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Introduction
This report aims to promote a new travel agency, which is a subordinate travel agency to China Travel Service. China Travel Service is a short term of China Travel Service Head Office Co., Ltd, which belongs to China National Travel Service (HK) Group Corporation. Now China Travel Service Head Office (“CTS”), China Travel International LTD.(“CTI ), China Merchants International Travel Co., Ltd(“CMIT”), China Travel Service (Hong Kong) Limited (“CTSHK”) and the oversea branches combine into one company of travel service plate, which is titled as China Travel Service Head Office Co., Ltd. (China Travel Service).
Although it firstly started as travel agency that provided travel service for oversea Chinese, foreigners in Hong Kong, Taiwan and Macao, now, with the efforts of generations, it already developed itself to be a comprehensive international travel agency. The main business of China Travel Service Head Office Co., Ltd includes outbound travel, inbound travel, domestic travel, business travel, MICE, visa application service and flight tickets reservation. For now, China Travel Service Head Office Co., Ltd will achieve the goal of establishing 8 plate companies, 150 subsidiary companies, 500 wholly-owned agents domestically and globally (China Travel Service Head Office Co., Ltd). After merge with CTS Group in 2007, China National Travel Service (HK) Group Corporation has been one of the top lists in china tourism industry, which is with the largest domestic operation scale and several millions of tourist clients annually.
The business of the company is very exhaustive. It can provide almost all the kinds of travel service. However, with the needs of new business, we decide to open a travel agency, which provides the same qualified and professional travel service but with some specialties. The name of the travel agency is titled as "Explore Europe" (EE) for now.
Target Customer
As a travel agency, it usually provides the travel product and service, such as the flight ticket, recommendation, sightseeing arrangement and etc. The travel agency, like China Travel Service Head Office Co., Ltd, not only has department in the local country, but also has the travel agents and cooperation companies in other countries. The modern travel agency can be concluded to start from the establishment of Thomas Cook, which set a chain of agent in the late 19th century. The first travel service is provided for 570 passengers transported by the Midland Countries Railway (Johri, 2005)
Usually, there are mainly two kinds of travel for Chinese people to oversea countries, which are the official travel and private travel (Li and McCleary, 1996).
Official business travel is the business trip assigned by the government organization or the commercial organization. It is usually paid by the organizations. Private travel is the most common travel type nowadays. People use their holiday to travel around for relaxing and exploring the different in the world. There is another new kind of travel emerging in the new circumstance, the student travel. Students travel is the new type of travel. It includes the short-term travel that the students go to other countries to see and experience, which can be classified the same type as the private travel. It also includes the students who are studying in foreign countries and with need for travel service.
However, with the development and growth of the economy in china, it is not a life dream any more for the people to go for a trip in a foreign place. With the increasing travel experience, the tourists are becoming more and more sophisticated. The regular travel service is not that attractive and competitive any more as the old day. They have more requirements for the travel agency. Besides, with the huge market and the consumption potential, every travel agency wants to participant into china travel industry to pursue a gold opportunity to develop.
Therefore, with the increasingly intense competition and picky clients, a new travel agency with specialties and unique enters into the market. The target market of "EE" travel agency is set to be a niche market. The "EE" travel agency provides travel service for the tourist from china to Europe and the Chinese people who already in Europe with the need of travel service, which mainly include the Chinese student studying in Europe. The travel service includes the travel package, visa application service and flight ticket reservation service. However, the unique feature of the "EE" travel agency is it provides the travel service with themes.
Environmental and Competition Analysis
Economic Environment Analysis
With the application of the open market policy, Chinese has developed to be a new country with powerful economy. The economy has developed at the speed that amazes the whole world. The GDP (Gross Domestic Product) in china keep increasing by more than 10% for years. As the table 1 showed, the GDP in 2005, 2006 and 2007 is respectively 10.4%, 11.6%, 11.6%. Even in 2008, with the negative influence of the global financial crisis, the growth rate of GDP is still up to 9.0%. (World Bank). At same year, with the blow of the economic recession, the GDP growth rate in some counties especially the developed countries in Europe is negative. Another indicator can imply more clearly about the consumption ability in china. The GNI (Gross National Income) also increases very dramatically for the past four years. The GNI in 2008 is 3, 888, 08 million USD. With enormous value of external debt stocks and foreign direct investment, china has been the country with the fast increasing economy in the world. With the total value of GDP, 4,909,280 million USD, china rank as the third top in the world, just following the United States with 14,256,300 million USD and Japan with 5,067,526 million USD (World Bank)
Table 1: Economy Indicators in China from 2005 to 2008
2005 2006 2007 2008
GDP (million) $2,235,910 $2,657,880 $3,382,260 $3,382,260
GDP Growth Rate 10.4% 11.6% 11.6% 9.0%
GNI (million) $2,273,280 $2,639,330 $3,179,860 $3,888,080
External debt stocks
(% of GNI) 12.6% 12.2% 11.0% 8.7%
Foreign direct investment, net inflows (Million) $79,127 $78,095 $138,413 $147,791
Source: World Bank
Oversea Travel Trend
The fast increasing and powerful economy guarantee the improved life quality in china. In this circumstance, more and more people seek the opportunities to enjoy a trip in oversea countries. The interest and eager comes from both the Chinese traditional culture and the open information from outside. Travel has always been a good way to gain life experience, knowledge and sophisticate for Chinese people. However, not so many people have the chance to realize it especially to travel overseas by the limitation of political policy and financial shortage. Thus, when the limitation does not exist anymore, the people are willing to see the world in person.
Besides, with the open policy since 80s last century, exotic culture entered to china. The information exchange with foreign countries gives the people chance to know the difference in tradition, value and view. That difference attracts people to experience. So the oversea travel becomes a new popular trend in Chinese tourism industry.
Current Market and Competition Analysis
For the past four years, the oversea travel population keeps increasing positively. Especially in 2007, with the bloom of global economy, the over sea travel of Chinese annually increased 18.6%. Most part of overseas travel in china is private travel. The general percentage of private oversea travel can occupy over 83% of the total oversea. The private oversea travel, as the main target customer of the "EE" travel agency, implies a very large potential market for us.
However, the potential does not stop here. Although the population of the people who travel in foreign countries privately is around 42 million, which is already more than the whole population in some countries, it only occupies around 3.2 % of the total population in china. So for the travel service industry, the real potential is the unexplored market. With the growth rate of private oversea travel at a fast speed, our agency does not just compete with other participants; we are sharing a big and growing "cake".
Table 2: Chinese Oversea Travel Statistics from 2006 to 2009
2006 2007 2008 2009
Oversea Travel
Population 34520000 40950000 45840000 47660000
Growth Rate 11.3% 18.6% 11.9% 4.0%
Private Oversea Travel
Population 28800000 34920000 40130000 42210000
Growth Rate 14.6% 21.3% 14.9% 5.2%
% of oversea travel 83.4% 85.3% 87.5% 88.6%
Source: National Bureau of Statistics of China.
Related Policy
Oversea travel liberalization
The related policies in china liberate the oversea travel step by step. In the past, people are not allowed to go abroad for private travel, mostly with the consideration of politic. Only a few of governmental officers and people who have special authority have the chance to go to foreign countries.
However, with the application of open policy since 80s last century, the oversea travel became much easier to do. In 1983, the private oversea travel was officially permitted (Bailey, 1994). Then the policies further liberated the travel to Southeast Asian areas organizated by travel service agency and the distance is furthered to United States and Europe in 1993 (Bailey, 1994).#p#分页标题#e#
There are also some other policies related to the liberalization of private oversea travel. For instance, the application for a private passport took a very long time. And with the new policy in 1995, people can get the private passport in a month. And the application time is further shorted to be 10 days. (Ministry of China's Public Security, 1997) Another policy that liberates the oversea travel is the relief of the limitation to get foreign exchange from the bank. Now people do not need authority and complicated paperwork to exchange money in the bank.
Promotion Advantages
Brand and reputation advantage
China Travel Service Head Office Co., Ltd., as the travel agency in china with the longest history and largest business volume, absolutely has the brand and reputation advantage. With the consideration of the safety and leisure, people are inclined to choose the service with a good reputation, which guarantees the service with quality. In this manner, the "EE" travel agency, as the subsidiary of it, naturally gains this advantage.
Besides, the China Travel Service has successively joined the international travel associations like CATS, PATA, IATA, USTOA, ASTA, and ICCA. The network in that international travel association can help the "EE" travel agency build up the relationship with the tourism industry.
Unique travel service
To survive in the tourism market with increasingly intense competition, the "EE" travel agency has to be unique from other thousands of travel agencies in china. The specialty with "EE" travel agency is the travel service associated with event theme, which includes the cultural event, sports event and business event.
Cultural Events (include Festivals)
Cultural events are those events associated with music, galleries, literature, architecture, history, festivals, cultural traditions and any other activities related to artistic performance.
Sports Events
Literally, sports events are the events with theme of sports. As the very important component of event industry, sports events are introduced into the promotion and development strategy by a lot of tourism destinations. Sports events encompass the full spectrum of individual sports and multi-sport events such as Olympic, Commonwealth and Masters Games. To category further, the sports events can be divided into: mega events that are awarded after competitive bidding. The most well-known example is the Summer Olympic Games; calendar events, in which no bidding required, are commercially successful events; one-off events that are awarded after competitive bidding, substantial television rights interest nationally and internationally; showcase events that are generally awarded after competitive bidding, which have the potential to boost sport development, provide the bidder country with a good opportunity of winning medals and improve the image overseas. (Allen, O'toole & Bowdin, 2006)
Business Events
This type of events usually has a strong focus on the theme of business and trade. Business events usually include conference, exhibitions, incentive travel, and corporate events. Sometimes the business events are grouped as MICE (meetings, incentives, conventions and exhibitions) (Allen, O'toole & Bowdin, 2006).
Conference: (1) Participatory meeting designed for discussion, fact-finding, problem solving and consultation. (2) An event used by any organization to meet and exchange views, convey a message, open a debate or give publicity to some area of opinion on a specific issue. No tradition, continuity or periodicity is required to convene a conference. Although not generally limited in time, conferences are usually of short duration with specific objectives. Conferences are generally on a smaller scale than congresses. (CIC 2003)
Incentive Travel: A travel reward given by companies to employees to stimulate productivity. (CIC 2003)
Convention: An event where the primary activity of the attendees is to attend educational sessions, participates in meetings/discussions, socialize, or attend other organized events. There is a secondary exhibit component. (CIC 2003)
Exhibition: is "a presentation of products or services to an invited audience with the object of inducing a sale or informing the visitor. It is a form of three-dimensional advertising where, in many instances, the product can be seen, handled, assessed by demonstration and in some cases even smelt and tasted." (Exhibition Liaison Council)
Besides, according to Rogers (2003), the incentive travel, client entertainment, staff entertainment, meetings and conferences can be involved in the term of "corporate event".
Advertising
For the tourism, the mostly common used advertising media include TV commercial, radio, newspaper, magazine, post mail, internet and etc. With the consideration of the features of our "EE" travel agency, we use the following media as our advertising methods to do the promotion.
Newspaper
It is one of the mass media that can reach most of people. And the delivery time is very short. Compared to other mass media such as TV commercial, newspaper is less expensive.
Magazine
The audience of magazine is also very large and it can reach different classification of customers. Besides, since our travel service is associated with events, the advertising can be posted on the related magazines. The types of the magazine automatically classify the customers into different group. For example, if we host a tour with the theme of French Open, we can post the advertising on the sports magazine of tennis ball or the magazine that publishes related news.
Besides, the magazine has more space and better color reproduction than the newspaper. So we can post the advertising right behind a profile of a tennis ball star player or a touching related story, which can be really impressive and memorable.
Tour brochure
Most tourists rely heavily on promotional literature in lieu of direct experience of place (Echtner & Ritchie 1991). The tour brochure, as one of the most traditional and most effective promotional literature, always plays a leading role in the tourism. A semiotic analysis of these tour brochures uncovered 15 themes commonly used to promote the area (Young 1997) as the table 1 below showed.
Table 3: Brochure Themes Used to Promote Tourism
1 Natural beauty
2 Grandeur
3 Adventurous
4 Safety
5 Comfort
6 Pristineness
7 Tranquillity
8 Uniqueness
9 Exotic
10 Ancient
11 Scentific Value
12 Famous
13 Authenticity
14 European history
15 Aboriginal culture
Source: Yong, M. (1997) The social construction of tourist places
Direct Marketing
Compared to mass media as the promotion technique, direct marketing is more specific on the audience of the target market. In this manner, the target customer feels more special about themselves and more respectable by the travel agency. Direct mail is the best known method to do the direct marketing, which is extensively used in tourism industry (Sethi, 1999).
With a personalized mail or a brochure with the introduction of the travel service, it can bring an excellent result for the travel agency. Direct mail is one of the promotion activities type with fastest grow in nowadays tourism industry (Sethi, 1999).
Public relation
This promotion technique is applied based on the consideration of the wide network of the parent company. With the network and public relations that inherits from the parent company, the "EE" travel agency can easily to build up reputation in the industry.
Besides, because the target market of the "EE" travel agency is the tourists who are interested in the particular event, so the relationship between the agency and the event organizers is especially important. However, to manage the public relation is not just to keep the travel agency exposed in the publicity. It has to make the employee and the agency in contact with the public. All the related issues, such as the promotional literature, staff working style and uniforms, are managed to gain the maximum publicity and goodwill (Sethi, 1999).
Conclusion
This promotion report for the new opening travel agency, “Explore Europe”, aims to gain the maximum benefit for the company. However, the entire promotion proposal base on the current research and discussion. If there is anything unexpected in the promotion campaign, the proposal should be adjusted to be more suitable for the reality and the goodwill of the company.
Reference
Allen G, O’toole J. & Bowdin, W. (2006) Events management. Amsterdam: Elsevier Science & Technology.
Bailey, M. (1994). China outbound. EIU Travel and Tourism Analyst, vol.6, pp 9.
China Travel Service. China Travel Service Head Office Co., Ltd. Accessed on 2nd August 2010 at <http://www.chinatravelsolution.com/>.#p#分页标题#e#
CIC, the Convention Industry Council.
Echtner, C. & Ritchie, J. (1991) The meaning and measurement of destination image. Journal of Tourism Studies, vol. 2, pp 2- 12.
Exhibition Liaison Council.
Johri, K.P. (2005) Encyclopaedia of tourism in 21st century. New Delhi: Anmol Publications Pvt. Ltd.
Li, Lan & McCleary, K. (1996). The giant awakens: Chinese outbound travel. Australia Tourism Research, vol.13, pp 59-67.
Ministry of China's Public Security. Accessed on 2nd August 2010 at <http://www.mps.gov.cn/n16/index.html>.
National Bureau of Statistics of China. Accessed on 2nd August 2010 at< http://www.stats.gov.cn/tjgb/>.
Rogers, T. (2003b). Business tourism briefing: an overview of the UK's business tourism industry. London: Business Tourism Partnership.
Sethi, P. (1999) Tourism: the next generation. New Delhi: Anmol Publications Pvt. Ltd.
World Bank. Accessed on 1st August 2010 at <http://data.worldbank.org/indicator>.
Young, M (1999) The Social Construction of Tourist Places. Australian Geographer, vol. 30, no.3, pp 373- 89.
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