Challenges and Opportunities for Winning Consumers in Tourism: Key Insights from Industry Experts Emily Cheung and Casper Tollerud

SUMMARY

Digital Bootcamp Asia’s Webinar: “Tourism – Challenges and Opportunities”

Digital Bootcamp Asia’s latest webinar, sponsored by Tolmao Group and CEO SUITE, focused on the challenges and opportunities of tourism post-COVID-19. Sharing their insights on the topic were Emily Cheung, Founder of STW Innovation, and Casper Tollerud, CEO of China – BEIOU360. The discussion focused on five important questions:

 

  1. What is the current (post-COVID-19) situation of the tourism industry?
  2. What are the adjustments businesses made during the outbreak?
  3. How are businesses dealing with the altered behavior of consumers?
  4. How long will it take for the industry to recover?
  5. What strategies will help plan for the future?

 

Emily Cheung’s Perspective

 

According to Ms. Cheung, as the tourism industry overcomes the difficulties it faced from the pandemic, specifically people not able to travel locally or overseas and the uncertainty of the situation, it must transform from its traditional ways of business to new and innovative ways of working. This transformation involves understanding that people are spending their time in the virtual landscape, creating online strategies and digital campaigns to cater to consumers’ new tendencies, and positioning your brand to recognize the importance of wellness in tourism.

 

Key points:

 

  1. As businesses transform to expand their online presence, they have to consider “life on the cloud” and realize how they can grow once they adjust to this way of promoting and expanding their business in the digital landscape.

 

  1. New brands that excel in online marketing and digital campaigns are winning consumers. This is because an e-commerce presence is the main channel to selling to Chinese consumers: 30% of the consumers reported that they tried new brands during COVID-19 lured by their online marketing.

 

  1. The future of tourism will focus on promoting wellness to consumers. Millennials, a large consumer group in China, are more likely to choose green and health-conscious tourism because of the impact COVID-19 has had on their lives. There will also be a shift to staying in one destination for a longer period of time to explore the local culture rather than visiting many locations in a shorter time.

 

Casper Tollerud’s Perspective

 

According to Mr. Tollerud, to overcome the impact that COVID-19 has had on tourism, it is important to understand the current situation for Chinese agents and travelers. With this understanding, businesses can determine likely scenarios once the world opens up, long-term trends for outbound tourism from China, and marketing strategies for approaching the Chinese market. This is essential as many of the agents are currently fighting to survive, while some have gone bankrupt and others are competing for the same market.

 

Key points:

 

  1. The current situation has left many agents struggling to survive, while others have gone bankrupt. Even with the government putting policies in place to help, including a 1% tax rate for the remainder of 2020, the slowdown has influenced their foreign suppliers. Many have pre-booked travel that is not going to be sold now. As this impact extends beyond China, agents are clamoring for the same market, and price wars have intensified.

 

  1. Travelers are waiting for news about what is happening and whether there is an opportunity to travel locally or abroad this year. Those traveling are taking short trips within their own city and province. Contrary to what the media reports, there is little eagerness to travel abroad and safety is the main concern.

 

  1. Since large OTAs need cash flow, likely scenarios will begin with selling volume over quality. While this works for the big agents, small agents will not be able to get flights because they won’t be able to compete with the big agents purchasing tickets in bulk. Regardless of size, the first wave of outbound will be “filling up the gaps” tourism and travel to easy destinations.

 

  1. Long-term trends as outbound travel gains momentum will involve sustainable tourism, clean/lifestyle tourism, and camps. While these destinations were not initially on the radar of Chinese travelers, they will most likely be a part of the tour catalog in the future and for longer stays.

 

  1. Strategies for this market should include online and offline approaches because travelers are going to new areas. Within China, it will be important to find a niche, differentiate between B2B and B2C, and determine if OTAs are effective. Strategies should also consist of building relations with many agents, establishing relations outside the tourism industry, and responding to travelers’ questions instantly.

 

To learn more about the challenges and opportunities of tourism post-COVID-19 discussed in this webinar, please continuing reading the article below:

 

Digital Bootcamp Asia’s latest webinar focused on the challenges and opportunities of tourism post-COVID-19. Industry experts Emily Cheung, Founder of STW Innovation, and Casper Tollerud, CEO of China – BEIOU360, shared their insights on the current situation of the tourism industry post-COVID-19, the adjustments businesses made during the outbreak including how businesses dealt with the changed behavior of consumers, predictions for when the industry will recover, and strategies necessary to plan for the future.

 

According to Ms. Cheung, who moved to Shanghai 12 years ago and spends half of her time in Europe, the tourism industry is limited at the moment as people are still not able to travel overseas. As she discussed how tourism can cope and survive with the ongoing uncertainty, she reflected in 2003 when the country was dealing with Black Swan incidents and e-commerce giants were emerging. E-commerce provided people the option to purchase commodities online, changing the landscape in China. Not experienced before, it provided unforeseen opportunities and millions in revenue as it continued to grow and transform consumerism. Today, much business is online, technology platforms are more advanced and people have adapted. It’s now common for the Chines to use QR code for purchases on a daily basis.

 

Also, the digital era materialized, giving rise to advances in other areas, explained Ms. Cheung. She cited Taobao as an example, which has about 500 million users, 60 million that are active daily, selling 50,000 products per minute. Digital is providing a platform for students and teachers to use learn, as well. Even though they don’t need to go to school, 400 million users are live streaming educational videos and learning and teaching online. Another example is Tech Talks, which is recording its highest growth of user registrations, reaching 1.5 billion users globally. As consumers spend more time online, this transformation is providing opportunities for businesses. They need to assess new consumer patterns and develop new campaigns to grab their attention and build brand visibility in China.

 

The industry expert identified three trends during the COVID-19 pandemic that have changed consumer patterns. The first one is to “live on the cloud” as people, especially Millennials, are sharing online and using social media platforms regularly. For example, people are using apps to share virtually what they are doing at the gym. They are also tracking wellness online. This trend is transforming their behavior to the point where they may no longer need to go to a gym because they can subscribe to an application, buy equipment, and exercise in their house. Similarly, education is becoming more popular and easier, even for learning English. Being creative and innovative during this time can save money. Brands that track and tailor campaigns to consumer activity will be better positioned to prosper.

 

The second trend is that brands, especially new brands, have opportunities to grow because all brands are competing in the virtual landscape. It doesn’t matter if a brand has one or 100 offline stores since all brands are developing online digital campaigns and leveraging social media to attract consumers shopping online in China. Based on her interviews of 100 Millennials, building the online presence is very important because they seek information online. Specific to the future of travel, which has been interrupted by social distancing and new consumers, learning China’s digital ecosystem, like Weibo, WeChat, and Tick Tock, which have become more popular, will be essential for targeting China’s young generation choosing to travel overseas. They will prefer more local travel and be less apt to go to two countries in two weeks rather than seven countries is the same time period as they pursue less hectic schedules and more time to enjoy life.

 

The third trend, concludes Ms. Cheung, is brand positioning to cater to healthcare tourism, wellness, and slowing travel. The uncertainty and devastation of the pandemic have changed people’s perspectives. When people travel in the future, they will be more concerned about sustainability, green, and wellness. While some will travel for luxury hotels, others will travel for relaxation and wellness to heal themselves not only outside but inside, as people have been suffering from staying home so long. Once they are comfortable traveling, they will continue to be cautious. Brands need to show they understand this and then position their message accordingly to market themselves as the best offer to their future audience.

 

Mr. Tollerud, whose company focuses on tourists traveling to Scandinavia in Northern Europe, agreed with many of these points. Specializing in identifying new and smart ways to market to Chinese travelers, he shared five points related to tourism post-COVID-19.

 

The first is to assess the current situation for Chinese agents. Many smaller ones are selling fruit and doing the carpet economy to survive as others have gone bankrupt. Some of the larger have crashed to make sure that the travel industry survives. The government has put some policies in place to help, including extending from paying the social benefits services and a 1% tax rate for the remainder of 2020, but that influences their foreign suppliers. Many have pre-booked travel that is no longer going to be sold. And, since COVID-19 has spread worldwide, many agents are doing mainly outbound before inbound or domestic tourism. As they begin to do domestic tours, prices will rise with competition for business and customers. As big agents buy in bulk and more agents target a much smaller market, there will be a lot of tension and price wars in the industry. This has also contributed to the rise in chartered flights geared toward business travelers. Agents can put 15 or 25 people on a small plane by a soldier via Singapore or Hong Kong to places like Beijing and Shanghai.

 

Assessing the situation for the travelers, which is Mr. Tollerud’s second point, is just as bleak as it is for agents. They are waiting for news about any opportunity to travel this year, even abroad. Despite the request for price quotes, the sentiment is that people will not be willing or have the possibility to travel this year. Instead, the focus will be on short, local trips within their own cities or provinces. Despite talk about revenge tourism, what was learned from the migrant crisis year’s back was that Chinese travelers will shift their focus away from unsafe locations. Safety is one of the main concerns with traveling.

 

The expert’s third and fourth points pertain to the likely scenarios once China and the world open up, and some of the long-term trends for outbound tourism from China. He believes specialty tours, like culinary and winery tours to easy destinations like France, Italy, and Belgium, will probably surge. This is because small agents will price competitively to regain some of what they have lost. Additionally, travelers are also going to seek travel that is sustainable, to fewer destinations in one trip, and more in-depth to experience local culture and focus on wellness. Camp tours will become even more popular since travelers tend to stay longer in the destinations, location is less important than the quality. These destinations that have not been on the radar of Chinese travelers will become part of the tour catalog in the future. These will be some positive trends resulting from COVID-19.

 

The fifth point focuses on some of the strategies to consider when promoting tourism to the Chinese market. Mr. Tollerud recommends looking beyond online marketing. While China is a giant market, millions of people travel abroad every year. As a large percentage will be going to new markets, it is important to look outside of the millions of Chinese who traveled abroad in 2019. Also, marketing online overlooks targeting specific markets and consumers that might be interested in a new niche, like camps and wineries. Strategies should also be based on factors like marketing business-to-consumer (B2C) or business-to-business (B2B). B2C marketing online works well since it is directly to travelers, many of whom are capable of organizing arrangements and visas on their own. However, it may miss out on travelers who need assistance or do not speak English well. With B2B, online has little value other than generating awareness. However, most marketing and sales will be done by the agents, and they have social media channels and client base in place. Many agents also resell to other agents, so they have a network of solutions ready for your marketing. It is important to establish relationships with agents.

 

Along with accessing the social and digital landscape, live streaming is another good way to promote in China, especially since the market has been growing as a result of COVID-19. It is more about the planning than the format for live streaming, so it needs to be continuous and the content needs to be consistent. It can even be useful for establishing relations outside the tourism industry. For example, with camps for kids, it can help build connections with schools that might help promote and sell products.

 

While the challenges and opportunities for winning consumers in tourism are many, the key takeaway is that traditional marketing for tourism is transforming as a result of COVID-19. As China begins to get back to normal and people consider traveling, it is important to rethink how to best position brand, create targeted content, and share key insights through varied social and digital distribution channels. By adjusting to the changed behavior of consumers and telling the story in the right way, businesses can build brand awareness, achieve hundreds of thousands of impressions by leveraging social media, attract customers and generate sales.