Behind the popularity of “City Not City”, exploring the full-link opportunities of inbound tourism

As the voice of inbound tourism in China grows louder and louder, the popularity of "City is not City" is not only a manifestation of cultural phenomenon, but also a microcosm of the opportunities in the entire chain of the tourism market. From policy support to market demand, from payment convenience to personalized travel experience, OTA platforms such as Ctrip are taking advantage of the trend and continuously innovating and optimizing services to meet the growing demand for inbound tourism. This article will explore in depth the potential and opportunities of the inbound tourism market and the key role played by OTA platforms in it.

A few days ago, the Political Bureau meeting set the tone: to take service consumption as an important means to expand and upgrade consumption, support consumption in culture and tourism, elderly care, childcare, and housekeeping, once again confirming the high positioning of culture and tourism.

If we want to build a strong tourism nation, inbound tourism is undoubtedly an area that cannot be ignored.

This summer, the voice of inbound tourism is getting louder and louder.

With the continuous expansion of the “visa-free circle of friends” and the explosion of popularity of “China Travel” and “City not City” on global social media, foreign tourists are flocking to China, and a large number of foreign friends are eager to try.

The status of travel agencies is a microcosm of this. According to a recent report by CCTV News, all travel agencies with international business are full of orders, and a large number of foreign friends want to visit China. The head of a Polish travel agency also said that China is now an ideal tourist destination for many people.

Moreover, an unexpected surprise is that inbound tourism has become an effective way to break through the "information cocoon", making "China Travel" = "quiet, safe, and modern". A huge chain reaction may have started from now on.

It is not difficult to judge from this that this is not only an opportunity for the revival of inbound tourism, but also an opportunity to reshape the industry.

The question is, how can the demand side support the formation of a long-term trend? How can the supply side build a high-quality system?

01 Three clues to understand demand

From the demand side, there are three points worth paying attention to, which constitute a relatively stable support framework.

First, the development of inbound tourism conforms to the country's strategic needs, and the economic and strategic value it can bring is by no means limited to the tourism industry.

From an economic perspective, inbound tourism is an important part of trade in services, and the expansion of the visa-free policy is equivalent to encouraging exports, which helps to increase GDP. Moreover, inbound tourism can bring incremental wealth to the country, because inbound tourism earns foreign exchange income, which is different from the logic of outbound tourism and domestic tourism.

Referring to a recent report from Morgan Stanley, there is also considerable room for imagination.

According to Morgan Stanley's estimates, the revenue from inbound tourism is expected to reach 1.7-4.5 trillion US dollars in the next 10 years, and the contribution rate of inbound tourism to China's GDP is expected to rise to 2-4% after 10 years.

In addition, developing inbound tourism allows the world to see the real China, and is destined to be an important symbol and link of a tourism powerhouse and opening up to the outside world.

Just like the breakthrough of inbound tourism in the "information cocoon", the video content shot by foreign tourists during their travels has given the foreign public a more intuitive understanding of China and has caused a massive amount of spontaneous dissemination. The high frequency of using "unexpected" and "never thought of" to express sensory impact reflects the change in cognition, which will also serve as the underlying support for a tourism powerhouse.

Ultimately, user behavior is superficial, and cognition is the underlying driving force.

Looking at the bigger picture, this is also of great significance to areas such as open innovation. The world's innovation centers in history have all been centers of personnel exchange, such as Greece and Rome more than 2,000 years ago and Xi'an during the heyday of the Tang Dynasty in China.

Against this backdrop, there is reason to expect that relevant policies will continue to be effective and support the release of demand in the long term.

Secondly, the development of inbound tourism conforms to people’s “high-level demands” and at present it combines the characteristics of “counter-cyclical” and “new growth”.

As the economy develops to a certain level, food and clothing are no longer the main problem, and people will naturally turn to pursue spiritual needs, which are reflected in Maslow's needs, that is, the high-level needs of social interaction, respect and self-realization. When people mention tourism, the first keywords that come to mind are exploration, freedom, enjoyment, etc., which just meet the needs of self-realization.

In the long-term spiritual pursuit, people are more likely to actively seek the meaning of life, and tourism provides a way to do so.

At the same time, considering the pressure facing the global economy, people may increase their spending on fast-moving consumer goods or service markets to improve their sense of happiness and tend to travel, similar to the "lipstick effect."

Nowadays, inbound tourism is also considered to be a new growth opportunity in the tourism market. As mentioned above, Morgan Stanley expects that the contribution of inbound tourism to China's GDP will rise to 2-4% in 10 years. Previously, Liang Jianzhang, chairman of the board of directors of Ctrip Group, said that if its proportion can be raised to the international median, that is, 1.5% of GDP, it will bring at least 1 trillion yuan of growth space.

Japan's experience provides lessons in both dimensions.

Looking back at history, at the end of the 20th century, Japan's economy was in a downturn, and tourism became one of the few industries that bucked the trend; in recent years, Japan's tourism industry has developed rapidly, and inbound tourism has grown significantly, becoming an economic pillar. In the first quarter of this year, the nominal consumption of inbound tourists increased five times that of 10 years ago when converted into annual data.

Third, the demand and connotation of inbound tourism are continuously enriched and advanced, and "China Travel" is becoming more diversified and personalized.

On the one hand, as cognition forms the underlying driving force, the demand for inbound tourism is undoubtedly growing; on the other hand, this demand is also developing in the direction of diversification and personalization.

For example, foreign tourists today are no longer satisfied with flying around, but have fallen in love with taking high-speed trains to experience the speed of China; they not only check in in cities such as Beijing, Shanghai, Guangzhou, and Xi'an, but also learn basic transportation and payment in these "newbie villages" and begin to expand their map, including exploring "niche" cities such as Yiwu and Beihai.

At the same time, foreign tourists prefer customized and distinctive itineraries, especially repeat customers who prefer to learn about Chinese culture in a personalized way and have an in-depth experience of it, such as learning Cantonese embroidery and Cantonese opera in Guangzhou.

These changes are all incremental and opportunities, which will bring more new structural opportunities to inbound tourism and inject more impetus into it.

Thanks to these three levels of demand, the inbound tourism market has built a relatively stable "triangular support structure" on the demand side as a whole.

For example, the demand for inbound tourism can gain a good foundation based on national strategic needs and advance, thereby better conforming to people's pursuit of higher-level self-realization.

On this basis, it is not difficult to judge that the prospects of the inbound tourism market are bright, and there is a trend of accelerating recovery and even rushing to the next level.

02 OTA platforms follow the trend

Of course, the continuous increase in market demand has also put higher demands on the supply side.

To understand from the bottom up or source, perhaps it can be said that this is the result of national policy dividends. Major OTA companies provide overseas tourists with a more convenient travel experience around the entire chain of inbound tourism, including payment, tickets, accommodation, travel, etc., and market behavior that goes with the trend is more appropriate.

The first hurdle upon entry is inevitably the visa issue.

This year, China has implemented a series of visa facilitation measures, from unilateral visa-free policy, mutual visa-free policy, to 72/144-hour transit visa-free policy, allowing tourists from all over the world to “go whenever they want”.

The latest data shows that China's 72/144-hour transit visa-free policy has been extended to 54 countries, and the National Immigration Administration has also implemented a 144-hour transit visa-free policy at 37 ports in Beijing, Tianjin, Shijiazhuang, Hebei, etc. In addition, China has also tried out a visa-free policy for six countries, including Switzerland, Ireland, Hungary, Austria, Belgium, and Luxembourg, which will be valid until November 30, 2024, and is constantly expanding its visa-free "circle of friends".

After smoothly entering China, one cannot avoid the basic elements of tourism, which can be simply summarized as "payment", "accommodation", "travel" and "entertainment".

In order to match demand, the supply side will inevitably need the cooperation of OTA leaders. With their international business layout, global supply chain and customer resources, they will be able to better meet the needs of a wide range of users and respond to the high-frequency and diversified needs of the tourism market.

It is crucial that the provision of tourism services and consumer experience are ultimately realized in an offline environment. This involves how to effectively integrate tourism products and services, adopt more efficient system processes, and work closely with all links in the industry chain to meet emerging personalized needs.

As a leading domestic OTA company, Ctrip’s various initiatives have proven this point.

1. Payment

Due to differences in payment habits and preferences, some foreign tourists are not used to China's payment environment, which to some extent affects their travel consumption experience.

This year, various ministries and commissions have introduced measures to optimize payment services. For example, the General Office of the State Council issued the "Opinions on Further Optimizing Payment Services and Improving Payment Convenience", which clearly stated that it is necessary to improve the convenience and popularity of payment services, ensure the smooth implementation of payment methods such as "large-amount card swiping, small-amount code scanning, and cash guarantee", and allow foreign tourists to enjoy a barrier-free consumption experience.

Guided by the policy, platforms such as WeChat and Alipay have taken action and responded positively. Among them, Alipay has increased the single and annual transaction limits for foreigners, introduced multilingual services and convenient functions such as "One Code Pass". WeChat has simplified the registration and payment process for foreign users, allowing them to bind foreign cards or make small top-ups to enjoy the same convenient payment experience as domestic users.

In response, Ctrip provides "coin purses" at 24 foreign exchange outlets in 13 cities across the country, which contain a number of small-denomination banknotes such as 20 yuan, 10 yuan, and 5 yuan, to facilitate foreign customers to exchange. At the same time, it is also cooperating with hotels in Shanghai to carry out a pilot business of handling foreign exchange in hotels. In other words, when foreign tourists check in at a Ctrip-authorized hotel, they can immediately handle small-amount exchange services at the hotel front desk.

2. Accommodation

Noting that some foreign tourists have previously stated that they were refused accommodation in hotels on the grounds that the hotels "cannot accommodate foreign guests", the Ministry of Public Security, the Ministry of Commerce and the National Immigration Administration jointly stated that the hotel industry shall not refuse to accommodate foreign personnel on the grounds that it does not have foreign-related qualifications.

At the same time, as the public becomes increasingly concerned about the security and privacy issues of facial recognition technology, and considering that criminals may use this technology to commit crimes, hotels in many cities including Beijing, Shanghai, Guangzhou and Shenzhen have canceled the mandatory facial scanning requirement upon check-in to dispel tourists' concerns about privacy leaks.

In addition, in Shanghai and other places, various types of special accommodation resources are further opened to inbound tourists, and the front desk also provides English maps, and American and British options are added for breakfast, etc., continuously clearing the "bottlenecks" of inbound tourism.

3. Travel

As foreign tourists arrive in China, they may encounter some challenges on the way to their destinations, such as unfamiliarity with how to take public transportation, operate domestic taxi apps, etc., which will affect their travel experience.

In view of this pain point, in April this year, Ctrip Private Car entered Ctrip's overseas platform to provide car services directly to overseas tourists. At present, the service has been launched in 26 popular inbound tourist cities across the country. Foreign tourists can directly book the car travel service provided by Ctrip Private Car through Ctrip's overseas platform, and enjoy the convenience of unlimited free, all-inclusive, Chinese and English bilingual drivers, etc.

In addition, Ctrip's private car service has also launched the "Welcome to China" campaign, where foreign tourists who book summer flights to seven cities including Chengdu, Shanghai, Beijing, Guangzhou, Shenzhen, Chongqing and Xi'an can receive a coupon and enjoy a free airport pick-up service.

4. Play

As many scenic spots have cancelled their ticket reservation systems, Ctrip has responded to demand and optimized its ticket purchasing services.

In response to the difficulties foreign tourists may encounter in purchasing tickets at scenic spots, such as language barriers and not being able to find ticket offices, Ctrip's overseas platform has launched online ticket purchase services in cooperation with more than 2,000 domestic scenic spots. It has also launched international version ticket machines in nearly 30 scenic spots such as the Badaling Great Wall and the Qin Shihuang Mausoleum Museum, supporting foreign tourists to purchase tickets in multiple languages ​​and with multiple payment methods. In addition, Ctrip's overseas platform has also launched more than 8,000 day and half-day tour products to meet the personalized travel needs of foreign tourists.

It can be concluded that the development of inbound tourism is the result of the dual effects of policy support and market demand.

In particular, OTA platforms like Ctrip, which have strong operational and service capabilities, can better adapt to the needs of the new industrial chain and provide consumers with more personalized and diversified outbound travel products and services, playing a vital role in this process.

With the gradual recovery of cross-border transport capacity and the optimization of visa-free convenience policies, leading OTA platforms such as Ctrip may be the first to benefit from this, occupying a more important position in the future inbound tourism market and becoming the main engine of industry growth.

03 Conclusion

The potential and opportunities of the inbound tourism market have never been as obvious and within reach as they are today.

Faced with the huge potential of the inbound and outbound tourism market and the continuous evolution of consumer demand, innovation and reform on the supply side have become crucial. This not only helps to promote the continued development of the market, but is also a key driving force.

As a leader in OTA, Ctrip has not only taken a leading position in the industry, but is also continuously consolidating and enhancing its core competitive advantages.

We firmly believe that with the in-depth development of China's digital economy, OTAs like Ctrip will continue to integrate into the new era, serve as the infrastructure of China's digital economy, tell good Chinese stories, and on this basis continue to explore and discover new growth points in the industry.

In the future, more exciting surprises and results may continue to emerge, and the new value of OTA platforms such as Ctrip is also waiting to be explored by the market.

Author | Internet Things Data Support | Gogu Big Data (www.gogudata.com)