Thailand, Amazing Value’. While our destination is great value for money, we have nevertheless suggested to some tour operators to raise package prices to more reason levels that all those visiting will have a better experience. Thailand as a destination was opened-up by European backpackers almost thirty years ago, and while we will always welcome all people to Thailand, few countries have the wide variety of offering we have. We furthermore brand extensively in the luxury market. We have something for everyone to enjoy Thailand and as such, stand as a comprehensive brand.  

 

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

A: Brand Thailand enjoys a high level of positive awareness in the China market. We are known for our hospitality, rich culture, delicious cuisine and beautiful scenery, all of which can be enjoyed at a great value given our proximity and easy connection to China’s major cities, which is where we focus our targeting – Beijing area, Shanghai area, Guangzhou area and the Chengdu/Kunming area.

 

Q: What is the rough breakdown of Chinese arrivals to Thailand, which provinces/cities do travelers predominantly come from?

A: Arrivals stand at around 1,000,000 and are drawn from the all over China, namely the Beijing (25%), Shanghai (25%), Guangzhou (25%) and the rest of China (25%).

 

Q: What countries compete with brand Thailand?

A: China’s travel markets, both domestic and outbound, are immense. With such large outbound figures and such great potential to grow those figures, countries don’t compete – we promote. We promote in a market that’s far from saturated… In fact, if I had to name a competitor I’d say it’s China’s domestic travel market, that’s a market I want a piece of. There is also a new generation of FIT travelers who speak English, more independent minded, that now make up 25% of our arrivals. We also have high repeat visit rates in both lower and higher income segments.

 

Q: What are the major obstacles Thailand has encountered during its quest to positively brand itself in front of a Chinese audience?

A: The recent political unrest has been our biggest obstacle. The travel sector is key to the Thai economy, and we’re currently working to show would be travelers that Thailand is a perfectly safe destination.  We are doing this by inviting the media to Thailand to see, first hand, that we still have the same friendly people and beautiful scenery as we always have. We have also taken concrete steps such as placing a waiver on visa fees from March until June for many countries including China.

 

Q: What successes has brand Thailand gained in the China market and what drove them?

A: In 1988 Thailand became the third nation to gain ADS status after Hong Kong and Macau. This has given us a long history of travel exchange and cultural ties which contributes greatly to the success of brand Thailand in China.

 

Q: How to combat the slowing global economy?

A: We’ve waved visa fees through to the 5th of June, which when combined with low airfares, makes a tour to Thailand extremely attractive. We will also continue to remind domestic travelers of Thailand’s amazing value.

May 18th, 2009 | Michael Jones | Tags: , , , , , , , , , , , | No Comments »

South Africa Tourism

 

Leveraging the ultimate branding trump card, the 2010 FIFA World Cup South Africa

Leveraging the ultimate branding trump card, the 2010 FIFA World Cup South Africa

China Traveller

January, 2009

 

The Republic of South Africa is more than a nation of nearly 50 million people with an area of over 1.2 million km², the nation is a brand, and the task of managing this brand falls on Ms. Tracy Qi, acting country manager for the tourism section of the South African Embassy in Beijing. A local Beijinger, Tracy has been with the Embassy since 2005 and has since become an expert on the South African brand. During a recent interview in her South Africa-themed office in the Embassy, we had the opportunity to learn about this brand and it’s standing in the China outbound tourism market.

 

Q: How would you define China’s outbound travel industry in 2008?

A: China’s outbound travel was marked by many ups and downs in 2008, but in the end, it was a good year that left us and the whole industry optimistic for the future. For South Africa, international arrivals continued to grow, although growth rates were down from around 12% at the beginning of the year to around 6% right now. There are many reasons for this slight decline, the Olympic Games for example, but we expect full recovery – the Chinese market is very resilient.

 

Q: How would you define the Chinese traveler?

A: Travelers from China are quite different from those in other markets. They try to follow their palates, which are as diversified as the many types of cuisine in this country. In other words, they need choices, and lots of them. Travelers from China are also concerned about the quality of services like accommodation, transportation and tour guiding, etcetera. They also have the habit of travelling with lots of cash, which isn’t such a good idea.

 

Q: What effects, if any, has the global economic downturn had on the tourism industry?

A: The turmoil that hit financial markets in the third quarter of the year has taken its toll on both the global and South African travel industries. Along with other occurrences like the Beijing Olympic Games, it has seen growth of foreign arrivals to South Africa slow markedly. Fortunately, South Africa enjoys the benefit of excellent foreign exchange rates for tourists and this has given the destination an enviable level of affordability when compared to other country brands and makes the nation an extremely attractive option for those who still want to travel during difficult times or insist on excellent value for money.

 

Q: What sorts of trends have emerged among Chinese travelers and which ones do you foresee increasing in popularity?

A: A growing number of Chinese travelers are using the internet as their favorite tool to learn about destinations, accommodation, air tickets and itinerary packages. South African Tourism has noted this trend and will invest significantly in this area in 2009.

 

Q: How would you define brand South Africa and what does it offer travelers?

A: South Africa is a very unique brand. It not only offers tourists scenic beauty, local culture, wildlife and adventure, but also luxury travel services and great value. South Africa also enjoys the benefit of being host to the FIFA 2010 World CupTM, an event that attracts hundreds of thousands of visitors and that is set to bring unprecedented publicity to South Africa over the next 18 to 24 months. In the run up to this event, we are working to make FIT visas available later this year and will be offering special event visas for 2010. For more information, just contact the South African Embassy.

 

Q: How is brand South Africa perceived in the China market?

A: People in China think South Africa is very far away and that a tour to the country would cost quite a lot of money. Some people also think that South Africa isn’t the safest of destinations. All of these perceptions are not quite true. South Africa is no further than the US in terms of flight hours, and South Africa enjoys the benefit of excellent foreign exchange rates, in fact, the New York Times named South Africa the second most US$ friendly destination on earth late last year. As for safety, travelers to South Africa  should be careful when deciding where and when they tour certain locations, just as they should when travelling to any foreign country.

 

Q: What countries compete with brand South Africa?

A:  Our competitors could be said to include Australia, Egypt, Turkey, Italy, Kenya and New Zealand because these countries provide similar activities and attractions at comparable costs and distances. But some of these brands are our ‘cooperative competitors’, like Egypt and Kenya, due to tour packages which bring tour groups to two or more destinations in Africa rather than just one.

 

Q: What successes has brand South Africa gained in the China market and what drove them?

A: The biggest single success for the brand’s marketing efforts in China was the signing of the ADS agreement in 2003. And now, even though awareness of South Africa in China is still low, it’s rising steadily during the run up to the upcoming 2010 FIFA World CupTM. For example, Chinese arrivals to South African reached over 47,000, an annual increase of nearly 13% in 2007.

May 15th, 2009 | Michael Jones | Tags: , , , , , , , | No Comments »

The China Traveller

Travel

Since my parents took my sister and me on a long road-trip holiday to Durban at the age of five, I have been hooked on traveling. Sure, there were times where my sister and I were pulling each others hair out while isolated from our parents on the back of the bakkie (pick-up truck) but the freedom from routine daily life and the exposure to everything new, new sights, new food, new culture, new friends etc., made it extremely memorable.  

The first time I flew on an airplane was when I was 17 years old, on a direct flight from Cape Town to London where my friends and I worked arbitrary jobs for a year with the objective to travel the world. Some were more successful in meeting the objective than others but the foundation for a life of travel was established with snowboarding trips to Scotland, visits to European cities and a tour of 100% pure adventure to Pamplona for the running of the bulls in northern Spain.

It was during my travels as a university student that I first started to consider the impact that tourism as an industry has on the development of communities. The positive, developmental role was made crystal clear to me while travelling on a shoestring with the closest of friends to neighbouring Namibia and the Xhosa tribal lands of Transkei on South Africa’s east coast. The rural areas we travelled to had been completely overlooked by other commercial planning and its was inspirational to witness how these economically less fortunate communities benefitted from travellers who could hardly be described as wealthy. Since those days I have always tried to observe and analyse internally the impact that tourism has on the socio-economic development of communities. I am a strong believer that few industries nurture innate entrepreneurism at the community level better than tourism does. It not only gives dignity to disadvantaged individuals in the form of employment, but truly empowers families, clans, villages, towns and cities like no other.  

Having lived in Beijing for over seven years I have had the enviable opportunity of using China as a springboard to travel to a multitude of near and neighbouring countries in addition to domestic China itself and have found the same spirit of entrepreneurism and social improvement throughout.

My career in the communications industry started in 2003 when the Managing Director of Weber Shandwick China, no doubt pitying me, offered me an internship, and some time later we landed our first travel destination client, The Bahamas. The passion of my personal life and my career finally collided and merged. Through my career I have been increasingly exposed to the role that upper end tourism plays on communities when large scale hotel & resort developments are established creating stable employment and nurturing advanced service training for larger numbers of local people’s. If implemented with a sensitivity to the environment and the local community’s social fabric, there can be no denying the beneficial influence these investments have for a country.     

Over the years, by travelling to south-east Asian countries with my adventurous wife during China’s golden week holidays I have also had the opportunity to engage with and observe China’s growing outbound travellers. Watching them transform into a more mature market of travellers has been fascinating, especially when viewed in tandem with the other great consumer changes tearing up the past.

But why do I find China’s outbound travel & tourism so fascinating? Above and beyond the stellar growth that this particular industry is experiencing in a time of decline across the mature markets board, which should be sufficient reason, China’s outbound travel market is one of the few vehicles through which countries can narrow their trade deficits with China. The number of countries which have a trade surplus with China is limited to a handful of oil exporting and hi-tech nations and while the onus lies with trade deficit countries to modernise their economies, the reality is that few have the capacity to do so, especially developing countries lacking economies of scale.

Thankfully, after decades of being closed to the world, Chinese consumers are not only curious of foreign cultures but put their money where their mouth is and travel a considerable amount. The world is now their oyster and they do not seem to discriminate in terms of destination (so long as the destination is not too unsafe) or class of travel (from backpackers to 7 star hotels). In a nutshell, their interest to travel is there and the numbers will continue to experience significant growth so long as China’s economy continues to prosper, the only challenge that exists however is the competitive landscape of destinations and brands battling it out for China’s outbound travel market share, something that will only intensify with time, and this is were my job begins…

May 10th, 2009 | Michael Jones | Tags: , , , , | No Comments »
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