Online Travel Sectors in China Succeed Where Others Fail

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Online travel booking value exceeded 100 billion Yuan in the second quarter of 2015, which is a new threshold for China. This equates to US$15.61 billion at today’s conversion rate, but would have converted to closer to US$16.10 billion at the time. This increase in the online travel sector may be due to smartphone growth, although the travel sector has been growing steadily overall.

Online Travel Reservations Part of an Emerging Trend

Internet research agency Analysys International reports that the final online travel figure for 2015 Q2 breasted 106.2 billion Yuan. This represents 12% quarter-on-quarter growth, and is a 56.7% improvement year-on-year. During the first 6 months of 2014, Chinese nationals went on 61.9 million overseas journeys and made countless online purchases. This only filled a corner of the suitcase, compared to the 2.02 billion holidays taken in China.

Inbound Foreign Travel and Implications for the Yuan

In 2014, China’s National Tourism Bureau reported a slight but steady decline in incoming tourists since 2007. This can not have been because of lagging online travel activity in the West, because it was already largely mobile. The Bureau blamed the western economic recession, currency exchange fluctuations, and the ‘lack of novelty and competitiveness’ for the phenomenon. It introduced various counter-measures including a seventy-two hour, visa-free transit policy.

Recent manipulations of the Yuan exchange rate are a clear indication that the Chinese government is concerned about the balance of its payments. The widening gap between inbound and outbound travel must be influencing these numbers too, whether the seats were booked on online travel sites or in conventional travel booths.

The Future of China’s Inbound Travel Industry

The weeks and months that follow will show the extent to which inbound Chinese tourism is price-sensitive, and the knock-through effects of a weaker Yuan and a stronger U.S. Dollar. This is once again dominating world exchanges and showing signs of influencing online travel bookings too. Clearly, China needs to take action soon!

About Author

Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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