Image source @ Vision China
"Retire all of them."
When asked by Global Travel News about this year's May Day sales, several high-end travel product suppliers mentioned this word, while Songtsam Group (hereinafter referred to as Songtsam), which had just received a round of financing, politely declined to be interviewed, after having told the media that the annual loss due to epidemic refunds and changes amounted to tens of millions of yuan.
Liu Jianbin, the founder of the ship bar, said frankly, affected by the epidemic, almost all the orders of the Songtsam Peach Blossom Festival in March faced the dilemma of forced cancellation, distributors also suffered heavy losses, and the most expensive cruise ship on the Yangtze River pre-sold on the ship bar - the Yangtze River Explorer sailing time a twist, from March intermittently changed to May, the guests also almost all returned.
This "May Day", the epidemic situation in North China continues to be severe, the willingness of the tourist crowd to travel continues to be low, and most of the high net worth people are locked up. "2022 is more difficult than 2021," said Lin Jianxun, founder of Dermat Travel, which has also contracted its business to the country since the outbreak, saying that its business line has been out of operation since December last year and has not restarted. Before the epidemic, Dermat Travel's polar tours were well known in high-end circles.
Since the outbreak of the epidemic, some of the outbound high net worth individuals have returned to the country, and high-end travel and even luxury travel has become a new growth point for the domestic tourism industry. The Travel Trends Insight report released by Ctrip in conjunction with the World Travel & Tourism Council (WTTC) shows that the daily number of inquiries for customized luxury tours in the first half of 2021 increased by 140% compared to the same period in 2019.
The epidemic presents more of a challenge to high-end travel than an opportunity. Almost every outbreak of local epidemic is accompanied by backorders, while the natural niche and non-standard nature of high-end products make it difficult to make profits through the scale effect, and the heavy service will make them face heavier operating costs than other tourism products.
Missed this "May Day", in front of the difficult to whitewash the business situation, the domestic high-end tourism how to hold up? And with the gradual opening of multi-country entry policy at the beginning of this year, international routes are showing a strong recovery, the future of cross-border tourism after the liberalization, whether the domestic high-end tourism will return to the "standby"? These are the real problems in front of the domestic high-end tourism products, and the time left for them to solve the problem may not be much.
01 Loss of "May Day"
In October last year, Lin Jianxun realized that high-end tourism would face a long winter next.
Since the epidemic in Nanjing in the second half of last year, the domestic travel market has suffered repeated setbacks, with frequent "meltdowns" of cross-province travel. 2022, after the Spring Festival, the epidemic struck again, especially in Beijing and Shanghai, where the situation continues to be severe, and most high net worth individuals have been prevented from traveling, with the travel market experiencing another "cold wave". The travel market is experiencing another "cold wave". According to the latest epidemic prevention policies around the country, more than 20 provinces and cities, including North, Shanghai and Guangzhou, are advocating not to leave the province/city if not necessary.
"The essence of high-end tourism is long-distance travel, cross-province travel meltdown is an important means of domestic epidemic prevention and control, but this also makes high-end tourism market full collapse." Lin Jianxun said bluntly that the choice to take a vacation from the end of last year was a reluctant move and a life-saving policy.
Dermat Travel had hoped to restart operations this spring, but the recurrence of the outbreak has delayed the resumption of operations again and again. However, this allows Dermot to not have to face the pressure of high refunds this May 1.
Liu Jianbin does not seem to be so "lucky". Because of the Shanghai epidemic, Liu Jianbin has been stuck at home for more than a month, and it is not difficult to imagine that the epidemic generated business shutdown, unsubscribe and grab vegetables, nuclear acid as a source of stress.
Liu Jianbin officially entered the distribution of high-end domestic travel products in September 2020. Before the epidemic, Liu Jianbin left an OTA, turned his attention to the domestic cruise market and founded the distribution platform "on board it", mainly underwriting cruise ships on the Yangtze River.
Century Cruises' Century Legend Shanghai-Chongqing 15 days "so many rivers and mountains" long line of products take the high-end route, its time, geographical span of long, the price of up to 18,800 yuan is rare in the industry. Global Travel News has reported that in April 2021, its June itinerary has sold 90% of its beds, and all of its high-class room types are sold out.
The explosion of this product allowed Liu Jianbin to see the demand for high-end domestic tourism products, and with hundreds of B-side distribution channels in hand, the boarding bar began to access a number of high-end tourism products such as Songtsam. According to Liu Jianbin, the overall GMV in 2021 exceeded 60 million yuan, far exceeding expectations.
Around the Spring Festival of 2022, the number of inquiries and sales of high-end tourism products distributed by the boarding bar, such as "New Oriental Train" and "Songtsam High-End Tour", are relatively stable. Liu Jianbin said, after the Spring Festival to the middle of March is a small peak performance, during the period on board the bar sales reached 8 million yuan.
But the pressure also builds up little by little as the order volume rises. Initially affected by the "New Year in place" and the Chongqing epidemic, Century Cruises sailing time has been postponed again and again, I did not expect that with the outbreak of the epidemic in many places still have not sailed; and on board another popular product Songzan, also because of the cancellation of the Peach Festival in March and lost the peak season orders.
The main source of orders for high-end tourism products is basically concentrated in first-tier and new first-tier cities, and the impact of the epidemic since March this year, almost all of the May Day tourism products distributed by the boarding bar could not be made into tours. This epidemic resurgence of the heavy blow, Liu Jianbin's only remaining belief is "hang in there".
02 Domestic high-end tourism is just starting
"Compared to traditional group sightseeing tours, high-end free-range leisure travel will be more popular after the epidemic." So predicted Liang Jianzhang, Chairman of the Board of Directors of Ctrip, in an interview in 2020.
After the epidemic blocked cross-border travel, high net worth individuals began to look for alternatives at home, which somewhat stimulated the take-off of high-end domestic travel. Data from Poor Travel's "2020 Guide for Outbound Travelers to Play Domestic" shows that 83% of outbound travelers transformed into domestic travelers, and even though they can't go abroad, the time and expense users spend on travel remains basically the same; in terms of travel spending, 46.3% of users spend more than 30,000 yuan per year on domestic travel on average.
In this tourism inner circle, in addition to the Yangtze River cruise, domestic luxury tourism train New Oriental Express in the second half of 2021 for a comprehensive upgrade; October 2021 China's first five-star flag high-end cruise ship "Merchants Eden" also officially set sail ...... new and old players have been pushing new new products, originally focused on cross-border high-end travel travel travel agencies or distributors began to increase efforts to open up the domestic market.
In March this year, Songtsam announced a 300 million yuan investment from Zhaoyin International, once again raising the industry's focus on high-end tourism to a high level. However, this does not indicate that the domestic high-end tourism market has reached a mature stage in terms of both product supply and user cultivation.
Fundamentally, high-end tourism competes for the scarcity of products and the ultimate in service.
For example, Songtsam's accommodation products are all located in Tibetan villages with unique natural scenery, and the "secret" hotels created must not only have beautiful scenery, but also become a window to convey Tibetan culture to the world. Therefore, Songtsam will provide exclusive travel butlers in the user experience, who can help guests enter the daily life of villagers in the region and immerse themselves in the local culture according to their specific needs.
Lin Jianxun said that it is difficult to say that a market is a benign market if there is no competition. There is only one "Songtsam" in China, and only when there are 10 or 100 "Songtsam", domestic high-end tourism may be considered to have truly entered a relatively mature period.
On the other hand, even if there is hardware, there is a lack of content that can bring the audience closer to the theme design, local culture and value presentation. "Not all theme tours are high-end tourism, but all high-end tourism has a theme, without the theme is not called high-end tourism," said Lin Jianxun.
Product scarcity and the extreme nature of the service resulting in high customer unit price on user positioning and acquisition also brings many challenges, "it is difficult to do marketing on Shake.
Users of high-end travel are mainly rich and leisurely groups, this part of the user is not high dependence on the Internet, willing to spend money to buy services, and have high requirements for product service and experience. After the epidemic, this trend has not changed much. To find this group of people accurately, it is difficult to dominate with 2C's logic of spreading a wide net of customer acquisition, and high-end travel's customer acquisition and pre-trip services still rely on a large number of offline scenarios.
Chia Xiaoxiao, Managing Director of CBI, who led the investment in Songtsam, has publicly stated that Songtsam offers exactly what CBI's private banking clients are looking for, "Our high-end clients have a large demand in travel, but have been unable to find a suitable partner because it is difficult to guarantee the quality of integrated services. A fully closed-loop chain like Songtsam, where all hotels are self-built, constitutes the consistency of the entire experience service, which can fully meet our needs."
In fact, the synergy between Songzan and CBI in the customer acquisition business is still a To B logic. Liu Jianbin used to work at Tuniu and has a more specific understanding of the difficulty of To C customer acquisition, so Get on board bar is mainly oriented to B-end distribution as well, focusing on providing a wide range of high-end travel products for OTAs, travel agencies and custom tour agencies, etc.
03 Inside the volume is a kind of helplessness, and the international connection is the new era
Although the rapid growth of domestic high-end travel after the epidemic has repeatedly appeared in OTA reports, Lin Jianxun admits that the epidemic was not a development opportunity for high-end travel, but a devastating blow. "High-end tourism itself is to go farther, few people designate domestic tourism as high-end tourism, from outbound tourism back to domestic tourism, from domestic tourism back to peripheral tourism, this is a helpless choice."
This helplessness is also reflected in De Mai Travel. In the past when the main focus of cross-border travel, high-end travel advantage is to provide information services such as visas, transportation and accommodation arrangements, but in the domestic market these advantages are gone; and to go down to the field for resource integration to generate incremental value, it requires huge financial and material resources, for the general high-end travel players is obviously unaffordable.
However, cross-border tour players and the return of high net worth clients to the domestic market are still of great importance.
On the one hand, similar to this group of high-end outbound travel "old players" to the domestic tourism market "new players" in the process of transformation, will be in the foreign market experience and domestic industry exchanges, for the development of domestic high-end tourism to bring a new way of thinking.
For example, after Dermat Travel returned to the domestic market, the previous "travel with famous artists" travel project is completely replicated in the domestic products, as before with Liang Wendou peer visit Peru, Spain and other places, the domestic high-end tour close to the Chinese humanities environment, in accordance with the standard of outbound travel to launch a series of cultural and historical theme travel projects, including travel to study the Central Plains, strong travel Chang'an, travelers travel with professional instructors in the field, in-depth connection with traditional Chinese culture.
On the other hand, customers looking for "alternatives" in the country at the same time, but also the previous demand for high-end outbound travel experience of high quality "back" to the domestic, customer education of the market is always driving the domestic product iteration upgrade.
Limited by the lack of awareness of domestic practitioners of high-end tourism products, the domestic tourism market has long seen low-priced tours, marketing subsidies and other games, leaving the tourism market supply chain in a state of vicious competition. Liu Jianbin cited an example, the Yangtze River cruise tickets for several hundred yuan a are commonplace, and when the tickets are sold to 5,000 yuan - 20,000 yuan / piece, began to take the boutique route after opening up a more valuable group than the traditional low-cost tour, "even, the products that can really meet the needs of users, the higher the price the better the sales."
Lin Jianxun reluctantly said, "Now the domestic market is still a large gap in the unit price compared to the cross-border travel market, I hope the price can be made higher, but now the product hardware and software is not able to match it."
For high-end travel players, a faster opening of cross-border travel is what they are looking forward to.
The tourism "14th Five-Year Plan" mentions the need to promote inbound tourism and steadily develop outbound tourism in an orderly manner under the premise that the international epidemic is effectively controlled. The opening report of Ctrip and WTTC also shows that the number of domestic luxury tours will increase in the short term, however, this growth trend is expected to drop slightly as the epidemic prevention restrictions are relaxed and consumer savings decline after the unsealing. And for now, the outlook for the global high-end travel market remains optimistic, with luxury travel at $945.6 billion in 2019 and expected to reach $1.12 trillion by 2027.
Lin Jianxun pointed out that only in cross-border travel, high-end tourism products have more room to play, whether it is domestic tourists going outward, or foreign tourists inflow, for high-end tourism is extremely powerful boost.
"When the domestic quality tourism resources are seen by global tourists, domestic high-end tourism can have further market growth; and the domestic re-opening of full interoperability with the international market is the new era of high-end tourism market."