Billion Billion Customized Travel New Blue Ocean: Consumer Demand Diversification, Supply Side Efficiency To Be Improved

Aunt Zhang, who is 58 years old, is waiting for her New Zealand Visa. For this trip, she chose to customize the way of travel. "After preparing for the year, I made a reservation on Ctrip, and the custom designer has sent me a 15 day plan."

This is not the first time that Aunt Zhang has chosen a customized way to travel. In fact, this has become a new choice for more and more domestic consumers in recent years following the group tour and free travel: 4300 meters above sea level, hot spring, dinner with giraffe, and speedboat crossing horizontal waterfall.

According to the China customized travel development report (2019), the total amount of customized travel online in 2017 was 86 billion 500 million yuan, and the figure in 2018 exceeded 100 billion yuan. Ctrip customized travel report shows that in 2018, the demand volume of Ctrip customized travel platform grew by over 180% over the same period, and the demand growth of customized travel in two or three line cities exceeded that of the first tier cities.

Compared with the previous "package price" type of tourism, the rise of supply side customization tourism is behind the demand side tourism diversification. "Previous travel agencies engaged in business mainly sold on the shelf price of package tour logo, equivalent to industrial production, a number of components into a product, and then through the sales channels on the shelf as a standard product to sell. This is called the "push" supply chain. However, what kind of products do tourists need and how should they produce? This is the fundamental question that business models need to answer. Xie Zhaosheng, the head of Ctrip's personal customization business, said in an interview with the twenty-first Century economic report, "the emergence of customized Tours has actually solved the problem of how the travel agency business will develop in the future."

The birth of new things is also faced with many demands and pain points. "Domestic customization tour is still in its infancy, and a big challenge is" goods are not right. " In an interview with the twenty-first Century economic report, Zhou Jia, deputy director of McKinsey Global, said that for travel agencies, "the demand is very fragmented, especially customization tours. It is impossible to cover all of them. We must consider what kind of consumer groups we focus on, how to make the products extremely successful, and put forward very high requirements for travel agencies."

The tourism market is dominated by users, and the group tour gradually gives way to freedom. Gan Jun photo

Personalized demand leads to customization

Customized travel is a new type of travel mode that includes privacy, socialization, thematic, unlimited number of people and independent regiment. It includes travel plan design, resource selection and booking, pre trip consultation, line manager, ground reception, after-sale customer service guarantee, all-around and one-stop service.

From 2014 to 2018, the annual compound growth rate of China's urban consumers' travel expenditure was 14%, exceeding the GDP growth rate (7%). As Chinese consumers travel more and travel more experienced, they are more mature and discriminative in their planning.

Travel diversified demand has grown from scratch to less than many years. In Xie Zhaosheng's view, the development of customized tour in China has gone through four stages. The traditional travel agency originally had a package business. By 2012, some start-up companies began to make customized free travel, mainly using the technology system to make resource combinations and make the overall solution. But the weakness of such companies is that they do not integrate the supply chain capabilities of the tourism industry. "

From the end of 2015 to the end of 2016, Ctrip began to make a customized platform. The operation of the platform is attracting many businessmen to come in. We encourage traditional travel agencies to turn their businesses into customized tours. The fourth stage is the high quality platform that we will strive for to achieve in the future. We can make the whole production system with the highest efficiency, the best quality and the lowest cost through the lean transformation of all the processes of the whole supply chain.

There are four main business models for customized tours. Xie Zhaosheng introduced that one is to collect commissions such as Ctrip and flying pigs, and the two is to make customized tours only, not to schedule non docking resources, which is similar to knowledge payment; the three is technology based companies, which rely on making technical systems to customize free travel; four, customizing travel agencies, mostly from traditional travel agencies, and completely customizing them.

Balance and running in for the demand side

Behind the expansion of the "rich" and "leisure" crowd, customized tourists need more accurate "portrait".

According to McKinsey's 2020 Chinese consumer survey, over 60% of respondents said they prefer self help travel now, especially in the first tier cities (80%).

According to Ctrip's 2019 customized travel data, male and female tourists account for 68% and 32% respectively; the first tier cities in Shanghai, Beijing, Guangzhou and Shenzhen rank the top four in the starting cities; the highest proportion of tourists who make customized tours is 31~40 years old (22%), followed by 41~50 years (18%) and 21~30 years (15%).

Aunt Zhang is a typical custom tour consumer. "My hometown is northeast, and now Dongguan, Guangdong. When I retired, I liked to travel when I was young. I once had an ideal tour guide. She told the twenty-first Century economic report that her first custom trip was to Yunnan, "I saw it from Ctrip in the first place." So far, Zhang aunt has made two custom-made Yunnan, one in Japan and one in Turkey.

Under the premise of the development of information and data technology, more and more personalized demands like Zhang aunt can gradually be met through efficient production methods, from mass production to mass customization. Under the C2B trading mode, customized travel has also substantially promoted the changes in the form of enterprises on the supply side of tourism.

Wang Qing, founder and custom designer of Helen Sky International Travel Agency, is a typical representative of the supply side. "In 2012, I started to do traditional tours with group tours. I won customers by selling offline stores and Baidu, and I had a group tour with shopping." The tourism market is dominated by users, and the group tour gradually gives way to freedom. Wang Qing told the twenty-first Century economic report that "the rise of customized tourism in 2015 has begun to take part in China. Now it is the top supplier of the largest customized tourism platform in China, and is mainly good at Japan, Australia, Thailand and other regions."

Customized tourism market is inseparable from professionals, custom consultants and travel consultants. The shortcoming of professional travel customization is one of the biggest problems facing the industry. There are data that the next year, the national professional division of professional gap of up to 50 thousand.

"Wrong goods" and high cost difficulties

Another feature of customized tour is the price, and the unit price is higher. According to Xie Zhaosheng, "the average price of customized tour is higher than that of ordinary tourism 30%". With the development of customized demand in the first tier cities, the per capita consumption of the tourists from north to Guangzhou and Shenzhen is 23749 yuan.

Judging from the highest order amount of Ctrip, the 9 people in Shanghai spent 620 thousand days in Kanto 10 days; 13 in Beijing, 9 in Maldives, 8 in the evening, 820 thousand; 11 in Shenzhen, 12 in the United States, and 910 thousand yuan in Guangzhou; 6 people in Guangzhou 6 days in Africa.

On the other hand, the customized travel market is becoming more dispersed and professional. Tourists are more rational in travel consumption, and more concerned about the added value of consumer goods than prices. The traditional travel agencies with such scarce and high-quality resources on the market can cover limited destinations, and the quality of service is uneven and there is no guarantee. Due to the small volume of the market and the high cost of obtaining customers, the market is in a blank state for a long time.

"When I went to Turkey, I met with a guide who was not very good." A tourist who had chosen to make a customized tour said that in a foreign country, "people like me, who are not good at English and who are not competent in English, make me feel very scared." Once you hand in your money, you will be on the road and will be forced to walk on your journey. Custom designers can't get a headache and communicate with each other in time to solve problems. It is necessary to have a special supervision, inspection and follow-up department.

For Ctrip, how to select and manage suppliers is the most important.

Xie Zhaosheng said that for suppliers, Ctrip has formulated relevant management standards, including detailed provisions on access, service specifications, quality assessment, safety, information security and exit mechanism.

For suppliers, it is not easy to change from tradition to customization.

Wang Qing said that in the 2016-17 years, the industry was extensive and barbarous growth stage. "A large number of orders, few customized teachers, service capabilities and resource procurement are not particularly good, and the growth of performance is very high." In 2018, we began to make transformation. We need to invest a lot of manpower and material resources to make structural adjustment. "Customizing the resources of our guests is different from that of the group. Frankly, the company does not have much profit margin. By 2019, we have entered the stage of lean management, and the efficiency of internal organization and the improvement of customization efficiency are urgent problems. "

Xie Zhaosheng also said that the main pain of suppliers is that the output of human efficiency is not very high. The direct purchase cost of traditional and group tours is relatively low, while the factor of tourism resources and the direct labor cost of customized tours are higher than those of standard products.

But custom agencies can still make money, even if the cost side is inferior, but the customer value side is much higher than the traditional group tour, and the business mode is also established. The next stage of customized development depends on improving the efficiency of the operation side and reducing the cost.

Zhou Jia said that customized travel is not simply a tourism product from three star, economy class to first class, five star. "Capturing the needs of consumers is the key to the market. The supply side should be more mature, and we should cultivate consumers to mature them, so that there will be benign growth.