Customized travel "borrows the channel" from Xiaohongshu

In the tourism industry, suppliers have discovered the consumption opportunities of customized tours on traffic platforms, and some businesses attach importance to online applications. This article analyzes the opportunities and operational logic of developing customized tours with the help of traffic platforms such as Xiaohongshu from the aspects of customer acquisition, customer conversion, and path dependence. It is recommended for students who are interested in the tourism industry.

A new hotel was completed in a scenic spot in Sichuan. As the operator, Zhou Yu and other employees were transferred to the new hotel to prepare for the launch of operations.

There were many things to do before the opening, and Zhou Yu often cleaned up with everyone in the morning, and took time in the afternoon to think about how to promote the hotel on the official accounts of major platforms. Finally, it was time to enter the online travel platform. Before the whole process of applying for entry, waiting for review, and signing the agreement was completed, Xiaohongshu went viral.

"On the day when traffic surged, there were accounts constantly asking for prices in the backend. At that time, we had not yet implemented online booking channels." According to Zhou Yu's recollection, the boss did not think that Xiaohongshu could succeed at first, and first followed the traditional business processes step by step. As a result, the results of the trial accounts were unexpectedly good.

In recent years, traffic platforms have frequently explored the tourism track with rich content supply, attracting market attention. With the changes in consumer demand, some new tourism products such as customized tours, study tours, and elderly travel have also accumulated considerable popularity on Xiaohongshu and Douyin.

According to the iiMedia Research Report on China's Global Tourism Industry Operation Data and Development Trends in 2023-2024, tourism revenue in the first half of 2023 alone will be higher than the total annual tourism revenue in 2020 and 2022. With the strong recovery of the tourism industry, high-end tourism products such as customized tours have also ushered in a new situation.

Ctrip's recently released "2023 Ctrip Travel Customizer Illustrated Book" mentioned that as of the end of October, the platform's customized demand orders increased by 330% year-on-year, and an increase of 30% compared to 2019. Among them, domestic customized demand orders increased by 270% year-on-year, and overseas demand increased by 42 times year-on-year, recovering to about 80% compared to before the epidemic.

Tourism is a business that revolves around information asymmetry, and this is especially true for the segmented track represented by customized travel. Traffic such as Douyin and Xiaohongshu has created a new scenario for users to obtain consumer information. Suppliers who provide services on the front line have also realized that traffic platforms are new opportunities to directly reach consumers.

1. Obtaining customers through detours

"The company hired me just to build up the customer acquisition channel."

Liu Ran, who was engaged in content operation, switched to a well-known domestic tourism company this year and was responsible for the platform account operation of customized travel projects.

Customized travel is not a concept that has only become popular in recent years. As early as 2018, Ctrip pointed out in a report that my country's tourism industry has entered an era of personalized services dominated by tourists and represented by customization. The industry generally believes that customized travel can fill the market gap of traditional group tours and free travel, and has great potential.

However, all products involving private customization and high customer unit prices cannot avoid the problem of difficulty in acquiring customers. The usual way for companies to acquire customers is to cooperate with OTAs and become suppliers of the platform. For example, Zhou Mo, general manager of the travel service brand Jizhimei, once said in an interview that 40% of the company's customers are acquired through OTA channels, and 60% are spread through word of mouth among customers.

"Ctrip has no shortage of suppliers. The platform has absolute say in order allocation. In the past, we received two orders a day during the off-season. Recently, the tourism market has picked up, and the quota has been raised to five orders."

Suppliers connect the upstream and downstream of the industry. Liu Ran's department has no shortage of experienced customizers. The company itself started out as an airline, hotel and ticketing company, and has abundant local travel agency resources. Under the premise of sufficient supply, the company does not want to be completely "controlled by others" at the juncture of customer acquisition.

"I tried Fliggy first, because the way Fliggy plays is to spend money to buy exposure, which definitely has much more room for maneuver than quota allocation. Now I found Xiaohongshu worth a try, and the actual effect exceeded expectations. As soon as the note data started to increase, more than 100 customers came." Liu Ran told Ginkgo Technology that the company hopes that the customers mined by Xiaohongshu will directly trade on Xiaohongshu, or transfer money to the public and direct traffic to the mini program to place orders. Expanding the customer base is one aspect, and the platform's commission is also one of the reasons why suppliers want to "take a detour."

According to an industry insider, Ctrip's commission is not a pure profit commission, but a commission from the total transaction amount, with a ratio of about 8%, divided by region. In order to control the service fee within the acceptable range for consumers, suppliers usually put profits into other consumption items during the trip. Accepting orders on the platform means that the consumption items of the entire customized route must go through the platform system. Some suppliers will establish cooperation with local travel agencies on their own, and after completing the process in the system, they will go to offline merchants to "reverse the profit" to maximize their profits.

In general, suppliers are trying every possible way to attract private traffic and find ways to acquire customers outside the platform in order to gain a more "free" operating space.

2. Stability vs. Opportunity

Ginkgo Technology mentioned in its analysis of Ctrip’s third-quarter financial report that the entry of traffic platforms into OTA has only formed competitiveness in the areas of cognition and search. Ctrip’s years of industry accumulation have ensured that its moat remains solid.

Similarly, traffic platforms such as Xiaohongshu, as an alternative for traffic diversion, have not yet reached the level of competing with Ctrip in terms of customer acquisition efficiency. For customized travel suppliers, traditional OTAs represented by Ctrip are still a relatively safe choice.

For example, Ctrip’s quota allocation often provides suppliers with a very precise customer base with a definite consumption intention, most of whom have strong consumption capacity.

What impressed Liu Ran most was that a customer contacted by Ctrip specifically wanted to stay in a beachfront villa on Singapore's Sentosa Island, and spent 250,000 yuan just to book a four-night stay. "This is the source of customers that can make a tailor earn over 10,000 yuan a month."

In addition, as a third party, the platform has the credibility to endorse its services. For this type of travel products with high unit prices and complex execution processes, most consumers attach great importance to customer service quality and after-sales protection.

Traffic platforms represented by Xiaohongshu take the route of attention conversion. For suppliers, it provides an opportunity to fight in the traffic arena based on their own abilities.

The "2023 National Day Tourism Report" released by Xiaohongshu shows that during the National Day holiday, the number of travel notes published on Xiaohongshu was nearly 2.5 million, an increase of more than 150% year-on-year; the number of note readings exceeded 2.3 billion, an increase of nearly 2 times year-on-year. In addition to the growth in content volume, the content presentation format has also evolved into a new paradigm in combination with the platform's tone.

The report mentioned that compared with the one-way sharing of travel tips in the past, mutual assistance travel has become a new trend during the National Day holiday, with topics such as "listen to travel advice", "travel whitelist", and "travel mine avoidance" becoming hot topics on the site. This is exactly where content operators like Liu Ran can play a role. Itinerary design, local resources and other customized product "hard power" can be fully marketed on Xiaohongshu, and better communication effects can be achieved with the help of community distribution and interactive mechanisms.

The risks that coexist with opportunities are also very intuitive . Compared with customers on vertical platforms who have clear consumption intentions, there is a risk of customer loss in every link from planting grass to completing the order, and the wasted costs in the meantime are difficult to estimate.

In addition, bypassing a third party and entering a new third party is not a utopia. There are also entry requirements for operating a store on Xiaohongshu. To divert customer resources to private domains such as WeChat, you also need to open corresponding promotion projects. For corporate customers, only by opening the Juguang platform can you make a fuss about investment and leave a WeChat account in private messages.

Although there are certain risks ahead, suppliers are still willing to join the traffic arena. In addition to the ambition to start a new business, it is also out of consideration for preparing for a rainy day at a time when content dominates consumer minds.

3. New Path Dependence

Consumer mentality can be understood as a kind of path dependence. When consumers get used to a certain product or service, the force of inertia makes them repeat and affirm their past choices. For example, when the public space forms a consensus that "first click on Taobao when buying things, and immediately find Meituan when ordering takeout", this path dependence is a manifestation of consumer mentality.

It is very difficult for suppliers to establish their own channels outside of this consumption inertia, unless they seize the position when new paths emerge and gain the privilege of being "seen".

Recalling his own experience in operation, Zhou Yu mentioned why the industry feels that tourism is "more difficult" after the emergence of platforms such as Douyin and Xiaohongshu, because the more channels for information circulation, the harder it is to make money from information asymmetry. "Everyone will compare prices, asking on Xiaohongshu how much this chartered car price is, whether that ticket is too expensive. Once we encounter customers who compare prices, it is difficult for us to do business, so now we are all working hard on content operation, and we will join in if we can't beat them."

Traffic platforms are guided by trends and fashionable lifestyles, trying to build consumption paths leading to various fields. The areas they are exploring are not limited to the tourism vertical, but also e-commerce, local life and other scenarios. The business model of "creating demand" before demand is repeatedly applied.

This model will definitely give participants sufficient positive feedback in the early stages of expansion.

Just as Zhou Yu told us, after seeing the opportunity on Xiaohongshu, he created a personal account outside of work. With his past operating experience, this account, which has no advertising costs and is purely for sharing travel experiences, has more than a thousand followers and several small hit notes in half a year. The data of this account on Xiaohongshu is already at a level that can receive business orders.

Zhou Yu is quite calm about this. She believes that customized travel is the most sensitive to this trend in the tourism industry because the content can best magnify the advantages of this high-end product. However, compared with the "sense of security" given by the fixed process of vertical platforms, it is a "man-made" proposition to get a share of the big traffic pool, and the excellent performance of the early data is not unexpected.

“Because it’s always like this during the bonus period.”

Author: Wang Yelin

Source public account: Ginkgo Technology (ID: yinxingcj), bringing you the best business people and stories.