outbound

ADVERTISING MONEY CAN BUY!

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?

THE YEAR OF QUALITY TRAVEL?

China Traveller – January 2012

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

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

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

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

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

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

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

Calm Before the Storm

China 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.

Interview with Small Luxury Hotels of the World

China 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.

Interview with Ritz-Carlton’s Regional Sales & Marketing Vice President, Simon Manning

China 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.

Interview with Jumeirah Hotels & Resorts’ David Loiseau

China Traveller

July 2009

Q: Current China operations?

A: Our first China hotel will be located in Shanghai’s Xintiandi, the Covent Garden’s of Shanghai, a great location that is set to be come THE luxury area of Puxi. Pudong is an important area of Shanghai but Xintiandi remains the premier location, as our hotel will in fact be one of the closest to the World Expo Shanghai. We are scheduled to open in early 2010 in time for the Expo and we are already receiving booking requests for the Expo period.

Q: China expansion plans?

A: We are constantly looking for new opportunities in China but we officially have two projects in the pipeline that include Guangzhou and Macau. The Guangzhou property will be smaller in size with 200 rooms and 100 service apartments and is scheduled to open in 2012. Our Macau property is scheduled to open in 2013. Furthermore we are talking to developers in Beijing, Hong Kong, Hangzhou & Sanya to see what other opportunities exist.

We furthermore expect that 30% of our growth will come from Asia going forward and by 2012 we will be the proud guardians of 60 hotels & management agreements in place.

Q: Breakdown of guests by geographical location?

A: In Dubai, where the majority of our hotels & resorts are located at the moment, we have recorded that 25% of guests originate from the UK, 16% from the Middle East, 12% from CIS countries, 9% from Germany, 9% from the US, 7% from Western Europe, 2% from China and 1.5% from Japan.

Q: Jumeirah’s competitive edge?

A: We are privileged in owning the most luxurious property on earth, the Dubai Burj Al Arab. The breakdown of guest staying at the Burj Al Arab includes the UK in 1^st position, 2^nd – CIS countries; 3^rd – Middle East; 4^th – Germany while China commands the 5^th place of most frequent visitors. Part of the reason why the China market has responded so well to our brand is due to Dubai’s excellent branding activities over the past 10 years which has given us great visibility. Secondly, by building an iconic property such as the Burj Al Arab, we have properties that are compared with other iconic marvels of the world such as Paris’ Eiffel Tower, the Sydney Opera House etc. Lastly, at Jumeirah we naturally maintain the highest levels of service which sets us apart from our competitors. Besides the iconic status, location and excellent service, we also employ brilliant branding tactics. For high end Chinese travellers, staying at a Jumeirah hotel lends the individual unparalleled status, an important aspect within the ‘face’ conscious society.

Q: Jumeirah brand recognition in China?

A: In 2007 & 2008 we conducted consumer surveys in China which showed that 16% are now familiar with Jumeirah, up from 9% in 2007. Despite not having a property in China yet we are thus gaining on the luxury market leaders in Asia Pacific. Of those surveyed, 78% said they would consider staying in a Jumeirah hotel while staying in Dubai, London or New York, up from 65% in 2007. Furthermore, 44% or respondents recognise the Jumeirah tagline of ‘Stay different’ while the Jumeirah Burj Al Arab is recognised as the number one property in Dubai. There is great branding strength in the association of Jumeirah and the Burj Al Arab with one in two respondents recognising Burj Al Arab as the most luxurious hotel in the world.

Q: How has Burj Al Arab impacted on the Jumeirah brand?

A: It has been a very important influence on our overall experience. Once people have stayed in the Burj Al Arab they want to see our other properties and experience our other ways of conducting business and providing a unique service. These guests are now forming their own preferences for our different styles.

Q: China branding methods?

A: Brand awareness skyrockets with the establishment of a property in that country. With our property in New York our global US clientele now makes up for 18% as opposed to the previous 4%. Regarding China we are already positioned well globally while for the Asia Pacific region, and China in particular, this is our new target market. We established a sales office in Shanghai in 2008 which focuses on Guangzhou, Shenzhen, Beijing, Shanghai, Shenyang, Chongqing and Dalian. We look first at who are our main B2B clients, build the team and learn about the market. We have started to cooperate with the Dubai Tourism board to educate travel agents targeting 250 of them in Beijing, Shanghai and Guangzhou. We also focus our efforts on expo’s in China such as the current Asia Luxury Travel Mart. Thus our B2B programmes and expo participation are initial steps in China while we avoid a full marketing plan until our first China property is up and running. We furthermore already embarked on Jumeirah road shows in Beijing, Shanghai and Hong Kong exposing partners to all of our products, Guangzhou and Shenzhen will be next.

Q: Branding obstacles?

A: We are experiencing no difficulties in branding Jumeirah in China. The travel industry is very excited about our brand and products. For example, recently Ctrip cooperated with us to conduct a 200 person media training, something very rare for Ctrip to do.

Q: Chinese travellers loyalty to foreign brands?

A: We have 200% year-on-year growth in our loyalty card membership amongst Chinese guests along with 100% growth in revenue for visits. China’s most loyal members visit the Burj Al Arab twice a year. Nevertheless we are conducting further research into this area. By the end of this year we will conduct a survey on ‘How to conduct a dialogue with a Chinese millionaire’, how to talk to them and how they want to be communicated with. We are very curious about this and are willing to try new things. The main difference between Asia and the rest of the world right now is that of ‘face’ and status, and this is something we know we can deliver on.

David Loiseau is Regional Vice President of Sales & Marketing for Asia Pacific.

Interview with Disney USA Parks and Resorts

China 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

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.

South Africa Tourism

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 Cup^TM, 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 Cup^TM. For example, Chinese arrivals to South African reached over 47,000, an annual increase of nearly 13% in 2007.

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…

China Travel Branding

Making Sense of the Chinese Outbound Travel Market

ADVERTISING MONEY CAN BUY!

THE YEAR OF QUALITY TRAVEL?

Calm Before the Storm

Interview with Small Luxury Hotels of the World

Interview with Ritz-Carlton’s Regional Sales & Marketing Vice President, Simon Manning

Interview with Jumeirah Hotels & Resorts’ David Loiseau

Interview with Disney USA Parks and Resorts

Gainers and Losers of 2008’s China Outbound Travel

South Africa Tourism

The China Traveller

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