Over the next few years, how will the high-end tourism market in China evolve around the upcoming adventure travel segment?
Published on June 5th 2016, Hurun Report’s (胡润百富) annual study about Chinese luxury travelers displays a shift in wealthy traveler expectations. Indeed, whereas leisure travel was the most popular travel theme in consumers’ minds for the last three years, they are now seeking more and more for adventure-themed trips. Among the most appealing themes that emerged from the study, global travel and polar exploration are forecasted to be the top trends for the next three years. The report also shows an increasing popularity of luxury travel agencies and customized travel services, which gravitate towards more affluent travelers. Regarding accommodation, boutique hostels and cruise tours rank first and second for alternative modes of accommodation during trips.
Meeting the requirements of the high-end tourism market in China is crucial for firms operating in a market that has already reached CNY 15.000 billion as of 2017, or approximately $223 billion. As a market research company specialized on Chinese market, understanding the behavior of Chinese tourists is one of Daxue Consulting’s fortes. We recently met with Sally Wang (王晓红), founder of Jiyi Polar Cruise (极意, the Chinese name of the agency evokes the idea of providing great service that allows the client to enjoy the experience to the fullest), which specializes in providing customized polar trips and other travel services around polar areas.
“Customized tours and uncommon destinations are the current trends on high-end tourism market in China” Sally Wang, Jiyi Polar Cruise极意.
As the Chinese partner for eight of the world’s largest polar cruise companies, Jiyi Polar Cruise’s mission is to “offer the highest quality for the best value” and is known for their motto “Do what you love.” Through her testimony, Sally Wang shares with us her expertise on the market, her vision of the sector, as well as her feedback on the process of entrepreneurship in China.
Sally Wang (王晓红) originally conceived the idea of her company, the ticketing agent Jiyi Polar Cruise (极意), on a 2016 trip to Antarctica.
Can you tell us what led you to launch your tourism company?
Sally Wang: “After working for several years as a finance director in one of the top 500 fortune companies, I decided it was time for me to pursue my dream. Although I did not have any previous experience in the tourism industry, I always had a passion for traveling, exploring the world and overcoming challenges. The breaking point happened while I was traveling to Antarctica. I agree with the Buddhist poem ‘Forlorn’: “Follow the changes of the surroundings and you will benefit from the experiences.” Greatly inspired by the stories of the people who went on the trip with me, I took the plunge and Jiyi Polar Cruise officially entered the Chinese market in April 2016, by becoming a ticketing agent of polar cruises.
From 2009 to 2017, Polar Cruise agencies’ number had grown by more than three times in China. What makes you stand out from your competitors?
Wang: Customization and convenience are the main words to describe our business. What we do at Jiyi Polar Cruise is combine flexibility with professional resources to offer the highest quality for the best value. We sell our tickets at significantly lower prices than bigger travel agencies (from 30 to 40% less), with average cruise tickets at 10,000 and 6,000 USD for Antarctica and the Artic respectively, and North Pole expeditions from 31,000 to 42,000 USD.
Our promise is to make the booking process easier and to provide customized services to our customers. Visa application, hotel booking and resale solutions in case of emergency are some of the services that we take charge of to make our clients’ lives easier. We are committed to finding out our customers’ underlying interests in order to come up with a final personalized travel package that would be suitable for each client.
Trust is also an element of our attractiveness. To be considered as trustworthy, I think it is important to be an expert, or at least experienced in your activity field. I have personally traveled to the Arctic three times and Antarctica twice. This background gives me the knowledge to tell endless stories to my clients should they ever ask.
Finally, through additional services such as experience sharing, we are also adding value to our product. By bringing people together and strengthening their bonds, we provide them not only a ticket to one of the most mysterious parts of the planet, but also the chance to experience endless networking opportunities and personal enrichment.
An August 2016 trip with Jiyi Polar Cruise. Whileboth men and women are frequent customers, female travelers are more common.Photo credit:Jiyi Polar Cruise.
What are the biggest challenges in building a business in the high-end tourism market in China?
Wang: Entering the high-end tourism market in China is difficult but not impossible. There are two big obstacles: first, it is a niche market that’s full of wealthy customers who prefer private tours. Second, it is hard to retain customers because most people only travel to the Polar areas once in their lifetime. Expanding our business activities will bring more value to our customers. For this, we are working on adding few destinations such as Bolivia, Romania or Tanzania, aimed to appeal to previous consumers who might travel with us again.
China is currently experiencing a rise of the EASTs (experience and adventure seeking travelers) that are looking for unique experiences. What trends can we expect in the next few years?
Wang: Yes, recently, experts have seen that the high end, luxury travel sector in China is growing rapidly due to the thriving Chinese economy and the growth of the middle class. We are dedicated to fulfilling the demands of this clientele, who no longer settle for ordinary and standart. Instead, they look for “unique” and customized. During the past decade, I’ve seen more and more people choosing to give up on the traditional way of traveling with a professional tourist agency to prepare their trip according to their own needs.
Indeed, second- and third-time outbound Chinese travelers will seek more and more unique travel experiences. In particular, the fact that trips to the Polar Regions are seasonal makes them very attractive. There are only four months that are suitable for a visit in each area. Also, the Polar Regions are limited to board only 40,000 persons in the world every year. Destinations like the Arctic and Antarctica not only provide unmatched and exciting travel experiences but more importantly, they have become a symbol of having a curious mind, adventurous soul, higher social status, and personal excellence.
Jiyi’s inaugural Artic Circle trip in August 2016. On average, a typical Arctic trip including Iceland lasts around 10 days, whereas an Antarctica trip is slightly longer, about 18 days. Each trip can host anywhere from 20 (sailboat) to 100 passengers (luxury cruise). Photo credit: Jiyi Polar Cruise.
According to Hurun Report on “The Chinese Luxury Traveler 2016”, when they go to choose a travel agency, young and wealthy travelers listed personalized travel services (70%), expertise (57%) and itinerary planning (54%) as the three most important factors. Given that you use these criteria to describe your company, can we safely say that young and wealthy travelers are your primary segment?
Wang: We are not targeting exclusively wealthy Chinese, but our clients are without a doubt, elites from all walks of life, knowing that, on average, out tickets order values around 10,800 USD. Interestingly, some of our best-selling packages are far from our most expensive ones. Our Arctic Circle + Iceland trip is 7,500 USD/person, the main Antarctica Trip is 13,900 USD/person, and our Arctic Three Island tour is 6,900 USD/person. Even if some of our target consumers are very rich and successful people, a big chunk of them are not extremely wealthy people. (editor’s note: In 2017, in terms of yearly income, the upper class in China earns approximately from 15,400 to 77,000 USD. Above 77,000 USD per year, people are considered wealthy.) The Polar Regions’ unique scenes attract China’s young luxury travelers who are willing to spend more during their trips to make sure they have the best time possible and seek new, more challenging activities while abroad.
With an enhanced level of thoughtful customer-focused design, our trips offer independent young travelers the chance to explore the new world, meet interesting people, live unique experiences, and adventures that are beyond expectations, including: camping, hiking, kayaking, cold diving and polar plunge. Although Chinese millennials (Generation Y, aged 18-36) are quite experienced and most of them have studied or worked abroad a trip to the Polar Regions is yet something completely new.
However, right now our current customers are mainly elderly, between 60-70 years old. Indeed, they generally have more spare time and the willingness to travel. In the future, my goal is to expand our age demographic and effectively target the younger generation as a lot of them, too, can afford these trip. Moreover, the time of year is also a factor: trips such as honeymoons, Chinese Spring Festival holidays, birthdays, anniversaries and even marriage proposals are very popular occasions to travel. To be mentioned, mid-age entrepreneurs are actually also our main customers.
How do you manage your consumer acquisition strategy and raise brand awareness in your sector?
Wang: Regarding the high-end tourist market in China, building trust is the first and most important step in this area of business. Therefore, our marketing strategy relies heavily on word-of-mouth as, according to a study, 92% of respondents trust brand recommendations from friends and family more than any other kind of marketing in China. I believe that if we strive to offer the highest service quality to our consumers, there’s a good chance they’ll share their positive experience with others, and instantly become free press. Moreover, as a one-year-old startup, our current strategy is to promote Jiyi by hosting monthly events with different clubs, high-end brands, companies, and organizations.
“Building the trust is the first and the most important step on high-end tourism market in China.” Sally Wang Jiyi, Polar Cruise 极意.
Next to word-of-mouth and hosting events, we also dedicate more of our time to developing our social media networks, through our company website, official WeChat account (极意南北极), Facebook, Instagram and Weibo to increase brand awareness and connection with customers.
Promoting polar trips through events and collaborations with other high-end brands is part of the client acquisition strategy of Jiyi Polar Cruise. Source: Jiyi Polar Cruise WeChat official account
Do you have any plans for adopting or expanding your business model?
Wang: At present, we are focusing on organic growth and will continually perfect our interactive digital services to meet China’s young luxury travelers’ preferences. In the near future, we will expand our trip selection to include the ‘7+2’ – the Seven Summits and two poles. Our long-term goal would be to foster a community for like-minded individuals that are adventurous, curious and free-spirited by club marketing.
Operating under Yiran (Beijing) Culture Communication Co., LTD, and launched in 2016 by Sally Wang, Jiyi Polar Cruise (Chinese: 极意) is a professional trip advisor in the high-end tourism market in China that focuses on the Arctic and Antarctic trips. They are specialized in providing thoughtful customer-focused design polar expeditions and travel services for adventurers from all around the world. See more: www.Jiyipolarcruise.com
“People no longer settle for ordinary and standard. Instead, they look for “unique” and customized.” Sally Wang,Jiyi Polar Cruise极意.
Daxue client results
The tourism industry in China is undergoing a vast transformation with many new and advanced technologies emerging, generating more and more demand. This new reality is forcing businesses in the industry to adapt and review their business models. Daxue helped one of its clients in the tourism industry to establish itself in its geographic region of China and to better understand its key target customer groups – the Chinese traveler. To answer our client’s question, Daxue Consulting implemented an online survey as an initial research step. Focus grouping and in-depth interviews to test concepts and collect feedback complemented The qualitative exercise, all of which served to develop the client’s marketing strategy and material.
Daxue Consulting is a China-focused professional consulting firm offering strategic-driven research. Daxue’s China-focused specialist approach serves business to business, business to consumer, and consumer to consumer firms with high-quality, tailor-made market research services in a wide range of industries from finance, automotive to food and fashion industries. Contact us for more about our services, or send us an email at email@example.com.