In early 2020, an unexpected epidemic disrupted the festive atmosphere of the new year of Gengzi and slightly slowed down the rapid pace of development in China's tourism industry. Li Jian, Deputy Director of the Civil Aviation Administration of China, reported that from January 25 to February 14, the average daily number of air passengers was 470,000, just one-quarter of the same period last year. From February 15 to 23, passenger traffic is expected to halve again, with daily passengers projected to not exceed 200,000—less than one-tenth of peak times and a seat occupancy rate of under 40%. According to calculations by Li Xinjian, an expert from the World Tourism Alliance, the direct losses to the tourism industry during the 2020 Spring Festival period were around 550 billion yuan, and the rapidly growing Chinese business travel industry also faced certain impacts.

Fang Jiqin, who experienced Ctrip’s development during the SARS period back then, is now the Senior Vice President of Ctrip Group and CEO of Ctrip Business Travel. Since taking the helm of Ctrip Business Travel in 2013, he has led the company to become the leading TMC in China, with transaction volume reaching as high as 22 billion yuan in 2018. Regarding the challenges facing the business travel industry under the epidemic, he stated that many companies have delayed resuming work and reduced or canceled non-essential business trips, so a "freeze" in the travel industry from at least February to April this year is foreseeable. However, this impact is temporary and short-term and will not alter the fundamentally positive long-term outlook of China’s business travel industry.

During this special period, Chinese business travel companies need not only to address short-term crises but also to hone their internal capabilities, comprehensively enhance service and technical abilities, and prepare for a potential rebound in travel demand after the epidemic.

Mr. Fang Jiqin, Senior Vice President of Ctrip Group and CEO of Ctrip Business Travel

Industry reshuffling is inevitable, and market concentration is expected to increase

After Wuhan went into lockdown, national departments issued a series of notices related to the cultural and tourism industry, which have had a huge impact on China’s business travel industry and served as a test of the sector’s resilience to risks.

First, many clients hope to achieve free cancellations immediately, which requires companies to have high-speed front-end operational efficiency and strong back-end technical support. Many companies have deployed nearly all staff to serve as customer service to assist with cancellations and changes, yet some clients still report issues such as unanswered calls, system crashes, and slow refund processing. Additionally, to process full refunds, many companies are generally facing high advance payments, which is a test for cash flow. According to joint research data from Tsinghua and Peking Universities, 34% of SMEs have only enough balance to last one month, 33.1% can last two months, and 17.91% can last three months. With the end of the epidemic still unclear, poor cash flow could exacerbate operational difficulties for small and medium-sized business travel companies or even force them out of the market.

On this, Fang Jiqin said that the impact of the epidemic will inevitably affect the short-term revenue of business travel companies. In the long run, it is a reshuffling for the business travel industry and may lead to partial integration, increasing industry market concentration. Data shows that the penetration rate of business travel management in China is less than 10%, far behind the international market’s 40%, and mainly consists of non-professional business travel agencies such as OTAs, traditional travel agencies, and ticket agents. Accompanying the epidemic is a process of survival of the fittest. Business travel companies with good cash flow, technical capabilities, and service absorption capacity may recover more quickly in adversity and continue to lead during subsequent rebounds.

Additionally, regarding the “Several Policies to Support the Tourism Industry in Fighting the Epidemic and Stabilizing Development” launched by the Ministry of Culture and Tourism and 20 provinces and cities, Fang Jiqin believes that business travel companies can fully leverage policies to help themselves “stay warm,” but in the long run, they still need to rely on product strength, service capability, and technical prowess to “get through the winter.” External support is temporary, and the capabilities honed in the cold will help companies better cope with future winters and unexpected situations.

Finding Opportunities in Crisis – Capturing Post-Epidemic “Revenge” Growth

Fang Jiqin said: “The dilemma is already a reality. At this time, we should flip the coin over and seek opportunities in crisis.”

The current situation faced by many enterprises was played out during SARS 17 years ago. As a breakthrough survivor from those times, Fang Jiqin recalled that under SARS, people stayed home and didn’t even think about traveling or going out. Companies primarily engaged in air tickets and hotels saw their business plummet. At that time, although Ctrip was struggling, it held firm and did not lay off employees. All management staff took only 60% of their salaries to reduce labor costs, while simultaneously insisting on “honing internal capabilities,” accelerating process optimization and internal training. A few months later, when the epidemic ended, the tourism industry experienced “revenge” growth, and Ctrip’s platform saw a 200% increase in ticket volume. Many companies, due to layoffs and downsizing, couldn’t adapt to the changes in time, whereas Ctrip, because of its prior decisions, rapidly rose and successfully went public on NASDAQ by the end of the year. The experience from that time can be fully applied today. Starting January 31, Ctrip Business Travel, in sync with the group, launched extensive internal training – the “7-Day Progress Plan,” which uses every seven days as a cycle to launch various courses on leadership, products, scientific management, etc., to enhance employee capabilities. During the same period, it also reviewed and upgraded internal technology, service, and business processes and structures, resolving previously accumulated issues one by one. He said that a crisis can also be a turning point, and only by being “fully prepared and robust” can one seize the opportunities after the epidemic.

Compared to 17 years ago, in 2003 China’s business travel industry was still in its infancy, but in 2020, China’s business travel has entered a phase of rapid development, with an estimated annual market transaction scale of over 400 billion US dollars, and the growth rate in the coming years is expected to remain above 6%. Such a large market will not slow down due to temporary impacts. Although there are many concerns that this epidemic may harm the overall economy, judging from the current progress of resuming work and government measures, efforts are being made to mitigate the impact. After a certain period, China’s economy will regain vitality. Even industries playing key and positive roles during this epidemic, such as healthcare and warehousing logistics, will welcome good opportunities, which will also benefit the development of the business travel industry—industries that can be closely monitored.

Unite internally, gear up for battle; plan externally, seek opportunities in crisis. This is Fang Jiqin’s secret to calmly dealing with the present and remaining optimistic about the future.

Technology Empowerment – The “Responsibility Mindset” of Business Travel Companies During the Epidemic

Compared to OTAs, Chinese business travel companies have made little noise during the epidemic but undeniably demonstrated strong action and a sense of responsibility.

Faced with the massive wave of cancellations and changes, business travel companies have worked overtime to respond. Take Ctrip Business Travel as an example: nearly a thousand frontline employees returned to work immediately or started working from home, customer service staff served over 200 users per day on average, and developers continuously updated and maintained systems to ensure the stable and efficient operation of online platforms. Following Ctrip Group, Ctrip Business Travel continued to expand the scope of cancellation protections and upgraded the no-penalty cancellation policy. Regarding the “Tongpao” (comrades-in-arms) initiative launched by Ctrip Group for partners, Ctrip Business Travel is also actively responding and engaging.

For policies to be effective, they need technological support, and technological tools are the most solid demonstration of responsibility for leading business travel management companies. On January 26, Ctrip Business Travel’s app and website simultaneously launched a management system called “Travel Health Record.” Fang Jiqin revealed that under the epidemic, Ctrip Business Travel quickly realized “the importance and urgency of a statistics system involving travel and health.” Thus, a capable team was assembled to urgently initiate the project, which was developed, tested, reviewed, and launched within just three days for use by corporate clients. Data shows that nearly 4,000 companies have used the system in the past three weeks. Meanwhile, within the “Epidemic Special Zone” section launched on WeCom (WeChat Work), this system has also been prominently recommended to users.

Ctrip Business Travel “Travel Health Record” Management System

Ctrip Business Travel firmly believes in the power of technology and maintains deep thinking about technological innovation. Fang Jiqin said that across the entire industry, the empowerment of technology during the epidemic will strengthen the awareness of “business travel management” among enterprises. Corporate clients will further perceive the value of TMC services, which will help TMCs achieve faster development after the epidemic. At the same time, the industry trend of end-to-end, one-stop business travel platforms and services will become even more prominent. He also called for more business travel companies to harness the power of technology, act with compassion, overcome difficulties together, and take on greater social responsibilities during the epidemic.

True heroes emerge in turbulent times. There’s nothing to fear about winter. Be the “night watchmen” of business travel, ignite the spark of hope, and illuminate the night sky of the harsh winter. Fang Jiqin concluded that spring will come eventually, and after the epidemic, business travel will be better.