Seton Vermaak
Jan 26, 2017

Golden Week’s golden opportunity: loyalty

Many travel and hospitality brands are failing to meet the expectations of China's Golden Week travellers when it comes to loyalty, according to Seton Vermaak of SapientRazorfish Hong Kong.

Seton Vermaak
Seton Vermaak

Nearly 600 million Chinese travellers embark on a holiday during Golden Week, according to the China Tourism Academy and Ctrip. Those impressive numbers are growing well in excess of 10 percent year-on-year. As the numbers climb, so too does the revenue for the travel and hospitality sector. In that same report, China Tourism Academy and Ctrip estimate total travel booking revenues for Golden Week reached about US$80 billion in 2016.

Golden Week’s fiscal opportunity is a no-brainer for the travel and hospitality industry. What most brands struggle with is claiming the hidden opportunity these three Golden Week festivals offer. For CMOs, Golden Week offers an enormous opportunity to win a greater share of Chinese travellers’ fat wallets.

It’s well known that Chinese travellers have a preference to book through online travel agents (OTAs) to do price comparisons and find deals. As a result the challenge for hotel and airline brands is converting OTA guests, engaging with Chinese travellers and securing direct bookings. With three Golden Week events annually, these festivals hold immense potential, a potential triple bite of the cherry for brands who are winning in the loyalty space.

Not many brands are winning in the loyalty space, because China’s affluent travellers demand a unique loyalty experience. The good news is that Chinese consumers are reportedly more loyal than their neighbours in Hong Kong, but they’re somewhat more demanding. Their expectations and needs are different to their non-Chinese peers.

And while that may sound obvious, many international brands offer global loyalty schemes with a one-size-fits-all approach. CMOs or global loyalty directors may assume a free room or flight is a ‘free room or flight’ in any language. That’s a proposition that doesn’t translate well in Asian markets. And in fact, most millennial-minded travellers refuse to engage with a ‘rooms-for-rooms’ transactional loyalty approach. Asian travellers are looking straight past the old loyalty offerings and aligning themselves with brands that reward their lifestyle desires.

So, how can brands begin to establish a personal relationship with guests and reward their lifestyle desires during Golden Week? Having a traveller on premise means brands have an opportunity to build a personal relationship with that traveller, one that will continue well beyond the time they walk out the door. And if the relationship becomes trusted and useful, the customer will have many more reasons to come back next time.

In recent years, Chinese travellers have changed much of their consumer behaviour and preferences. Gone are the days of inflated luxury purchases. These days millennial-minded Chinese consumers are aspiration seekers; they want experiences not things. They, most importantly, are looking to upgrade—not necessarily into business class or a suite—but an upgrade on their experience, one that reflects the type of person they’re striving to become. This doesn’t mean luxury is dead. Far from it, it means luxury is redefined to be more understated.

It may appear Chinese travellers are a demanding bunch. But what’s important to remember is that they’re expecting brands, with the help of new technologies, to cater to their moods and modes. Whether traveling for business or pleasure, these travellers have different expectations of upgrading their experiences. At times they seek convenience, or to prioritise wellness, at other times prestige and exclusivity are their preference. However, at all times they seek the best deal and expect value in return for their patronage.

Only through establishing a direct relationship can brands be expected to meet these expectations to level up. Golden Week presents a huge opportunity for travel and hospitality brands to initiate their relationships with consumers and in turn increase sales margins and retain high-value customers.

Seton Vermaak is head of strategy with SapientRazorfish Hong Kong.

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