B2B International
B2B International

October 15, 2010

In her first Thursday Night Insight, Jingyuan Guan discusses Chinas tourist boom during Golden Week and the impact this has on travelers.

With the week-long Chinese Golden Week holiday now over, the domestic tourism industry reached a peak during the year.

These national holidays were first started by the government for the PRC’s National Day in 1999 and are primarily intended to help expand the domestic tourism market and stimulate domestic consumption. The Golden Weeks are consequently periods of greatly heightened travel activity.

On that first Golden Week, in October 1999, the government was astounded that 28 million people opted to play tourist in their own country and dug deep into their pockets to spend $1.62 billion.

Traveling is very common during the holidays and traveling to big cities is a must for most Chinese tourists. Shanghai and Beijing are the most popular tourists destinations, others include Hangzhou, Xi’an, Hong Kong and Xiamen. In Beijing, the number of tourists reached nearly 10 million, a 24 percent increase from last year. That’s almost half of the Capital city’s current population. Shanghai is also a major tourist hotspot during Golden Week, with 8 million tourists attracted to visit the Shanghai Expo.

The Chinese Tourism Academy forecast before the holiday that the number of tourists on China’s mainland could surpass 200 million during the week-long holiday, while tourist income is expected to be more than 100 billion Yuan ($14.7 billion), an increase of 25 percent over the same period of last year.

Added to it are the economic spinoffs such wild spending sprees generate, and the value to the economy is likely three or four times higher still.
But there are visible cracks in this golden egg.

So many people on the move at the same time has made Golden Week travel a nightmare. Think Christmas week three times a year. Flights are overbooked, trains and buses are jammed and the highways are congested in every direction.

And once travellers do get to their longed-for destination, more often than not they find tourists sites mobbed, hotel rates sky-high and even soft drink vendors charging ridiculous prices in hopes of cashing in on the bonanza.

Such seasonal peaks in demand offers considerable opportunities to marketers, high demand and limited supply enabling vendors to charge high prices for their products. During these holiday periods, hotels charge exorbitant rates, flights are only available at full fare and even the price of soft drinks and snacks rockets.

It can be argued that the tourist industry is highly seasonal, and that the tasty profits available during these peaks travel seasons actually compensate for less profitable business at other times of the year. Having said that, such fluctuating prices can be frustrating to the average consumer, and I suspect that many travelers would prefer for hoteliers, airlines and other tourist-related businesses to spread their costs throughout the year rather than to bundle them all into one short period of time. Many people in China only have free time to travel during national holidays, and it does seem unfair that only people with flexible working hours can benefit from lower prices at other times during the year.

Seasonal pricing can serve to alienate many consumers by denying them from enjoying price offerings available to others. I would personally like to see companies in China’s tourist industry develop a more sophisticated range of products that cater to different segments of the market and are less exploitative to the average everyday customer.

Therefore, properly assessing the need before making any move is a sane decision. Am I going to take a long-distance trip to see a particular resort with a ridiculously priced flight ticket and large crowds of people everywhere or stay at home and relax?

And so it is at the outset of any particular research project that I always ask clients to ask themselves to understand whether research should be commissioned and what type of research will be able to help them. The first question that should be asked in the research planning stages is “does the information you seek already exist within your organization?” If not, what is the problem you are looking to answer and to set the respective objectives and goals for the study:

  • What is the scope of the study? (geographies to be covered/industry sectors/customers or potential customers)
  • How much do I have to spend?
  • When do I need the data by to inform my strategy?
  • And most important of all…..what will I do with the information once it has been delivered?

For more information on what questions you may want answering and how market research can help deliver business intelligence to your organization visit Frequently Asked Questions In Market Research