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?

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.

 

Magic Cities GermanyChina Traveller

October 2009

 

Q: How would you define the Chinese traveler?

A: It is difficult to define as it is changing in China all the time. Ten years ago most of the Chinese outbound travelers were first time travelers, they would usually travel for two weeks and see 10 counties in one stint. More recently it has changed in that many tourists travel to one destination only. These FIT travelers spend more money, they understand the world of travel and as such do not have unrealistic expectations or demands. Today’s Chinese traveling consumer conducts research before their trip, mostly on the Internet and prefer Chinese language portals. They also trust the comments made in the local online chat rooms.

 

Q: Which trends do you foresee increasing in popularity?

A: Smaller groups traveling for a longer duration is becoming more popular, especially amongst those from Beijing and Shanghai. It also seems Guangzhou travelers understand more about outbound travel than their fellow countrymen due to their proximity to, and influence under, Hong Kong travel agencies. A small minority even prefer to travel with Hong Kong groups.

 

Q: Most recent figures for outbound Chinese travel to Germany?

A: From January to June 2009 there has been an average 11% drop in travel for all the cities we represent. Three cities however posted positive gains including Berlin, Dresden & Hamburg. Berlin in particular is growing in popularity and is becoming Europe’s third most attractive city after Paris and London. Hainan Airline flights to Berlin are supporting this growing trend.

 

Q: Average length of stay for Chinese travelers to Germany?

A: With ADS group travel the average length of stay in Germany is a mere 2-3 days stay. Currently we are negotiating with tour operators to develop mono-destination packages for Germany. Furthermore, Germany is very much encouraging FIT travel. FIT travellers tend to travel for an average of 5-7 days.

 

Q: Breakdown in terms of ADS versus FIT travelers?

A:  It is hard to determine exactly who falls into what categories. To date the majority of travel to Germany is dominated by business travel. For example, an average of 700,000 Chinese travel to Germany annually, of which 60% or more are business travellers. I can estimate that in 2008 we received less than 20,000 ADS tourists, but at the same time that is not a fair reflection as a Schengen visa is easier to apply for in other European consulates.

 

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

A: Swine flu did have a huge impact on arrivals while the financial crisis had an impact on our business travellers who make up the bulk. Lufthansa for example is struggling a little with their business class offerings as are other airlines. Since July of this year however the numbers are starting to pick up and we expect their will be a recovery in the second half of the year.

 

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

A: The overall image of Germany in China as a tourist destination is not so good as it is perceived to be rather industrial with a lack of romance. Next year there will be a big push for FIT travel promotions. In the past tour operator relations were more important but now things are different as almost everyone has ADS. We are thus now starting to look at the end consumer as we believe they must first be knowledgeable of the product before they decide to travel to our destination.

 

Q: Rough geographical breakdown of Chinese arrivals to Germany?

A: Our tourists predominantly come from Beijing, Shanghai, Guangzhou and Hong Kong – but mostly from Beijing. We also conduct promotions however in Chengdu, Chongqing, Shenyang, Hangzhou and Nanjing etc.

 

Q: Which countries compete with brand Germany?

A: French and Italian cities more likely than most to be our competitors whilst Swiss, Austrian and Czech Republic cities compliment our German cities, we are in a great position to cooperate with them.

 

Q: Major obstacles to positively brand Germany to a Chinese audience?

A: Education, education, education! Chinese consumers are generally not aware of how beautiful Germany is.

 

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

A: We are engaging in more interactive type events, more Internet based platforms. For example we are cooperating with the Travel Channel of www.sina.com to highlight our ‘Magic Winter’. It includes a questionnaire with a lucky draw to win a trip to Germany. We are also working with travel agencies to produce more interesting and realistic products. Lastly, we are providing travel agents with the opportunity to conduct online e-learning courses, something that was effectively carried out by Australia and Switzerland.

 

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

A: We will be supporting the efforts of Hamburg House (Euro 6 million investment) which is a sister city of Shanghai. We will also be supporting Dusseldorf with their independent pavilion. No plans to assist the German national pavilion thus far.

 

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

A: As you know Berlin is renown for its great nightlife. Also in the past we would engage in the usual (‘boring’) workshops and seminars. We accordingly broke the mould recently and hosted a party in Beijing and invited 140 journalists, 100 persons from German companies and travel agency representatives who were all entertained by a famous German DJ. We have received great media coverage so far and it was overall a great success. Next year we will include a consumer part which we are very excited about.  

 

China Representative, Zhaohui Li. Ms. Li serves as China Representative to the Magic Cities of Germany which includes Berlin, Cologne, Dresden, Düsseldorf, Frankfurt, Hamburg, Hannover, Leipzig, Munich & Stuttgart.

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.

Disney USA Parks & ResortsChina Traveller

July 2009

 

Q: What offerings does USA Disney have for Chinese travellers?

A: Disney USA Parks and Resorts is new to the China market and accordingly we have different information going out to the travel trade including park maps, recommended attractions, specific programmes in the parks etc. We are also highlighting our Youth Educational Series, which is popular in China so far. We are furthermore looking at how we can offer Chinese meals.

 

Q: What is the year-on-year growth of Chinese nationals visiting?

A: While we don’t disclose specific attendance figures but I can say that our growth in the China market is acceptable under the current circumstances. We look to tourism from China as a growing business opportunity.

 

Q: Do you think Disney Paris limits potential Chinese visitors to USA Disney?

A: Absolutely not. It is important to understand that each of our worldwide parks and resort hotels are different and have their own character and offerings. Not all Chinese who visit Paris visit Disneyland Paris. Visits to Disneyland Paris sometimes compete with many of the other popular itineraries set by tour operators.

 

Q: Do you think Disney Hong Kong has a positive or negative impact of Chinese visitors to USA Disney?

A: It has no impact at all. The USA Disney is the original and therefore is very different from the Hong Kong Disney. Hong Kong Disney is more for short-to-medium haul destination travelers etc.  It is important to understand that we successfully operate Disney Parks in many regions of the world. For example, even though Disneyland Paris is closer to the UK, we still see strong attendance from the UK at our Florida parks. Each experience is different.

 

Q: Profile of the typical Chinese visitor?

A: Our customers come from all over China. Prior to ADS our visitors were mainly older ones of group trips or government delegations. Post – ADS we are attracting more family travel, students and generally white collars.

 

Q: What is the breakdown of Chinese visitors in terms of group travel vs. FIT travelers?

A: At a very rough guess I would say about 80% ADS and 20% FIT travelers.

 

Q: Who is your target audience in China?

A: We are targeting the middle class, ages 30-50. We are currently not engaging in B2C promotions but focusing our energies on training and educating travel agents, how to package and sell our product. Media also plays a big role in this.

 

Q: How is the Disney brand perceived in the Chinese market?

A: As a place for kids. The local market does not know what a theme park actually is whilst the US market naturally understands. Our job is to educate that it is not only for kids, but for adults as well.

 

Q: What type of strategy/ tactics does USA Disney employ to generate a better awareness on the Mainland?

A: We educate and rely on the media to get the correct messages out. We leverage on FAM trips through cooperation with airlines, executive profiling interviews and exhibition participation.

 

Q: What is the most creative campaign USA Disney has ever undertaken to brand itself in China?

A: As we have just entered the China market we rely on cooperating with airlines and tour operators. For example we have hosted theme trips with United Airlines and CITS to offer a 12 day USA tour that included Disney USA Parks and Resorts. The group consisted of over 300 people from all over China for Chinese New Year. The trip was a great success that resulted in loyal future customers. We have also teamed up with Continental and Ctrip’s Elite Traveller magazine that featured Disney in a 30 page article.

 

Q: New media branding? 

A:  We have a fully translated Chinese website with all of Disney’s international information and our 5 global parks. We have new media plans that are to be implemented but until then we will continue to rely on Sohu and Sina cooperation.

 

Q: Additional comments?

A: We have great faith in the China market with all the pent-up excitement that is building u here, a Disney destination for all ages.

 

 Nicky Tang is the Asia Pacific Sales Director for Disney USA Parks and Resorts

Naked Retreats eco-resort in Moganshan, Zhejiang province

Naked Retreats eco-resort in Moganshan, Zhejiang province

 

 

China Traveller

June 2009

 

With the steady maturing of China’s outbound tourism market a number of destination and hospitality brands are banking on the emergence of a growing segment of Chinese travellers now opting to partake in the niche ecotourism market to ensure their continued growth.

 

Despite China’s place as the world’s third largest economy and source of an enlarging pool of consumers with considerable disposable incomes, it is debateable what length of time will be required before a significant number of Chinese tourists start to chose eco-sensitive options, especially when considering the country’s delayed industrial revolution and accompanied level of development in comparison to its developed counterparts.

 

All who have visited China’s famed tourist sites can attest to the hundreds of packed buses offloading thousands of local tourists dashing for the restaurants, souvenir vendors and the obligatory photo opportunities creating everything but a tranquil experience. Even famed natural sites are inundated by these large crowds staying in eye-soaring concrete hotels heaving with activity completely devoid of any selling point other than ‘renao’ (lively). An over simplified presumption of current mass tourism (read: group) as it exists in China could not be further from conservation – it is all about consumption.

 

But evidence has started to emerge that a niche market of ‘back to nature tranquillity seekers’ is starting to emerge. From a personal observation, I never observed any Chinese travellers when trekking in the Thailand jungles five years ago. At that time, Chinese tourists were confined to group tour packages that would not go beyond itineraries packed with multiple sites, activities and shopping stops in a single day. A comparison of the same time with personal trips to neighbouring countries with incentive company outings consisting mainly of local staff members could not produce a more stark contrast. Back then there was an absence of eco-sensitive travel push-pull factors, the tourists themselves, who at that time had limited international travel experience, had little interest in anything other than a destination’s main attractions, while tour operators stood to lose out on the lucrative multiple-stop itineraries that have come to define group travel profitability.    

 

However, over the past two to three years I have observed a growing number of independent group travellers from China who seek a more relaxed and tranquil travel experience when abroad in South East Asia. These groups, usually four to six people consisting of families, couples or friends, are the trailblazers of China’s maturing market who either pick a relaxing spot (e.g. Koh Samui-Thailand) to spend the majority of their holiday, or who travel off the beaten track (e.g. North Luzon-Thailand) seeking the destination’s premier natural landmarks and landscapes. While these trailblazers might not share the same socio-economic status as they range from third-tier city teachers to first-tier city company executives, what unites them is the ability to conduct their own research and develop their own itineraries, the curiosity to dig deeper in alien cultures, the confidence to communicate in a foreign language (English), and the aspiration to travel freely and independently. While all forms of travel cannot avoid consumption, these trips have a far greater emphasis on emotional over material consumption and thus bode well for the emergence of eco-sensitive travel.

  

Before eco-sensitive destinations abroad can realistically expect to attract Chinese tourists it would be prudent to first take a look at the home market. To date China’s domestic tourism market has little to offer in terms of eco-friendly resorts for the simple reason that eco-friendly models are rarely supported and are often hindered by local stakeholders stress on quick profits in a booming economy. This challenge is compounded by the lack of a universally agreed upon definition of ecotourism, a banner that disappoints more often than not – containing only some flora with no supporting sustainable policies whatsoever. Despite high levels of development and environmental consciousness abroad, no international consensus on green tourism standards exists, so it is possible to infer that such standards will not be developed and abided by in China anytime soon.

 

In the absence of local ecotourism options a number of entrepreneurs have taken the initiative to fill the void and respond to a potentially lucrative domestic market. One such example is Naked Retreats which operates a boutique eco-resort in the pristine bamboo forest of Moganshan (Zhejiang province). Commenting on the growth of sustainable tourism in China, Naked Retreats Chairman Grant Horsfield says: ‘In many cases the term is misused by the tourism and hospitality industries which often use the term ’sustainable’ for their marketing purposes…a good example of how you notice the increase in this form of tourism in China is the rapid increase in outdoor environmental clubs, but once again, these clubs are not necessarily doing anything environmental. The most important element of eco-friendly and sustainable tourism is how the local communities are benefiting. This is still small in China.” He further added that there “was absolute evidence of growth in sustainable tourism in China but that it is still in its early stages because of the lack of real understanding of what eco-friendly and sustainable tourism actually means.”

 

 

Entrepreneurs have taken note of the gap in China, more established brands in the eco-sensitive realm such as Banyan Tree (See ‘Interview with Banyan Tree’s Claire Chiang’) can expect a two-fold result, near term profitability for local properties and medium to long-term brand loyalty development for properties abroad, operations of which are all guided by the company’s triple bottom line (economy, society and environment). Claire Chiang, senior vice president of Banyan Tree Holdings, has observed that: “today’s Chinese traveller is seeking rewarding travel experiences and cultural exploration, as opposed to previously when the interest was largely to accumulate as many travel destinations as possible”, and considering that the majority of Banyan Tree’s clientele at properties in China are of local origin and the fact that they enjoy a hospitality experience that abides by eco-sensitive practices, it has a net positive effect on nurturing this new market.   

 

While numerous country destinations are also set to profit from the emergence of this niche market and leading the charge is New Zealand with its 100% Pure New Zealand global campaign (See ‘Interview with Tourism New Zealand’s Asia regional manager, Mark Frood‘). Asked if he had observed any evidence of Chinese interest in sustainable tourism, Mark Frood stated: “Yes, Chinese are more and more interested, this is what we are about. Taking photos of glaciers, taking these natural wonder photos by themselves, it is a statement of freedom.”

 

Thus in anticipation of the maturing of the Chinese outbound market accompanied by a shift in emphasis of quality over quantity in the near to medium future, a number of destinations and hospitality brands have already adjusted their strategies to profit from the most lucrative potential of China’s future tourism: longer stays, higher spending, return customers in search of something more authentic as well as tranquillity and exclusivity.

 

The very nature of sustainable tourism implies exclusivity as an environmental protected and conservation area by definition cannot host hordes of tourists at one time due to the damaging effect on the environment. Accordingly, destinations that effectively implement sustainable tourism strategies will be the recipients of the most sought after economically blessed tourists.