Key Focus For China's Outbound Business Travel In 2010

The global financial woes and H1N1 swine flu were the two key issues for the outbound tourism market in 2009, and tourism operators are thinking what impact these key issues will still bring to the outbound business travel market.

Although the 2009 tourism market suffered a "cold" beginning, it had showed quite a different picture by the end of the year as tourism operators made great efforts to make a difference. From product innovation to channel innovation and concept innovation, it seems that 2009 was the starting point for innovation in the industry. The new China Travel Service Head Office has consolidated the employees of the three original travel agencies in one office in CBD Beijing. And China Environment International Travel Service has already made some achievements in channel development and theme innovation. Business travel can be considered as the pulse of economic development, and the choice of destination is the criterion. This article will also compare France and the Netherlands in Europe to offer an in-depth view for business travelers.

Be Active in Channel Development, Promote the Upgrading of the Business Travel Market
China Travel Service (Holdings) Hong Kong Limited and China Travel Service Group have completed the largest acquisition in the Chinese tourism industry in 2007. The core properties of the two entities, including China Travel Service, China Travel International and China Merchants International Travel Corporation have formed the China Travel Service Head Office Company. How is outbound business travel positioned and planned in such a large tourism enterprise? China Hospitality News interviewed Zhang Hao, the vice president of China Travel Service Head Office, to find out.

Business travel consists of investigations, exchanges and training. Though outbound business travel has relatively few concepts it spans a broad territory that covers almost every industry. In the outbound department of CTS Head Office, it is the Theme Travel Department in charge of business travel which offers popular customized services to clients. Zhang told China Hospitality News that the new CTS Head Office attaches great importance to business travel, and is making new adjustments to this market.

According to Zhang, business groups only account for 30% of the market share handled by CTS Head Office's outbound department. Yet it has made great contributions to the department's total revenue. In the first half of 2009, business groups, which is mainly business travel, made a profit of CNY1 million.

Compared with the same period in 2009, the business travel market has increased by 5%. Due to the influences of financial crisis and H1N1 flu, there are a series of changes in the market such as the increase in inbound tourism and short-haul tours. The changes have two characteristics. First, the demand for first class and business class seats and for five star hotels is increasing, which is a result of the higher grades of tourist. Second, more tourists are choosing America instead of Europe as their destination. As well as China having been granted U.S. Approved Destination Status, this also has to do with the larger economic environment, and even the depreciation of the dollar. More and more business people are seeing investment opportunities in the U.S. and South America which leads to the increase in exploratory visits. Zhang said this also shows the changes of tourism industry are in accordance with the macro-economic situation, and that business travel is the pulse of the economy.

A series of reforms has also been put in process along with the reorganization of CTS Head Office, and channel expansion is one of the most important measures. First, there are more business travel channels after the reorganization of the three agencies. This is the key task and some achievements have been made. Second, standards have been established for customized services which have improved the benefits. Third, adjustments have been made to the original operational models and processes, enabling professionals to do professional work with a clear division of labor.

Talking about the outbound business travel market in 2010, Zhang Hao thinks there are still uncertainties despite the fact that the market has grown in 2009. For example, when will the financial crisis end is still a big unknown factor. Compared with China's economic environment, the USA is to some extent still under the haze of the crisis to. Currently many clients are still considering whether or not to invest in outbound travel or not in 2010.

In 2010, CTS Head Office will offer more proactive marketing services to clients. It will provide specific information for specific channels taking advantage of its knowledge of overseas destinations. In addition, it will also enhance importance of developing theme travel products. For example, it will plan theme travel for business travel based on large-scale activities and programs in foreign countries, and will strive to promote a competitive product each month to help business travelers to choose the appropriate products.

High-end Customized Travel Leads the Way
Global Financial crisis and H1N1 flu are the two major challenges in 2009 for China's tourism market. Self development and improved risk-proofing are the major problems placed before travel agency managers. Zhong Hui, the general manager of China Environment International Travel Service Co., Ltd, told China Hospitality News that the outbound business travel market in 2009 saw four major changes. First, the number of governmental groups traveling had decreased, and the number of large-scale business groups had also reduced significantly. Second, of all the governmental groups or business groups, the number of groups with clearly defined objectives has increased. Third, the number of business groups traveling normal passports is increasing. Fourth, the number of business trips to a single country has increased and these have more specific agendas.

The market changes demands innovation from travel agencies. Yet where is the breakthrough? CEITS made two major innovations in 2009. One was to enhance channel innovation and be strategic partners with enterprises of different fields. "This is the future direction of our travel agency," says Zhong. CEITS has set up a strategic partnership with China Minsheng Bank, and CEITS will offer value-added services to VIP clients of the bank by offering private travel consultancy services. This is the response to the increase in the number of outbound business groups traveling on normal passports, according to Zhong. These clients have various needs for business travel, such as car rental, outbound hotel booking and buying train tickets. By offering customized services to these clients, CEITS can provide outbound travel services within China. The strategic partnership is beneficial to both parties, and is especially helpful for travel agencies in developing the high-end market. For example, the cruise products of CEITS are quite successful because this partnership.

On the other hand, CEITS has attracted target business travel market with its various theme activities. In 2009, CEITS has introduced a series of new products. Their "green travel" products have attracted business people with interests in environmental and ecological areas and high-end guests who want to be close to nature; the London Fashion Week has attracted guests from fashion industry; and the Tokyo-Cannes Oscar Tour targets people from film industry. These innovations that target specific clients with special themes can bring a stable market to CEITS.

Currently travel agencies are facing a lack of talent that can provide customized high-end travel services to clients. Facing up this question, Zhong suggests that agencies can adopt the model of fractional culture. That is to train professionals for one specific destination first and then offer personal consulting services about this single destination to clients. Internal training is one of the must-haves in CEITS. In 2009, CEITS has successfully launched more than 300 training lessons concerning every aspects of tourism.

From product innovation to channel innovation, the most important thing is the innovation of concepts. When summarizing for the success in business travel market in 2009, Zhong Hui figures there are five key things that have to be attended to. First, introduce customized business travel service according to clients' demands; second, strength the interaction with telecommunications, finance, real estate and other fields, and establish strategic partnerships with them; third, build effective service tools such as call centers, websites and blogs to expand the market; fourth, treasure talents introduction and training; and fifth, stabilize relationships with clients and keep in touch with them.

Regarding plans for 2010, Zhong said CEITS will put more efforts in direct client market and lead the way in tourist products. It will introduce more convenient products with competitive prices and good services. Along with the Internet call center and customer service center, CEITS will target more high-end clients in 2010. CEITS will introduce more specialty products featuring films, cruises, honeymoons, shopping and sports.

France: Developing Upscale Business Travel Products
Kang Nong, promotion director of French Tourism Development Agency, told China Hospitality News that in January an automobile company has organized a group of 680 people going to France for incentive travel and this is the largest MICE group in 2009. Before June 2009, BTG Travel, CTS Head Office, CITIC Travel, Air China Travel have all organized MICE groups of 100-200 people to France. To date, the biggest MICE group to France from China was the MICE group of 1,750 employees from Taikang Life Insurance in 2006.

Kang said China's MICE experienced a course of China-Southeast Asia-Australia-America-Europe, and it would be inevitable to go to French if people choose Europe as their destination for its cultural background.]

South Africa, Australia, Italy, England, and Spain are the major competitors for France as a MICE destination. France has consummate facilities for MICE reception such as hotels. In Paris there are more than 600 events of over 3,000 participants held each year which has given it wide experience for operating such events.

Though business travel to France had suffered in May, June, and July 2009, yet it developed well after September, bringing a better annual result than in 2008. Air tickets, hotel room stays and data from travel agencies all show that business travel to France is increasing. Because of the regulations that Chinese government has issued to strengthen management on traveling abroad for governmental issues, the number of business groups holding normal passports has increased to 88.5%.

Kang said there is still a great opportunity for the development of French tourist products. French Tourism Development Agency has been concentrating on shopping, skiing, golf, and wine tours, but there are few high-end serial products in travel agencies since they mainly work on single groups which results there in there being no mainstream product. This requires travel agents to enhance their depth of understanding of the destination and expand channels to promote this to their target.

Beijing, Shanghai and Guangzhou are almost equal in their response to new products, according to Kang. But Beijing has a larger percentage resulting from the product promotions via websites. Shanghai focuses more on in-depth products and business groups account for a larger proportion of travelers. And Beijing shows obvious advantages in terms of MICE groups.

MICE and business groups can both find themes to suit them since France has a number of tourist products. For example, Paris, Nice, Provence, Biarritz, and Bordeaux are all suitable for theme travel. Kang hopes French tourist products will be high-end theme travel.

The Netherlands: Exploratory Tours for Business Travelers
The Netherlands is a country of windmills, cheese, and tulips — that is the impression most tourists have of the country. In fact, behind the windmill there is the knowledge for land drainage that makes it strong in water management. Cheese and tulips make the Netherlands one of the world's largest exporters of agricultural products. Rotterdam is Europe's largest port with a world-class information and communication technology infrastructure. In agriculture, flower-growing is quite popular. There are many logistics centers in Amsterdam and at Schiphol airport. All these resources are attracting Chinese business groups to the country.

Eddie Yang, the director for China at the Netherlands Board of Tourism and Conventions, said that from January to August 2009, the number of Chinese tourists visiting the Netherlands had increased by 13%, and in August the numbers had increased by 36% over those in 2008. Compared with the surrounding countries, the Netherland's market share has increased by 14.3%. Yang believes that the Netherlands is a country that needs people to experiences it for themselves. For example, the wide use of bicycles, the popularity of public transport and the dense rail network show the environmental awareness of the people.

There are various international exhibitions held in the Netherlands. In Amsterdam, a number of meetings and seminars are held each year, ranging from a cardiologist conference with 15,000 participants, or a conference of 1,500 IT professionals, or even an antique fair. There are also some famous awards events such as World Press Photo, International Broadcasting Convention and TEFAF Maastricht. TEFAF would attract more than 200 exhibitors each year from 15 countries with exhibits of USD1 billion. In 2007 and 2008, Chinese furniture was been displayed there.

Business travelers have accounted for 40% to 50% of total Chinese tourists to the Netherlands, stated Yang; and many of them would like to visit the country for the second time. For MICE clients, there are many activities to be considered, such as horse riding, milking cows, weeding, crazy golf, and other outdoor activities that can be part of teambuilding initiatives. For those second time visitors, they can choose difference investigation destinations according to their professions.Choices include the Afsluitdijk, the Hoorn Steam Train, the flower parade in September from Aalsmeer to Amstelveen and Amsterdam, and the Flower Auctions at Aalsmeer.