Working in Market:
The travel distribution system in Hong Kong has taken a big step towards digital and online platforms, with traditional retail agencies promoting their online booking portals. OTAs aggressively market their services and airlines are offering direct special tickets on their own websites. Online booking has gained a greater percentage of conversion, but there is still a major bulk of consumer choosing to book through the extensive branch office networks of retail agencies, especially for the final payment of the booking.
Wholesalers/ Large Agents
Commission Level: 3% - 5%
- There are a small number of key wholesalers that offer commissionable packages to outbound travel agents.
- Jetour Holidays, Travel Circle International Service (trading as Kuoni) and Charming Holidays are the key wholesalers for group travel which offer programs to Australia. To ensure differentiation to major retail agents, this group of wholesalers promote niche and diverse products. Their business model also operates directly to consumers and had developed their own consumer brand and positioning to capture their market share.
- The Travel Industry Council in Hong Kong has 1,757 travel agent members, which includes 1,532 outbound agents as of April 2018.
- Key outbound retail agents have extensive branch office networks which promote ticketing and commissionable packages.
- Depending on airline pricing, retail agents adjust the inclusions and itineraries for Australia. Packages often have a limited ‘shelf-life’ and the frequent production of brochures and flyers provide an opportunity for different operators to become involved in tour programs at varying times of the year.
- Major retail agents are Wing On Travel, EGL Tours, Miramar Travel and Hong Thai Travel. They have an extensive network of branches and together account for over 80 per cent of group business.
- Other group retail agents in Hong Kong include: Goldjoy Holidays, Sunflower Travel, Premium Holidays, Morning Star and China Travel Service Limited.
- Major package retail agents include Travel Expert, Wincastle Travel, Westminster Travel, Lotus Tour and Jebsen Holiday.
- Other retail agencies such as Amusing Travel Plan Limited, Maywood Travel Limited offer attentive, theme and special interest itineraries to compete with major retailers.
- Throughout the year, these agencies drive tactical promotions with short lead times, promoting special value-add offers.
- The Aussie Specialist Program (ASP) is the primary platform for Tourism Australia to train and develop front line travel sellers to best sell Australia.
- As at December 2017, there were 1,636 qualified Aussie Specialists in Hong
- Online Travel Agencies (OTAs) active in the market are Trip.com, Trivago.com, Hotelcombined, Expedia.com
- New active one focus on experiences are Klook, KK Day and TravelFlan.
- Traditional group retail agents have also increased thier focus online in order to capture a larger market share of free and independent travellers e.g. Wing On, Hong Thai and Miramar
Inbound Tour Operators
Commission Level: 10% - 15%
- ITOs handle all group business from Hong Kong to Australia and play a key role in developing new itineraries and products for the Hong Kong market.
- Per Association of National Tourist Representatives in Hong Kong 19 existing members and Qatar is the newest member set up office in Hong Kong.
- Specialty tours for study, wedding, marathon have significant growth in demand. Retail agencies are eager to organize this category of tours for its higher profit margin.
- Tailor-made and small group segment emerge with partial land arrangement pre-organized such as hire car, hotel or apartment and slight parts of attraction. Most meals are not included into the itinerary and without tour escort.
- Family travel and aged around 50-60 are an important segment with strong spending power.
- There is a growing trend towards digital applications, apart from using QR codes for itinerary promotion, tradition print advertising is shifting towards online and social media advertising.
- Cruising company is expanding their presence and promotion activity in the market, offering intra-region and fly cruise package to capture outbound travel market share.
- Online booking consumes a big percentage on leisure travel bookings, however it loses its competitive edge for booking to travel during peak seasonal holidays by cause of inflexible ticket terms and fluctuation on air tickets and hotel rates and availabilities.
Planning and purchasing travel
- The most common Australian travel package is seven to eight days through Eastern Australia for group travel, and mono three to five night trips for the FIT market. Australia is considered a popular Western destination in Hong Kong and attracts repeat visitation.
- Competitive ticket-only promotion drive a new segment for Australia on conversion ahead of destination awareness and detailed itinerary planning.
- Value-add offers are key drivers, mature frequent travelers are prepared to spend more for higher quality products and services, such as five-star hotels or a business class upgrade with a competitive price.
- Weekends combined with public holiday are the most demand travel pattern, Hong Kong consumers tend to take frequent short breaks instead of a long break holiday.
- Printed materials such as guide books for destination information are still popular but there is a trend towards destination apps and electronic guidebooks.
- Caused by the slow economic development, at one end tourists are seeking for comfort/luxury travel products, at the other are people looking for thrills/budget travel.
PLANNING A VISIT TO MARKET
TOP TIPS FOR SALES CALLS
- As the turnover rate for retail agency frontline staff is high, it is worthwhile for Australian products to arrange in-house training for committed travel agent partners on sales calls.
- Value-add or competitive pricing offers during the low season travel period from March to June are useful to trigger tactical campaigns with travel agent partners.
- The best time for sales calls targeting low season business is after Chinese New Year. To capture high season business and have products included in itineraries, visit the market after Easter for July and August high and shoulder season, and August or September for Christmas and Chinese New Year high season.
- For more general information on sales calls and planning a visit to market, please see Tourism Australia’s 'Tourism Export Toolkit'.
Key Distribution Partners
Tourism Australia is a partnership marketing organisation and works closely with airlines and travel companies on cooperative marketing to drive conversion in all priority markets.
These targeted travel companies, including wholesalers, retail and online travel agencies, form Tourism Australia’s Key Distribution Partner (KDP) program with the intention to increase total booking value of visitors to Australia.
Each KDP is selected based on the fit with Tourism Australia’s market strategy, a shared target customer profile, shared funding of marketing activity, a commitment to training their frontline sales team through the Aussie Specialist Program and a commitment to selling quality Australian product and experiences.
Below are a selection of Key Distribution Partners that Tourism Australia is partnering with from Hong Kong for the 2017/2018 financial year.
- Cathay Pacific Holidays
- Charming Holidays
- China Travel Services (HK) Ltd
- EGL Tours Co. Ltd
- Goldjoy Holidays
- Holiday Tours (Qantas Holiday)
- Hong Kong Wing On Travel Service Ltd
- Hong Thai Travel Services Ltd
- Hutchison Travel Ltd (formerly Hutchison-Priceline)
- Jetour Holidays
- Kuoni Travel (China) Ltd
- Lotus Tours Ltd
- Miramar Travel Ltd
- Morning Star Travel
- SIA Holidays
- Sunflower Travel
- Travel Expert Ltd. / Premium Holidays Ltd
- Westminster Travel Ltd
- Wincastle Travel (HK) Ltd
- Zuji Hong Kong
WHERE TO FIND MORE INFORMATION
Tourism Australia’s activities in mainland China are managed from its offices in Shanghai, Beijing, Guangzhou and Chengdu. For more information, visit Tourism Australia’s corporate website at www.tourism.australia.com.
Australia State and Territory Organisations operating in China include: Destination NSW, South Australian Tourism Commission, Tourism and Events Queensland, Tourism NT, Tourism Tasmania, Tourism Victoria and Tourism Western Australia.
- An overview on the travel distribution system
- A quick reference on key booking and travel periods for markets
- Hong Kong Market Brief published by the Department of Foreign Affairs and Trade at: www.dfat.gov.au/geo
- For additional statistical reports refer to the ABS and TRA websites, www.abs.gov.au and www.tra.gov.au