Grapevine and Poison ivy

Dear Reader,

Last week I got an inquiry on LinkedIn from a concerned British hotel owner saying “I have been told on the hotel grapevine that China has stated that citizens are not allowed to travel abroad for leisure until June 2022?”

My answer read like this: “This grapevine seems to be rather an poison ivy! The Chinese government has stated several times that they support the restart of international tourism, and bubbles for instance with Hong Kong are supposed to start soon. As we are talking, about 500,000 Chinese are traveling every month to Macau without any quarantine.

Also, for example, a major short-rental company (you know which one) just yesterday told me that they reckon for Japan and South Korea to restart business with Chinese guests in Q3 2021.

President Xi is not facing elections, but still, he has to keep the top 10% of the society happy, and international travel is part of that happiness. The restart will happen when the destinations are seen as safe again, it is up to us when Chinese start to travel again.”

It is interesting to see that even at a time when everybody in Europe is craving for a trip across the border, be it for urgent business or family matters, or be it to get away from it all during a holiday, many still believe that the affluent Chinese could be any different. Of course, we all want to feel relatively sure that no harm can come from the exposure to other travelers and new contacts in the destination, but if this precondition is met, off we go! The travel bug bit the Chinese two decades ago and even with domestic tourism gaining some more prestige during the period of closed borders, international travel is still part of the consumption pattern for everybody in China who can afford it.

At the same time, many DMOs and NTOs are following a policy of “working with the traditional markets” for 2021 rather than using the opportunity to use the crisis to develop policies for access to new markets, both in terms of geography as well as in terms of the purpose of visit or level of spending. Both the pledges for a new, more sustainable tourism and the memories of the problems of overtourism, seasonality, and low margins coming with the “traditional markets” seem to have been forgotten. The strategic advice “Never let a good crisis go to waste”, given by Machiavelli and popularised by Churchill, obviously has not reached them.

Many destinations had bad experiences with the Chinese source market before the pandemic, getting huge numbers of arrivals, however staying only for a short time and spending – except for some luxury travelers distorting the averages – less than other markets on accommodation or local food, with their tour operators forever on the lookout for a lower price. The consequence, however, is not to shun this market, but to provide services and products for the growing part of the source market willing to spend more and to stay longer if only the right offers are made, fitting their specific needs.

Result: Those companies and destinations, which make good use of this opportunity now to understand the market and to prepare for it accordingly, will end up high on the list of priorities of the right kind of Chinese visitors-to-be, with the first satisfied customers spreading the word to their peers. If you took the trouble and the time to read this editorial up to here, I am sure you belong to this group of entrepreneurs and managers. Let’s get it done.

Best wishes to all our readers, as always, from Prof. Dr. Wolfgang Georg Arlt and the COTRI Weekly team.

PS This edition is the last one produced with the help of our faithful team member Thi Chau Anh Pham. Everybody at COTRI Weekly thanks her for her diligent and successful work and wishes her all the best for the future! Because of the handover and the May holiday, the next edition of COTRI Weekly will be published on May 11^th, 2021.

The video version of this editorial is now also available on COTRI YouTube Channel.

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