Home > Blog > HongKongEcho: Better to travel 10,000 miles than to read 10,000 books

This article originally appeared in HongKongEcho 83: More than a mall? Challenges facing the tourism sector

 


The tourism sector is being redefined by a new wave of outbound travel from China. David Baverez decodes this new type of traveller and tells us what the shift in expectations means for Hong Kong.


 

If China is reshaping many industries for the XXIst century, the tourism sector will no doubt be one of the most revolutionised in the coming years. Not only quantitatively, as already more than 80 million Chinese tourists travel overseas on average 1.4 times annually; but also qualitatively, as a new type of emerging customer is inviting industry players to redesign thoroughly their offering concepts.

To simplify the ongoing migration, ‘product offering’ has already been superseded by ‘service’. ‘Service’ is now being replaced by ‘experience’. And the frontrunners of the industry are already moving from ‘experience’ to ‘transformation’; all to the delight of the fastest growing clientele in the world, the Mainlanders.

Like in any Schumpeterian revolution, those unable to adapt their outdated model suffer: Hong Kong’s luxury goods shops, still solely focused on products historically driven mainly by mainland corruption, have seen their business halve over the last two years. Those who have tried to develop new services have discovered belatedly that ‘it takes five generations to make a gentleman’, as illustrated by the fiasco of the Peninsula opening in Paris. Even the best heritage in Hong Kong does actually take time to become a ‘Palace’ in another part of the world.

As a result, today’s biggest industry challenge is to design a new ‘experience’ offering, catering for the needs of an unprecedented customer: a 100% digitalised ‘one child policy’ Chinese traveller: eager to catch up on his country’s lost century; eager to reconnect to a kind of cultural heritage, as his own was destroyed during the Cultural Revolution; eager to ride on a learning curve at the fastest possible speed.

This has already led industry leaders like Club Med to rethink their concept for an average stay length of three days for a ‘Chinese’ client versus seven days for a Western client; Hotels in Phuket have discovered that a ‘Chinese‘ five day stay was likely to spread over five different hotels with an unlimited number of selfies in all the best spots of each hotel; Mister Wu Qin, ‘the Paris hotelier with four arms’, has created a ‘520’ room on each floor of his twenty Parisian hotels to cater for honeymoon couples, for whom ‘520’ reads like ‘I love you’….

But the real future winners of the tourism industry will be the ones already anticipating the next move of their clientele, from ‘experience’ to ’transformation’. They have already identified that young Chinese are unlikely to behave like their parents, mainly interested in a selfie in front of the Eiffel Tower or in a Louis Vuitton bag. Rather, they will want to use their free time to transform themselves and get closer to their same generation in other parts of the world.

They will drive the amazing success of new players designing the right new concepts: companies like Ctrip, creating temporary virtual communities from their clientele going to the same destination on the same day, able to exchange real-time information and live impressions; or like Lululemon, converting bodycare to soulcare in China, by invading the Forbidden City one day in August for a mass open-air yoga meditation class.

As a result, the tourism sector will be redefined, encompassing a much broader spectrum of activities with a greater number of players dramatically shifting the share of the wallet. Already today, the most valuable company of the sector is probably Airbnb, at an estimated US$30 billion, despite not owning a single asset, while numerous five-star hotels all over the world are loss-making.

Yesterday’s winners are therefore unlikely to be tomorrow’s.

Where does that leave Hong Kong and its 60 million annual visitors, 45 million coming from the Mainland? Like in other verticals such as shopping or banking, there is no denying that the last two years has served as a wake-up call to the city that its current offering is not well suited for the future. Similar to its neighbouring Macao, who saw its gaming revenues halve over the last three years to ‘only’ US$25 billion.

However, I still remain convinced that Hong Kong doomsayers will be proven wrong once again. Just looking at what the art gallery scene has developed within the last five years makes me confident that Hong Kong will be able, in the near future, to rebuild a tourism experience that will transform the life of its visitors. Its unique combination of the dynamism of its city-centre and the proximity to both sea and mountains should allow it to offer unbeatable memories.

The Hong Kong and French connection

We were all transformed in our life one way or another by the various stays we spent in New York, always surprised by either a new trend, a new concept or a new discovery. In that respect, NYC was illustrative of the tourism industry of the XXth century that was shaped by Anglo-Saxon groups who brought in new concepts like hotel chains, service standards and worldwide branding.

It is now the turn of Hong Kong to show the way to Chinese tourism players on how to invent the transformational offerings that will reshape the industry for the XXIst century. No other country will be better placed than France to help in the process.

The success of the rebirth of Société du Louvre under the ownership of Jin Jiang shows the huge synergies that can develop from mixing both cultures, as illustrated by the recent announcement of the development of 250 Campanile hotels in China just over the next three years.

So maybe the least likely to enjoy the new tourism industry will be Hong Kong investment bankers, too busy, in future years, merging French and Chinese hospitality cultures!

Whatever the industry becomes, one thing remains certain: a two-to-three hour flight from Hong Kong, even if for less than 10,000 miles, will still offer an unmatched mix of different countries to discover and re-discover, with the great benefit of transforming our lives.

 

David Baverez is the author of “Generation tonique – l’Occident est completement a l’Ouest” (Editions Plon 2015). The views expressed are purely personal.

 


MORE THAN A MALL? CHALLENGES FACING THE TOURISM SECTOR

Thirty-two million. That’s how many same-day visitor arrivals were recorded in Hong Kong for 2015. It’s an incredible number. But with spending, overall arrivals and average length of stay dropping, Hong Kong must look to become more than just a hub for day-trippers and stop-over visitors.

Ultimately, Hong Kong is already one of the most visited cities in Asia. The challenge is not to overhaul what’s already there, but to fine tune certain elements. Hong Kong is more than a shopping precinct and a westernised financial adjunct to mainland China. Let’s not be afraid to show it.

Read the full magazine here.