China Traveller – January 2012
Tour Operator Quality Standards Must Improve In-line With Growing Consumer Expectations
Since China first opened up its outbo
und 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.
