Travel agencies go online, shift focus to avoid COVID blues

Travel agencies in China have borne the brunt of the COVID-19 pandemic, which forced some to close down, but several agencies are now actively promoting their travel products online or shifting to different operations to get through the tough times.

On Jan 24, China officially suspended domestic and overseas group tours organized by travel agencies. So far, the operations of travel agencies have not fully resumed yet. Even though most staff have returned to work, it has been difficult for them to get new orders.

Traditional travel agencies rely heavily on the organization of certain travel routes. But they are still not allowed to organize trans-provincial group tours by Monday, and outbound trips have been stagnant due to travel restrictions imposed by most countries.

As a result, the agencies mainly sell tours of neighboring areas within a province. But the profits of such local tours are slim at best.

Yang Hong, general manager of Hainan Golden Ocean Travel Agency, said the company barely received any orders for a few months since the outbreak of the epidemic. He has to think about innovative ways to solve the problem.

During the mid-year online shopping festival in China on June 18, Yang attended the livestreaming session of Fliggy, Alibaba's online travel service provider.

The company prepared some personalized products, such as tailored trips and villa rentals. Those products carried cheaper price tags than usual though.

"It has been a tough time, and also a reshuffle for the industry. We need to upgrade products, train staff, maintain equipment and expand online sales channels. Our consensus is that the demand is restricted temporarily, and it will come back when it's safe to travel. Tourism constitutes an important part of Hainan province, and we are confident about our growth prospects," he said.

For many travel agencies in Hainan, the internet has become an indispensable part of business operations and the epidemic has reinforced its importance.

Many agencies have strengthened their focus on internet operations, such as precision marketing based on big data, and regular communication online with potential travelers.

"Before the epidemic, online sales accounted for 40 percent of our total orders. Now it makes up about 80 percent of the total. Once people formed their spending habits, they are unlikely to change easily, and online consumption is expected to continue," said Fu Subin, brand director of Wuzhizhou Island in Hainan province, one of the most-visited scenic resorts in the area.

"The building of Hainan Free Trade Port will further drive consumption upgrade and the expectations of travelers. Tourism suppliers are foreseen offering more high-end, tailored and sports-related travel products," Fu said.

By the end of 2019, there were 38,943 travel agencies operating in China. Last year, travel agencies nationwide achieved a total revenue of 662.18 billion yuan ($95 billion) and profits of 3 billion yuan, according to the Ministry of Culture and Tourism.

But the good times did not last.

The unexpected epidemic this year forced travel agencies to suspend part of their operations. In May, about 9,000 travel agencies canceled the registration of companies, which was 30.6 percent higher than the number in April, said Qichacha, a major enterprise credit investigation agency.

Some major travel agencies have shifted their business focus after the suspension of overseas trips.

Beijing-based travel operator Utour Group has turned its focus from outbound trips to domestic short-distance tours. The operator launched livestreaming sessions and posted short videos on several social platforms. It also incubated online celebrities that can help attract more attention and potential consumers.

Caissa Touristic, a Beijing-based travel agency and a major organizer of group travels overseas, shifted its focus to the duty-free shops business in Hainan and is seeking to diversify its development.

"Large-scale travel agencies can focus on business such as domestic tours, hotels, duty-free business and retail to maximize their profits. Medium-sized and small firms can more easily shift their whole operations and they could transform to other businesses and survive," said Wu Liyun, associate professor at Beijing International Studies University.