Shenzhen, August 27, 2015 /PRNewswire/ -- Recently, the State Council issued the "Several Opinions on Further Promoting Tourism Investment and Consumption," encouraging a 2.5-day vacation model. Experts predict that if the policy is smoothly implemented, direct tourism investment in the next three years will exceed 3 trillion yuan, driving a total investment of 15 trillion yuan. Faced with an increasingly broad development prospect, how tourism enterprises can seize the market, with resource integration and differentiated strategies being the key.
Listed company Tempe International (stock code: 300178) acquired the online travel platform Xinxin Travel last year, officially entering the big tourism ecosystem, and raised 1.6 billion yuan through a private placement this year to deepen its big tourism layout, expanding from a hundred-billion-yuan scale market to a trillion-yuan tourism market. Based on its existing foundation in major transportation, Tempe International integrates resources in areas such as accommodation, cruises, visas, and tour routes, focusing on new high-end tourism projects like cultural tourism, sports tourism, and medical tourism, seeking a differentiated development path. With the successful experience of Xinxin Travel, Tempe International will carry out comprehensive big tourism business layout.
I. Guaranteeing customer sources, entering the MICE market through TMC
According to a report by the Forward Industry Research Institute on the MICE (meetings, incentives, conferences, and exhibitions) tourism industry, China's MICE transaction volume is expected to reach 180 billion yuan by 2017 and maintain a growth rate of over 20% in the next five years. The report concludes that MICE tourism is the most valuable part of the high-end tourism market, characterized by high consumption levels, rich activity content, relatively high profits, and high demands on service providers' professionalism, operational capabilities, and resource integration abilities, making it a gold mine yet to be tapped in the tourism industry.
Tempe International is one of the earlier domestic service providers to enter the TMC field and currently has 3,000 enterprise clients both domestically and internationally, ranking among the top in China. Therefore, it is a natural progression for Tempe International to develop MICE business, possessing innate advantages and inherent resources in customer sources and services. Relevant officials from Tempe International stated that their MICE business will focus on improving corporate client satisfaction, emphasizing the establishment of long-term cooperative relationships, with a primary focus on conference event management and incentive travel.
II. Channels are king, maximizing platform value
After its successful listing, Tempe International developed a diversified range of business lines, but overall, B2B remains its flagship business. Based on its two major online travel trading platforms, 8000Wings and Xinxin Travel, Tempe International has accumulated a huge B2B user base, growing from 10,000 before listing to 200,000 today. B2B users are of higher value, characterized by repeat consumption and high loyalty. Tempe International’s GSS system and 8000Wings, two major flight ticket trading platforms, have gathered 80,000 agency clients, creating substantial transaction volumes. According to Tempe International’s 2015 semi-annual report, its flight ticket business transaction volume reached 18 billion yuan. It is evident that after airlines canceled agency commissions, the market trend has clearly shifted toward concentration among leading players. As the ticket agency industry as a whole transitions toward big tourism, the expansion of Tempe International’s own tourism business will also drive the transformation and upgrade of these B2B clients, accelerating their evolution. Meanwhile, Tempe International’s subsidiaries in over 40 cities nationwide, together with the online Xinxin Travel platform, will create a complete online-offline tourism distribution channel. Tempe International will seek acquisition targets that control resources for new tourism products from the supply side, then distribute them through its vast B2B channels, connecting the entire industrial chain to maximize platform value.
III. Financial tools, diversified monetization capabilities
Tempe International is among the earliest and deepest entrants into the financial sector within China’s tourism industry. Therefore, the multifaceted and multi-level application of finance in tourism will give Tempe International more diverse monetization capabilities. For example, by integrating its third-party payment platform, Tenpay, into its own platforms and channels, Tempe International has achieved secondary monetization, enabling account connectivity between tourism and finance through online “authentication payments” and offline “MPOS” mobile payment methods. Using the big tourism ecosystem as a whole as a customer import platform for internet finance, and leveraging finance as an amplifier of ecosystem returns, Tempe International achieves fund deposition through Tenpay third-party payments, directing the transaction flow of the big tourism platform into the Tenpay system to amplify returns.
National policy support will add fuel to the already bustling tourism industry. By staying outside the fierce price wars, Tempe International skillfully utilizes TMC and B2B channels for differentiated development, enhancing profitability through financial means, and better achieving product innovation through resource integration, thereby building a more vibrant big tourism ecosystem.