Travel Service Market in China

21Apr2015

Mainland China became the world’s biggest source of foreign tourists in 2014. Fierce competition is ongoing on the travel service market in China from planning extravagant galas and regional trade shows to packaging and booking travel products to serving the needs of the tourism sector, the industry of travel Service in China covers a lot of ground. As the Chinese tourism market expands at high speed, a good environment is being created to further drive its development. The process of inbound and outbound travel is becoming more simplified for the convenience of tourists. More products and services in the tourism sector are coming forward to meet the increasing demand from both the domestic market and abroad.

Chinese Travel Agencies have a lot to catch up to compete with foreign ones

The local Chinese travel agencies do have their own advantages in the competition with their foreign counterparts, their knowledge of the country’s geographic conditions and human characteristics. However, compared with the sustainable strength of many big foreign companies, the local ones have a lot of catching up to do.

Only a few years ago, some of Chinese Travel Agencies are infamous for forced shopping arrangements by taking tour groups to the ‘commission shops’during the tour. The guide will take shopping commissions from the shop according to tourists consumption. Local agencies expected to improve their service quality and build up a new image to compete with a foreign capital travel agency. With China’s accession to the WTO, the influx of foreign travel agencies will greatly challenge their Chinese counterparts.

Applying to the China’s WTO entry commitments that by 2003 foreign capital is allowed to take holdings in the joint-venture tourism service company. The foreign capital travel agency is entitled to carry out travel business in China.

Online booking and travel information website are booming in China

Chinese tourists are becoming more sophisticated and demands are more personalized. It is then changing the path of the travel service market in China. One of the most popular groups is identified as independent travelers, who prefer independent travel over group travel. They search for information themselves and make decisions based on their experiences, internet research and recommendations from friends, relatives or social media rather than the travel packages available. Online booking and tourist information travel service are booming due to independent traveler group.

Qyer.com, the leading and the most famous Tourist information and value-added travel service in China, was founded in 2004 and its core products include outbound travel assistance, forums, Q&A areas, destination information, as well as tips for low-budget travels. Up to now, ten million users and almost five million users visited the website or through apps. The website claims that over 92% spent over one week abroad during a single outbound trip; while about 99% of them expressed clear interests in outbound travel. Travel information sharing website Qyer cooperates with some associations, government agencies and companies also carrying out package or hotel booking service with a discount. With a large database of their clients, they are doing well in the bookings and bring in more revenue and partnership. They are clearly leading the travel service market in China.

Qunar, translated as “Where do you want to go?” in Mandarin, has overtaken Ctrip as China’s biggest travel site, booming on mobile sales. By the fourth quarter of last year, Qunar became China’s largest internet retailer of airline tickets with up to 150,000 flight bookings and with listings of 150,000 hotels. The Qunar app got more than 16 million downloads in 2012, and now they are spending heavily to focus on building mobile offerings including traffic acquisition, airline booking, and hotel offerings.

2014 Oct. Alibaba launched an independent travel marketplace branded Alitrip. By now, Chinese top 3 Internet companies Alibaba, Tencent, and Baidu joined the Chinese Travel Business game. They join the battle with Qunar.

The travel industry has been quite fit with new interactive media – the Internet, and has developed as the main sector in e-commerce field and has been a growing trend. But travel agency still keeps the main travel service delivery channel in the travel industry with the increase of adoption of online booking service in the travel industry, while still more of Chinese prefer to the traditional travel agency to save time and energy for them.

To see more:

http://www.wsj.com/articles/chinas-internet-giants-get-online-travel-bug-1414604652

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