Marketing travel and tourism in Asia

In the past 12 months Singapore's tourism sector generated an estimated $13.8 billion in tourism receipts, surpassing 2006 with a growth of 11.3%. Visitor arrivals for last year hit 10.3 million, an increase of 5.4% on the previous year. Adaline Lau reports.

As travel and tourism continues to boom in Asia especially with the exploding out bound Chinese market, how do marketers differentiate their brands and reach out to an increasingly fragmenting audience?

Gary Rosen, senior vice president of sales & marketing for Intercontinental Hotels Group (IHG), says the industry is seeing a major shift from unbranded hotels to branded hotels, with branded rooms growing at three times the rate of unbranded rooms.

In an increasingly electronic and sophisticated world, customers are looking for brands they are familiar with. Rosen says IHG, with seven hotel brands worldwide and four of them present in Asia Pacific, has the right hotel brand for its guests to suit their needs.

IHG's luxury hotel, InterContinental Hotels & Resorts targets the international business traveller. He explains the brand had to balance customer's luxury expectations with authentic local experiences.

Based on consumer research, Rosen says today's business and leisure travellers seek new discoveries and want to visit local bars and cafés. They want to gain differentiating experiences and become more worldly, sophisticated and "in the know."

To serve those needs, the hotel elevated its 1,000 concierges to serve as "in the know" brand ambassadors to help its guests enjoy the authentic and unexpected in over 100 destinations.

The luxury hotel also signed up as a two-year multi-million dollar sponsor of Aston Martin Racing. The partnership extends to exclusive racing events, driving experiences, weekend packages and VIP tours of the Aston Martin Racing factory.

In 2007, InterContinental partnered with National Geographic to organise a contest for amateurs to share their travel photographs. The contest encouraged travellers to share their personal "in the know" experiences and winners were announced in October. The winning works were published in National Geographic magazines and displayed in selected InterContinental hotels.

Crowne Plaza Hotels & Resorts is another upscale brand offering premium accommodation targeting discerning business and leisure travellers. As guests to the hotel tend to play and watch golf more than any other sport, Crowne is involved in golf sponsorships such as the Asian Tour and Chinese Professional Golf Association to ensure its brand is front-of-mind with key decision makers.

For Holiday Inn, which appeals to middle executives who travel extensively in their jobs, an ‘Everyday Heroes' campaign was initiated to recognise the contributions of these road warriors who goes the extra mile to get their jobs done.

Rosen adds another fast growing brand for IHG is Holiday Inn Express, which is positioned in the segment between full service four star hotels and budget hotels.

For Starwood Hotels and Resorts, Yeo Hwee Peng, director, corporate communications for Starwood Asia Pacific Hotels & Resorts, says the group segments guests according to how they match their brand personality for more effective marketing.

"Essentially looking at not just demographics but psychographics to better understand our customers," she adds.

It is no surprise when Le Meridien embarked on a brand re-launch last September and its target audience was defined as the ‘creative guest'.

Le Meridien repositioned to attract the ‘creative class' defined as the modern active person of the 21st Century embodying attitudes that include being confident, techno-savvy and forward-looking.

To attract its target audience, Le Meridien adopted the tag ‘chic, cultured and discovery' and built marketing initiatives around these core values. One of them included an exclusive marketing partnership with Italian coffee brand Illy called ‘50 words, 50 beans' where guests were challenged to exhibit their literary prowess aimed at developing a unique culture around coffee.

To transform the establishment from a functional business to a lifestyle brand, Eva Ziegler, senior VP for Le Meridien Brand, says Starwood would use events as the marketing vehicle to create an emotional connection with its guests.

Events such as First Night showcasing public art installations kicked off in Shanghai in late 2006 and Ziegler says other Le Meridien hotels will have initiatives called Creative Hour to bring live art, architecture and cuisine to its guests.

This year will sees Starwood's luxury line of W Hotels launch in Hong Kong in the third quarter. Yeo says W Hotels has become the fastest-growing luxury hotel brand in the world and the focus is to deliver and market unique and memorable guest experiences to drive loyalty.

She adds the upcoming W Hotel will offer a mix of innovative design and cultural influences from fashion, music, art and a series offline and online marketing activities to provide guests with unique W insider moments.

While understanding and segmenting audience is crucial for the hotel industry, Vince Viola, senior vice president at McCann Erickson Asia Pacific and managing director of McCann Hong Kong Cathay Team team, says one of the key challenges facing the travel marketers face is the increasing competition for the premium sector.

He says when first class and business class offer similar features such as audio, video on demand and a flatbed, how do you differentiate between the brands of a particular airline? This is where loyalty marketing becomes critical in the premium segment, Viola says.

Stephen Hay, general manager for ICLP Hong Kong, agreed the high level of marketing noise increasingly makes it a challenge for marketers to get the right message to the right customer at the right time. He says lead times were shorter and marketers need to ensure they are talking to their customers sooner, understanding their needs faster and matching the right propositions to them.

Hay observes customers are increasingly segmented based on value, needs and motivation. For example, an affluent frequent traveller may look for more inspirational and impulsive travel opportunities whereas a less experienced first time traveller is going to need a lot more hand holding and education that requires a very different message and approach.

Travel reward programme Asia Miles for instance, has a database of 3.2 million members and Dominic Purvis, GM for Asia Miles, says the company works closely with its partners to send targeted messages to the different segments.

Purvis says the main communication channels are emails and the website, which forms the main interaction of the Asia Miles brand. Although email marketing is quick and cost-effective, he points out other forms of communications such as direct mail, sales calls and public and media relations media are just as important.

Despite an increasing trend to target the affluent business traveller segment, British Airways has formed a kids' council last year to woo young customers. The council was set up to target children between eight and 14 years who have flown on British Airways to seek their opinions on how the brand develops its services and improve the overall flying experience for this increasingly important consumer group.

"We set up the Kids' Council so that we could learn about the views of our young customers - what they like and what they feel needs changing," Joerg Tuensmeyer, GM for British Airways, Greater China and the Philippines says.

It becomes apparent why the airline is targeting its younger audience as Tuensmeyer revealed British Airways flies more unaccompanied minors than any other airline.

The council comprising ten children from Hong Kong, Uganda, Mexico, Nairobi and South Africa flew into the airlines headquarters in London to attend their first meeting in August last year.

Capturing China's online travel market

China may be a relatively new market to the travel and tourism industry but eMarketer estimates online travel bookings in the country hit $1.5 billion in 2006, and average annual increases of 60% will push the Chinese market to $15.4 billion in 2011.

Indeed, Ctrip.com, a Chinese online tourist service company, is optimistic that China's online booking market will continue to gain momentum.

A joint survey conducted by Nielsen and Ctrip, which polled more than 3,000 Chinese consumers aged 15 to 54 years across the country, revealed that almost half of Chinese travellers (47%) prefer to plan their own trips by booking their air tickets and hotels through online travel agencies. The survey reflects an increasing shift of Chinese travellers moving away from packaged tours to personalising their travel itineraries via the internet.

Tang Lan, vice president marketing for Ctrip, says, "The environment for domestic e-commerce has been greatly nourished by the rapid development of the internet and booming Chinese tourism."

He observes that travel habits of Chinese consumers have been dramatically reshaped with an increasing number of them prefer to plan trips on their own. Tang says Ctrip members represent those Chinese travellers who are becoming more comfortable and experienced with travelling.

"As the online booking market gains momentum, we predict there will be more consumers turning to personalised travel planning", he added.

In a separate study by The Nielsen Company on the China outbound travel monitor for 2007, a whopping 87% travel for leisure, with 39% for business needs, and visiting relatives and friends at 17% and 12% respectively.

The report showed among those in the Chinese leisure travel market, searching online for information sources such as via the internet for destination information (70%) and online travel discussion forums (62%) surpass heading to the travel agencies (60%).

While the study reported that conventional travel agents still take the lead in leisure travel booking at 58%, booking via an online travel agent and websites of hotel and transportation are becoming more popular at 32% and 17% respectively.

If online travel is looking up in China, how could marketers jump on the bandwagon and tap into cyberspace to serve their sales and brand marketing goals?

Amy Zhang, vice president of sales & business development for Qunar.com, says Qunar is one such marketing channel that enables advertisers to achieve their sales-oriented and branding objectives.

Unlike travel agencies, which are transaction driven and is based on a commission model, Qunar is an online travel media platform that connects consumers directly with travel vendors and charges online ad fees similar to other media channels.

Zhang says travel vendors include airlines, hotels and online travel agencies and the website receives over 12 million monthly unique visitors.

She pointed out that Qunar attracts a very valuable user demographic. Eyeballs to the online media company include highly educated professionals, who are internet-savvy and frequent travellers with high purchasing power.

Almost 70% of Qunar's users are between 25 to 40 years old with 58% skewed towards males and 42% females. Zhang noted 60% of those users are from Beijing, Shanghai, Shenzhen and Guangzhou while figures for other cities are increasing steadily.

To meet marketers' needs, she says Qunar offers a range of ad formats from text links, display ads, mini-sites to sponsorships. She also receives a lot of demand from marketers for online events. Advertisers that have come on board include ANA, Star Alliance, Cathay Pacific, Dragonair, Accor, Starwood, IHG and Hong Kong Tourism Board.

While the advertisers are mostly from travel and tourism categories, Zhang noticed that non-travel clients such as Canon, HP and Ping An Insurance are showing strong interest.

A notable example of an advertiser that has successfully leveraged on Qunar is one of China's top airlines, which the media company helped to optimise and customise functions to triple its online ticket sales in the first quarter since the partnership. The conversion ratio from clicks to successful online bookings and sales on the airline's site via Qunar is five to 10 times higher than other channels. Zhang adds, in 2007, Qunar accounted for about 20% of their online direct sales compared to less than 15% from general search engines.

Although the shift to online offers unique opportunities for travel marketers, however, using the internet as a marketing platform does pose several key challenges.

As the corporate website increasingly becomes an airline or hotel's primary face to the consumer, Zhang suggests every company needs to invest on their sites by employing the latest technologies, fastest equipment and suitable user interface as well as provide the most relevant information for their consumers.

Now that the internet may offer a wide range of new distribution and marketing channels, Zhang says marketers are going to be constantly challenged in trying to identify and evaluate the most relevant marketing channels to reach their consumers.

Consumers are also becoming more discriminate about where, how and why they travel resulting in fragmenting tastes and preferences. Marketers will need to juggle the dual challenges of having to efficiently reach the fragmenting consumer base while upholding the highest standards of service and quality.

[Box out 1]

Stephen Hay, general manager for ICLP offers three inside tips for travel marketers

1. Engagement - Use new online tools to engage many more people and to establish a conversation with them

2. Understanding - Capture the data, do the analysis, demonstrate to your customer that you can drive a more personal proposition

3. Targeting - Nothing new here, but it still works, leads to less clutter, happier customers and better financial returns

Yeo Hwee Peng, director, corporate communications for Starwood AP Hotels and Resorts' advice to travel marketers

1. Focus, focus, focus
2. Keep your efforts targeted to ensure deep and broad reach
3. Avoid changing your messages all the time
4. Don't expect one solution that applies throughout the region or even within the same country
5. Tailor your approach according to the local market