CONSUMER TOURISM APPETITE BOOSTS CATEGORY EXPANSION
With a value increase of 39 percent, travel agencies tied with airlines as the fifth fastest growing category in the BrandZ Top 100 Most Valuable Chinese Brands 2016. Both categories benefited from domestic and international tourism.
Two travel agencies ranked in the in the BrandZ China Top 100. CITS, a State Owned Enterprise (SOE), established in 1954, grew 32 percent, and the Internet brand, Ctrip, increased 40 percent. The vitality of the Chinese travel industry drew competition. Alibaba launched a travel business called Alitrip, formerly Taobao Travel.
Despite the economic slowdown, China continued to lead the world in outbound travel. Chinese outbound travel grew 12 percent in 2015, according to the World Tourism Organization, an agency of the United Nations. The China National Tourism Administration expects the growth rate to slow slightly to around 10 percent, or 130 million outbound trips, in 2016, because of devaluation of the yuan and other factors.
Travel is a spending priority for Chinese consumers. In BrandZTM research conducted following the steep decline in the Chinese stock market, about half of the respondents planned to complete travel plans, regardless of the stock market’s poor performance; 38 percent indicated they might postpone their plans; and only 13 percent said they would cancel them.
Travel agencies took steps to benefit from this travel proclivity. Ctrip purchased a stake in India’s online travel site, MakeMyTrip, for example. Meanwhile, Ctrip contended with other online competitors and with several reputational challenges. Ctrip’s stock price fell in May 2015, after hackers penetrated its site. Early in 2016, Ctrip blamed vendor partners for fraudulent ticket incidents that quickly went viral on social media.