Issue #120 - What Did We Really Learn from China's October Golden Week Holiday?
5 takeaways combining Chinese domestic and outbound travel.
Welcome to issue 120 of Asia Travel Re:Set.
“What are your predictions for the next 2-5 years in Asian tourism?”
That question was posed to me during Indonesia’s 2023 Tourism & Creative Economy Forum in Jakarta. It’s tricky to answer. The deep-rooted regional impacts of Covid advise us against making predictions. And the tailwinds are enduring.
Which brings us to China, where pandemic travel isolation lasted the longest. China’s outbound recovery “Remains a big unknown factor,” said Jesper Palmqvist, Senior Director Asia Pacific of STR, on The South East Asia Travel Show.
It’s hard to argue - particularly after October Golden Week, which delivered big in China but underwhelmed in South East Asian markets.
So let’s follow that train of thought…
Thanks for checking-in.
- “IN THE NEWS”
- What Did We Really Learn From China's October Golden Week Holiday?
5 takeaways combining Chinese domestic and outbound travel.
- AI, OTAs, Payments & Ancillary Revenues for Independent Hotels
In conversation with Vikram Malhi of Singapore-based Zuzu Hospitality.
“IN THE NEWS”
So... you wake up for a scheduled early-morning interview on BBC News with Arunoday Mukharji to discuss the tourism outlook in China following the October Golden Week. Except, the global news agenda has shifted considerably ... and you actually discuss the issues for airlines caused by the unfolding Israel-Hamas conflict.
This week, Indonesia's Ministry of Tourism & Creative Economy hosted the 2023 Tourism & Creative Economy Outlook Forum in Jakarta. I enjoyed joining Mason Tay, Associate Director of Global Market Growth at Tripadvisor, and Nia Niscaya, Director of International Tourism Promotion at the Ministry of Tourism & Creative Economy, for the kick-off panel discussing the Global Strategic Outlook for Tourism.
So, What Did We Really Learn From China's October Golden Week Holiday?
826 million domestic trips.
14.22 million air passengers.
Car rental bookings almost 5 times greater than 2019.
Chinese Golden Week travel statistics are always huge, and October’s headline figures didn’t disappoint. Dig deeper, though, and the travel economy is still recovering.
I’m pleased to announce a partnership with Shanghai-based tourism expert Yereth Jansen. We’ll be launching our new brand shortly to deliver travel and tourism consulting, training and thought-leadership content in China and Asia Pacific. Look out for our new projects in the coming weeks and months.
To kick off, we produced a 30-minute video chat, What Did We Really Learn From China’s October Golden Week? We selected 5 key takeaways. Below is a short summary of our discussion.
CLICK HERE to watch the video chat.
1) Chinese brands know how best to market to Chinese consumers
“You have to operate at a speed in China which is hard to match in other parts of the world.”
Although internationally isolated, China hasn’t operated in a commercial void for the past 3 years. Innovations in mobile and offline commerce continued at “China Speed.” Tourism destinations, travel suppliers and hotel brands that refocused their domestic business models have benefited. Home-grown OTAs, cosmetic houses, EV makers and F&B brands all invested heavily in their national value chains. They created bespoke services to build traction in China’s fiercely competitive consumer markets.
Travel providers beyond China that haven't been watching closely will notice a big gap between travel consumer expectations and tourism service capabilities.
2) Chinese social media drives the quest for new travel experiences
“It’s difficult for travel and tourism operators outside of China to understand how social media influences how tourists think when they travel overseas.”
Mirroring Chinese mobile technology overall, social media operates in its own distinctive and vast sphere of influence. Red-hot travel experience-sharing apps like Xiaohongshu operate entirely apart from global social media platforms. Travel influencing and experiential trend-chasing continue to evolve at high-octane pace.
Global destinations and travel brands invest heavily in Chinese social media, but it’s a highly defined art and requires frequent conceptual refreshing. User-generated is trusted much more than brand-created. Peer-to-peer engagement is where it’s at.
3) High-speed rail is pivotal in trip planning and destination marketing
“The world’s largest high-speed rail network has become intrinsic to domestic travel planning, and to think it didn’t really exist 15 years ago.”
China’s high-speed rail network is used by destination marketers to entice younger travellers wishing to visit cities trending on social media that are accessible by train. The roll-out of appealing onboard services, like airline-style cabins, business-class bed-seats and off-train meal deliveries at the next stop make trips more enjoyable. Themed high-speed train packages are being marketed to attract older and family tourists during peak travel seasons and the summer school holidays.
These factors are influencing young people to produce user-generated video content of their in-train experiences. Consequently, the journey itself - once perceived as boring and tiresome - is socially shared in real time like in-destination activities.
4) China continues to deploy a unique take on over-tourism
“Some destinations were completely overrun during the Golden Week.”
Golden Weeks were introduced in 1999 to enable Chinese workers to travel (and spend) with their families. If you rewind to the mid-2000s, you will find articles and images of crowded airports, train stations, beaches and tourist sites like the Great Wall, West Lake in Hangzhou and The Bund in Shanghai. Over-tourism during Golden Week is neither a new concept nor is it viewed in the same way as elsewhere.
The A-rating system in China evaluates tourist destinations on various criteria, including capacity management. This system has been criticised for potentially encouraging over-tourism during mass-travel events like Golden Weeks.
5) Managing expectations is vital for South East Asian destinations
“In the year so far to 8 October, 268,300 international flights were operated, a decrease of 64% compared to the same period in 2019.” [VariFlight]
It’s fair to say that 2023 expectations in South East Asian nations - where 23% of the inbound market in 2019 was from China - have been too optimistic. Golden Week re-iterated this point. International air capacity from China is only 57% recovered from 2019 [OAG].
Demand for South East Asian trips has been gradual. Thailand is the clearest example. During the Golden Week, which was overshadowed by a fatal shooting in Bangkok, Thailand received 10% less inbound visitors than the previous week. It has now revised down its 2023 forecast for Chinese visitors from 5 million to 4 million.
Destinations and travel suppliers budgeting for 2024 should avoid over-emphasising the 3 Golden Weeks. New tourism patterns will emerge across the calendar year. Concentrating on 3 weeks out of 52 means missing out on year-round opportunities.
CLICK HERE to watch the video chat.
AI, OTAs, Payments & Ancillary Revenues for Independent Hotels
“AI will fundamentally change the way people travel, the way OTAs work and how hotels have to adapt. We are still in the very early stages.”
With Golden Week behind us, hotel players are looking ahead to the end-of-year tourism season and Lunar New Year. This week, we welcome Vikram Malhi, Founder & CEO of Zuzu Hospitality, to The South East Asia Travel Show. We discuss the differentiated speed of the hotel rebound region-wide, the outlook for Chinese and Indian tourism - and we tackle next-gen AI solutions for OTAs and hotels.
Listen to AI, OTAs, Payments & Ancillary Revenues for Independent Hotels in South East Asia, here:
Or search for The South East Asia Travel Show on any podcast platform
And, that’s a wrap for Issue 120.
The Asia Travel Re:Set newsletter will be back on 29 October.
Until then, find me at LinkedIn and The South East Asia Travel Show.
Happy travels,
Gary