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How to be a survivor: 5 Strategies from Chinese travel tech giants

07/31/2020| 5:17:33 PM|

Trip.com has invested in 66 companies using their new RMB 100 million venture fund, covering everything from hotels to airlines, big data to catering.

Prior to the crisis, China was the world’s top source market for travel, with 159 million outbound trips in 2019. With air transportation restricted, China saw air travel plummet more than 54% in the first quarter of 2020.

While China has gradually allowed domestic air travel to resume since early April, about one-third of Chinese travel agencies have gone out of business, and the industry had already suffered RMB 1 trillion in losses. 

Here are the five strategies that emerged from these Chinese travel companies’ relentless pursuit of survival: 

1. Pre-sales: Lock in travel demand

Trip.com’s (previously Ctrip) executive chairman, James Liang, became a celebrity. He holds a pre-sale “Boss” livestream every Wednesday evening on WeChat and Trip.com. Domestically, he has traveled to 17 provinces and 43 cities, covering more than two-thirds of China for his livestreams. 

These livestreams generated RMB 26.9 million in gross merchandise value for Trip.com, with 2.5 million viewers tuning in on average for every one-hour session. In the first quarter, these “Boss Livestream” marketing events have generated more than RMB 600 million in revenue.

2. Cloud Tourism: Bringing travel into audiences’ homes

Trip.com also engaged well-known talk show hosts, such as “Village Chief” Li Rui, to whip up interest in the various locales that they promote. By having customers enjoy these sights and sounds from the comfort of their own homes, Chinese travel tech giants capture consumer awareness and uphold their status as travel providers until people can book flights again.

3. Curate niche products: Catering to specific interests

Chinese travelers are increasingly focusing on health and wellness in their leisure trips. Self-guided tours to city fringes and natural, scenic spots are picking up in popularity, and camper van itineraries are gaining traction among Chinese families with children. At the moment, since they can’t travel overseas, Chinese families are exploring their own country. Identifying the demand in this market, Chinese travel tech giants are curating new travel products based on the changing habits of the Chinese traveler.

4. Diversification: Expanding cash flow channels

Trip.com has invested in 66 companies using their new RMB 100 million venture fund, covering everything from hotels to airlines, big data to catering. Other travel tech companies have pivoted to other industries, such as alcoholic beverages, food products, and mattresses.

5. Recovery Campaigns: Strengthening business partnerships

Chinese travel tech giants have reached out to their partners during the crisis to maintain confidence in travel industry’s recovery. Trip.com launched a Tourism Revival V Plan, a USD 500 million campaign that engaged more than 100 tourism bureaus and organizations. Meituan, Tuniu, and Tongcheng also followed suit with recovery campaigns of their own. COVID-19 presented an opportunity for them to garner support for their promotions.

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TAGS: Trip.com | James Liang | livestream
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