Growth in China may be slowing but that’s no reason to take your eye off the ball, writes Pamela Whitby

Given the diversity of the world’s people, its landscapes, language and culture, to say that localising your travel offering is important in every market may well be stating the obvious. But it’s arguably more important in China, which has its own particular challenges, not just in terms of language and culture but also with respect to infrastructure.  

“A big part of succeeding in China is having a local partner which understands local standards and technology issues,” says Steven Pang, managing director of Skyscanner in China. Hence Skyscanner’s acquisition of Youbibi, a Chinese metasearch company last year. But Skyscanner has not been the only one to make local moves. Last year US firms Priceline and Expedia ramped up their local efforts by cementing local pacts with C-trip and e-Long respectively. Global hotel brands too have recognised the importance of having a local flavour and we’ve seen some international chains launching brands and concepts expressly for the Chinese market. Think Accor’s Mei Jue instead of the Grand Mercure brand, InterContinental’s Hualuxe, and Mövenpick’s Rui Xiang.

A big part of succeeding in China is having a local partner which understands local standards and technology issues

Steven Pang, Managing Director, Skyscanner China

“Although we’re a US centric company we cannot ignore that a lot of innovation and revenue opportunities are still coming from Asia and China is a priority for us,” says Jonathan Ye, Starwood’s senior manager, digital marketing social, mobile & emerging technologies Asia Pacific.

Those opportunities have been well documented. By 2030, 49% of all passenger traffic globally will be within Asia Pacific or between the region and the rest of the world, and this is backed up by data from Skyscanner. “Of the China outbound searches made on Skyscanner today, seven out of the top ten destinations are  within the APAC region,” says Pang.

So even with growth slowing to its lowest levels in 24 years, the Chinese government’s commitment to boosting domestic consumption and an upwardly mobile, increasingly independent and adventurous population, the Chinese travel story – and indeed the wider Asian one - remains largely positive. By 2030, between 800 and a billion Chinese people are destined for the middle class; in India that figure numbers 475 million people. 

“No one can ignore China or Asia. The region is a priority for every hotel brand. That’s why we’re here,” says Ye.

As an even clearer signal of this commitment, Starwood will be moving its headquarters to India in March.

On matters of a local flavour

Giving guests a truly localised experience is a priority for Starwood, and taking lessons from successful local brands like 7 Days Inn and Home Inn, both quoted on the New York Stock Exchange, has helped. These are economy budget hotel chains that have built their offering entirely for the Chinese experience.

“They’re mobile first, whether on WeChat or having a localised native app, network speeds are really good – they’ve built in China for China,” says Ye. Just one example of how this works in practice is that they’ve made it possible to make a payment for a room night on the same day as check via mobile phone – no need for a credit card, just make a payment via Alipay (China’s biggest payment e-wallet owned by Alibaba).

“Catering for the Chinese customer is something that all the big hotel brands [like Starwood] would eventually strive to do,” says Ye.

In the world of hospitality being in the right place with the right offering of products, services and amenities is crucial. The latter two are particularly important in China, where food and beverage and spas account for more than 50% of hotel revenues, says a consumer study by AT Kearney. It also shows that 50% of upper middle-class Chinese are influenced by loyalty programmes when choosing a hotel. InterContinental Hotels Group (IHG) has set the bar high and risen to this challenge; with 2 million members today, it has the largest active loyalty programme in China.

The right approach to social: it’s not what you think it is

With the great firewall of China prohibiting people from accessing the likes of Facebook and YouTube, social media has taken on a different shape altogether. Owned by Tencent, one of China’s two dominant internet companies along with Alibaba, WeChat has more than 450 million users, mostly based in China. By contrast, estimates are that WhatsApp  is estimated to have only about 23 million users on the mainland.

“Asian mobile messaging apps like Wechat, QQ or Line have filled even the last remote free seconds in our lives, and are becoming the new portals to access a full range of services,” says Daniele Beccari, Head of Travel Products at Criteo.

In essence, WeChat is an instant messaging system but people also use it as a social network. Having developed its own payment platform, TenPay, users can also pay bills, book hotel rooms and transact in banks, making it an essential part of daily life. It’s clearly a force to be reckoned with and may well even be the reason that Facebook acquired WhatsApp.

“This is pretty different from western social apps like Facebook, Instagram or Twitter where users want to have clean, streamlined experiences to interact with friends,” Beccari says.

This [WeChat] is pretty different from western social…where users want to have clean, streamlined experiences to interact with friends

Daniele Beccari, Head of Travel Products at Criteo

WeChat is not going away anytime soon and, given its popularity with Chinese consumers, businesses of all forms will have no choice but to adopt it or find a way to compete.  

Although WeChat has its sights set on other parts of Asia, there is competition from Line, the dominant platform in Japan, Taiwan and Thailand and QQ in South Korea. Line became Japan's largest social network in 2013 and in late 2014 claimed to have attracted 560 million users worldwide with 170 million active user accounts.

That’s a big challenge for travel brands. As Ye points out: “There are all these different message apps and different eco systems, so if a hotel or brand really wants to be firmly localised they will need to adapt to these messaging systems which today are being treated as more than social networks.”

Go mobile, but be subtle and elegant

Mirroring global market trends, much of the traffic to Skyscanner in China is coming via mobile. “Every single month the percentage goes up a bit. Yes, overall the numbers of desktop users are going up but mobile is going up at quicker rate,” says Pang.

The challenge now is to convert those mobile ‘lookers’ because people are still buying less via mobile – even in China. Having said that, this is a really positive place to tackle the mobile challenge head on, as many Chinese consumers are mobile first. Also worth noting is that in Asia people are very open to receiving mobile offerings, providing they are ‘subtly and elegantly’ done, says Ye.

One of the things Skyscanner is working on hard in the region is facilitated booking, which allows users to make a payment without leaving the Skyscanner app. That payment is then passed on to the partner airline or hotel, for example. Because many people in China are mobile only, their experience on Skyscanner partner sites can be sub-optimal, because these are not mobile optimised and do not support a local payment mechanism.

“Facilitate is the important word. After all, Skyscanner is a search engine and that’s made very clear,” says Pang.

Going forward Skyscanner’s priorities for 2015 include a continued focus on enabling its partners to serve relevant, targeted and, most importantly, accurate dynamic ads. “We spend a lot of time trying to avoid a situation where a user sees a price and then ends up on the partner website to find that that price isn’t there,” says Pang. 

This may sound trivial, but is actually technologically complicated given constantly changing pricing and availability. The good news is that the hard work leads to an increase in conversions. “We’ve seen a very good increase in click through rates and conversions compared to non-dynamic ads,” says Pang.

We’ve seen a very good increase in click through rates [from facilitated bookings] and conversions compared to non-dynamic ads

Steven Pang, Managing Director, Skyscanner

Like many global brands Starwood is taking the mobile piece seriously, with features such as mobile keyless check-in already live in W and Aloft Hotels in Singapore, Hong Kong and Beijing, with more to follow suit.

“Mobile is really an asset for frictionless convenience,” says Ye.  In Asia, it may not be truly frictionless yet – given that the laws of check-ins differ from market to market– but mobile is truly leading the way in innovation. “At end of the day, Asia in particular is all about mobile. The traffic that we get today, and a significant proportion of overall digital bookings, is coming from mobile and especially in countries like China which are mobile first,” says Ye.

Given the mobile first nature of many Asian countries, culturally people will be far more open to receiving subtle, yet relevant advertising via mobile – such as a reward for your favourite smoothie, or spa treatments on completing a morning run in record time.  “Providing they are done gracefully, at the right moment, my personal view is that we’re heading into a world where mobile advertising will start coming to you in the form of personalised rewards and will increase intent to purchase,” says Ye.

This is your last chance to book! Online Marketing, Social Media & Mobile in Travel Asia takes place next week (Feb 3-4). Don’t miss out on hearing insights from brands already succeeding in the region

Criteo was interviewed here as part of EyeforTravel’s sponsored content programme