February 27, 2013

Exclusive Travel Sites Hit The Sweet Spot For China’s Globetrotting Elite

HH Travel’s Next “Round-the-World” Trip Will Cost 1.18 million Yuan (US$189,287)

HH Travel's "Around the World in 80 Days" package costs over 1 million yuan

Accompanying the rise (and rise) of overseas travel among wealthy Chinese has been an increase in the number of travel sites offering exclusive — and often jaw-droppingly expensive — tour packages. Expanding from mass-market sites like Ctrip and Baidu-backed Qunar, specialized, niche offshoot sites like ultra-high-end Zanadu and Africa-focused Quafrica have looked to capitalize on growing demand for international travel that skips the luxury boutiques and follow-the-flag tour groups. The best part, for these sites, is that price is virtually no issue for many of the customers now spending lavishly on independent itineraries or small-scale group travel.

No longer driven by a single-minded focus on spending the majority of their time overseas shopping, some wealthy Chinese tourists — often on their fifth or sixth international jaunt — are spending more on accommodations and experiential travel, a development on which a handful of niche travel e-commerce sites have been quick to pounce. Most recently, one player, HH Travel, has made headlines owing to very high average client spend — 100,000 yuan (US$16,041) per person in 2012.

Acquired by online travel juggernaut Ctrip last May, HH Travel has been able to effectively screen potential travelers from Ctrip’s massive 60 million-strong member database, identifying and reaching out to those who travel at least five times per year in first class. Courting a very niche demographic, HH Travel has gained notoriety for its high-priced globetrotting itineraries, which regularly sell out despite eye-popping price tags. As HH Travel president You Jinzhang told China Daily this week, the company’s 660,000 yuan ($105,939) global tour package sold out in 30 seconds last year. Right now, HH Travel is promoting an exclusive “Around the World in 80 Days” package, which will go on sale on March 18, limited to 10 buyers and priced at 1.18 million yuan ($189,287), nearly 50 times the average disposable annual income for Chinese urban residents in 2012. A similar package offered last year at a price of 1 million yuan sold out in only 17 seconds.

Luxury e-commerce sites like Quafrica.com are hoping to take advantage of "France Fatigue" among seasoned Chinese travelers

Other pre-packaged deals available on the site include an eight-day “Life of Pi”-inspired trip to India (42,500 yuan, $6,818), an eight-day cruise to the Middle East (82,000 yuan, $13,154), and a two-week South America adventure (199,000 yuan, $31,923).

Though HH Travel attempts to customize packages for individual travelers or lump like-minded tourists together into small groups, the jury is still out whether China’s well-heeled traveler is more interested in standardized offerings or bespoke agendas. While HH Travel tells China Daily that more than 60 percent of its clients bought standard packages in 2012 and only about 20 percent requested personalized changes, smaller companies like the Shanghai-based travel agency My Tour Traveling Consulting said it builds itineraries from the ground up.

What is clear, however, is that luxury travel sites are better off focusing on individual travelers this year than previously lucrative government junkets. While this could cause short-term pain as travel sites lose out on these easy sales, it will likely pay off in the long run. As Zhao Huanyan, a senior researcher at the Tourism Research Institute under the Shanghai Academy of Social Sciences, told China Daily:

“It’s not the best time for China to promote the luxury travel market judging by the big economic trend right now, especially given the fact the central government is fighting corruption. In China, junket tours account for a large percentage of the country’s high-end market.”

Business & Finance / Lifestyle / Travel & Leisure
Tag: china, china luxury, chinese, ctrip... , More
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