Meet our panel:
- Richard Andrew, Managing Director, SEA & AU, Eternity X
- Nik Yazmin Azman, Chief Commercial Officer, Malaysia Healthcare Travel Council (MHTC)
- Ann Chong, Managing Director, Malaysia, LEWIS
China’s Appetite For Travel
We start our discussion by taking a look at insights into the Chinese traveller. China has been ahead in terms of re-opening up businesses, schools and even entertainment venues. Shanghai Disneyland welcomed visitors for the first time back in May with safety measures put in place.
Even when movement restrictions lift and borders start to open up, is travel going to be a priority for people? And if so, what are the factors that affect where Chinese travellers go and why?
Richard: To touch on your point about Shanghai Disneyland, I think it’s a really, really interesting topic of discussion. As you’ve mentioned it’s reopened back in May and it was a real focus for the world in terms of easing of restrictions. And the reopening actually represents a really good test case for both companies and governments around the world.
Everybody’s very eager to get the economy back up and running, but we need to be very, very conscious about how this gets them out. So, China can really show the way forward for brands and for governments and get some insights. With the reopening there came massive restrictions – capacity was taken down to about a third and they deployed different counter measures for both safety of visitors and employees. All of the restrictions taken into account, there was still a huge demand for ticket sales. It didn’t deter would-be visitors and it’s a great case for the rest of the world.
The number one action people wanted to take after the restrictions was spending time with friends and family, number two was eating out and shopping and number three, was travel. So after being locked up for so long, there was a sort of demand and aspiration to get out there and travel.
We worked with Fliggy, which is an OTA travel agent in China, and there was a survey done asking respondents when will they be prepared to travel again. And this survey was done held in May. So within three months, 56% of the respondents said from a consumer standpoint, ‘I’d be willing to travel’ and ‘I really want to travel’.
The industry itself was slightly more reserved in their responses – between the three to six month mark. So what we’re really seeing is there’s a lot of confidence and a lot of aspiration from both a consumer standpoint and from a business standpoint to get back out there and start traveling.
Which type of travel will recover first according to your insights on the Chinese traveller?
Richard: This is also really interesting insight and it’s very natural based on human behaviour. 50% of respondents said they’d like to look at short trips within the province and test the waters. It’s all about building that consumer confidence. It’s all about building the trust back in this sector.
And 32% were very, very bullish saying that outbound travel would definitely be on the agenda. We’ll go into the different types of destinations later, but it’s much more looking at short haul destinations. So how can we look at the Southeast Asian markets as travel partners to create these travel corridors.
Who will we see as the first wave of travellers or ‘early returns’ from China?
Richard: Due to the fact that Covid-19 severely impacted elderly people and people with underlying health conditions medical conditions, it’s no surprise that the early returns are young people, those without families or dependants. We really see this sort of audience segment as experimental, or the most experience when it comes to travelling. These tend to be young, single, usually middle class and typically from Tier One cities in China and are frequent, experienced travellers.
Impact of Covid-19 on Travel & Tourism Businesses
What trends are we seeing among businesses in the industry?
Richard: From a business standpoint, the impact, we’re seeing in China is – like most of the world – consolidation and cost savings. We’ve seen shifts of diversifying or services such as restaurants moving into the takeaway business, the food delivery business has skyrocketed, and we’ve seen offline stores accelerate their shift to digital using live streaming to sell.
Trip.com, one of the largest OTA in China launched a plan to book for the future – it’s pre-selling tickets, pre-selling holidays in anticipation of the return. Airlines have been very proactive and offering early booking discounts. Some have also issued travel passes so you pay a lump sum and you have unlimited travel through certain periods of the year
We’ve seen even government policies adjusting. In some provinces, they’ve released 2.5 day weekend to encourage people to get the travelling again.
Yazmin: From a business perspective, I’ve always likened this to an Amazing Race Roadblock. You’ve got a team that’s ahead and they’ve been ahead for a while, and now they’ve hit a roadblock. Suddenly, they’re not ahead anymore. Everyone’s had to come to a standstill and reassess. This is where you see natural talents come through – people who are doing things well, those who have had gaps and have time to fix it. It sort of resets everything for everyone.
The reality when it comes to the challenges surrounding marketing travel – it’s one thing that people are now afraid to travel, we don’t fully know what the consumer psyche is going to look like yet. I think the full impact of Covid-19 hasn’t really come through. On our side, we’ve started to commission reports to study how consumers mindset may have changed. But it’s a guessing game right now.
However, within the travel sector, medical tourism would be the least impacted because people still needed healthcare. So the industry is expected to bounce back the quickest because it’s a consumable that is necessary.
The challenge for us was to keep things warm, to continue to remain relevant when people can’t come to us to seek the treatment they need at this point of time. We did this with a campaign called the Healthcare Marvel. It’s a delicate balance that we have to strike – on one hand, we want to create the awareness, but on the other hand, we have people wanting to come but our doors are not open yet.
The healthcare sector traditionally has been the least disruptive and slowest to move. But to reassure patients, just because they cannot come to us, it does not mean that we do not care about you. So, a lot of our doctors and hospitals have implemented tele health measures to make sure patients are still being taken care of.
The challenge the medical tourism industry faces today is its nature of commercialism. We now have the opportunity to prove to our patients that it’s not about the money – we can’t charge you right now but we still care about you and this is creates a level of trust.
Lockdown and restrictions are slowly beginning to ease and there was one particular theme park outside of Asia that drew flak for reopening. How can brands deal with this type of negative press and is there such a thing as too soon to resume business?
Ann: Well, I think the, the first thing I need to actually point out is that collectively, in this session, and this group, the first thing on all of our minds about this session is for people to take safety in high regard. Whatever we are sharing here with regards to the marketing efforts and having to lobby for trust and gain. It’s not with disregard to people safety.
The second point to make is when we are doing things like reopening and considering all the factors, everyone must work together in compliance with the recommended standard operating procedures that the experts and the scientists telling us to take.
While economic factors play an important role, it’s even more worrying to have second waves and third waves.
Going back to the statistics that Richard shared, it corresponds with research done by the IATA on passenger feedback. About 66% of passengers are less enthusiastic about leisure and business travel post-pandemic. Most of them would wait for the pandemic to completely subside before deciding on travel.
Some of our clients like Qatar Airways have explored other revenue streams through cargo ferrying, for example. Some hotels have also opened up their rooms or venues for other things like photography and shoots and charging rentals for that.
Like Yazmin said, we’re living in dynamic times and adaptation and flexibility is what’s required in marketing regardless of the industry. Digitisation is very important across all facets of business – if it was not on the table for consideration before, it’s going to become the new normal and people will have to accept that.
On addressing the issue of whether a business should open or not, that’s a broad level debate. But generally speaking, put safety first as your priority before acting.
For more insights for your business during this time of uncertainty, visit teamlewis.com/greatinflection. You can also read part two of our Ask LEWIS recap here.