At a glance
"Companies in industries hit by declining customers due to the outbreak such as tourism and hospitality should maintain continuous communications with consumers and adjust strategies in anticipation of upcoming revenge spending. "
Tourism is one of the most hit industries during the current coronavirus outbreak as in the SARS outbreak in 2003. However, it is expected to be the fast recovering industry after the current outbreak as during the SARS outbreak.
According to data from Ctrip.com (a leading OTA in China), the travel services platform underwent a 200% growth of bookings in the month when the outbreak came to an end, after a “quick-freezing” period of three months, and its turnover of air travel bookings grew 200% year on year during the first National Holiday “golden week” holiday after the SARS outbreak.
Here are some lessons from SARS, portraits of nowadays Chinese outbound visitors, and our advice on marketing strategies of tourism-related brands.
Lessons from SARS
- Who might be Chinese travelers after the epidemic?
As unexpected epidemics, the 2020 coronavirus and 2003 SARS have created grave impacts on China's tourism development. To adjust marketing strategies after epidemics in 2020, it is necessary to take a look at the travel industry data after SARS. A report released by Ctrip.com in 2003 reveals that in terms of age, the post-70s generation dominated 54%of the tourism market, while the post-60s generation occupied 29% market share.
Meanwhile, according to Ctrip.com’s big data from June 2003 to May 2004, in terms of gender, it is surprising that male customers outnumbered females with a ratio of 69:31.
Almost two decades later, with lessons from SARS, it is foreseeable that the post-90s and post-80s generation might take the majority of the 2020 travel market after the epidemic. And males might be the TA for tourism-related brands.
- How will they travel?
According to Ctrip.com’s big data in 2003, domestic excursions constituted the major part of Chinese tourists, occupying 45.1%. Long Journey took the second largest market share, accounting for 33.2%. The third most popular one was international travel, with a share of 20.6%.
In terms of post-epidemic travel style, 74.3% of travelers are in favor of DIY travel, meaning only flight tickets and hotels are booked for the travel. Group tours took the second largest market share, accounting for 13.2% (Source: Ctrip.com’s 2003 consumer report).
The reason behind the DIY travel upsurge is the fear of “the crowd”. Avoiding contact with people remains the priority of the consumer’s concern.
- Business trips will recover faster
Unlike leisure travel which is arranged by individuals and more easily affected by public health concerns, business events, and trips are a “must-go” for enterprises. Once the epidemic is over, the number of global, regional, and MICE events that were postponed will resume thus pushing the demand for travel to increase exponentially towards the 2nd half of this year.
According to a survey done by Ctrip.com in June 2003, 72.3% of the respondents believe more business events will be held after SARS. It is also predicted by experts that ”the recovery of the travel industry will start from business trips”.
Outbound visitors nowadays
Note that compared to 2003, Chinese people's living standards and consumption levels have improved tremendously. As a result, the outbound visitors grow by leaps and bounds. It is important to take a look at more recent figures of Chinese outbound visitors.
- Chinese outbound tourism is mostly generated in the east and south-east coastal areas
Due to imbalanced economic development in the country, east and south-east coastal areas travelers took the majority of Chinese outbound visitors. To be specific, five highly-recognized urban areas will dominate the market: the Beijing–Tianjin–Hebei area centered on Beijing; the Yangtze River Delta centered on Shanghai; the Pearl River Delta centered on Guangzhou and Shenzhen; and the Chengdu-Chongqing agglomerations and city clusters along the middle reaches of the Yangtze River.
Source: China Tourism Academy/Data Center of Ministry of Culture and Tourism.
- Destinations for outbound travelers
Thanks to the great improvement in Chinese people’s consumption level, outbound travel is no longer a privilege for a few. The growing number of highly educated population allows more Chinese travelers to better understand and appreciate destinations. Chinese people are now eager to go outside to explore other parts of the world, which creates a tremendous market for foreign countries.
The top 10 destinations for Chinese outbound travel in 2019 were: Japan, Thailand, Viet Nam, the Republic of Korea, the United States, Singapore, Malaysia, Cambodia, the Russian Federation, and Indonesia (Source: China Tourism Academy/Data Center of Ministry of Culture and Tourism).
- Sightseeing travelers ranked first in 2019
Leisure and sightseeing are the predominant features of Chinese outbound tourism. And family bonds are an overriding feature in Chinese outbound travel with 51% traveling with family, which is closely tied to the collectivist culture in China.
Source: China Tourism Academy/Data Center of Ministry of Culture and Tourism.
- Vacation spending
China is considered the world's fastest-growing tourism market and will play a key role in the sector's development.
Chinese tourists made 149 million overseas trips in 2018, with total spending amounting to $130 billion, the average cost per traveler reached $800, according to a report released by the China Tourism Academy. Ctrip.com’s data also confirmed this figure as the average spending of outbound tour groups, DIY travel and individual tours per traveler reached $810 in 2018.
Keep communication and get prepared for vengeful consumption
In summary, thanks to quicker crisis management policies and the improvement of Chinese people's living standards and consumption level, it is foreseeable that international tourism will recover faster than in the post-SARS era.
Now it’s a good time for airlines, hotels, and other tourism-related brands to communicate with consumers on a brand level to win over consumer’s minds. For future performance campaigns, highly educated males of the 80s and 90s generation from first-tier cities who are interested in sightseeing might be the new target for tourism-related brands.
It is worth mentioning that although Ctrip.com has experienced a significant drop in queries for the Tomb-sweeping Day holiday in 2020 compared to 2019, we still see an increase in travel interest for the 2020 May Day holiday. Because of the five-day break for this year’s May Day holiday, it is expected that there will be a vengeful growth of trip-makers during the holiday after the outbreak is controlled.
Therefore, the ongoing outbreak provides a window of time for airlines, hotels, and other tourism-related brands to implement continuous communications with consumers to win over consumers and make full preparation for the vengeful consumption driven by the spending desire having been suppressed for several months.
