Chinese New Year or the celebration of the Lunar New Year is Asia’s most celebrated annual holiday, and in years gone by, the movement of people, either visiting families or travelling to vacation spots, has been a logistical challenge and yet, the arguably biggest business opportunity for hotels and hospitality business on this side of Asia.
As with most other events that had to adjust, change or take a break, Chinese New Year will be very different in 2021, due to the pandemic we’re living through. This will have a profound impact on the travel industry, and below, we look at some of the things hoteliers can expect.
Interpreting Search Signals
If we look at Sojern’s recent research on expected traveller behaviour across Asia Pacific around the Chinese New Year period, in terms of length of stay, pre-COVID, almost 14% of Singapore residents were planning to stay on holiday for a minimum of 4-7 days. Now, that number has gone down to just over 5%, with more than 94% planning to stay away for only 0-3 days. Intriguingly, in Malaysia, that notion is somewhat reversed, as more travellers are now planning to stay away for longer.
Arguably, what’s most compelling is the fact that lodging search is now taking place a lot earlier than in pre-COVID times. For example, pre-COVID, less than 5% of Thai travellers looking for accommodation would start their search 91+ days before the actual travel dates. Now, that 5% has increased to just under 50%, marking a surge of 10X.
Early Planning for Travellers
This early planning is particularly evident at the border between Hong Kong SAR and the Chinese Mainland in Shenzhen. The border is an intriguing insight into the impact of quarantines on the general planning process around Chinese New Year celebrations and trips. As per the South China Morning Post, those that are visiting families on the Mainland are now starting their journeys a lot earlier than ever before. In fact, the peak of departures via Shenzhen Bay was recorded on January 4th, with just under 3,500 crossings taking place on that day. That’s more than a month ahead of the Chinese New Year holidays.
The sentiment of travellers returning home is very obvious as well, with one particular border-crosser stating that “as soon as I come out of quarantine, I’m going directly home to my parents at lightning speed, I miss my dog.” What’s more, 90% of those crossing into Mainland China were actually Hong Kong residents, so they are expected to return post-celebrations and undergo another compulsory quarantine.
Shorter Journeys
A Reuters article focused on Mainland Chinese travellers emphasises the increase in journeys with reduced travel times. Quoting Qunar, an online travel platform based in Beijing, the article highlights that “the trend is taking a train to visit cities within the reach of one hour,” despite the fact that overall bookings are up 1.8 times year-on-year.
Photo by Nuno Alberto on Unsplash
Among the hottest train tickets for travel in China you’ll find the journey between Shanghai and Hangzhou, a trip that takes less than an hour and reveals as to how attractive vacationing in your proverbial backyard has become in 2021.
Fewer Restaurant Visits
Eating out will certainly be restricted during this year’s New Year celebrations, so people are getting creative. In Forbes Magazine, New York-based Aly Walansky proposes a virtual celebration that is based around decor and presentation, and given the times, taking these celebrations virtual is just as realistic as many other things we managed to take virtual last year.
With restaurant visits being a lot less possible this time around, takeout options will be critical for those that celebrate. For instance, have a look at what some Toronto-based restaurants did for New Year’s Eve as far as takeout dinners are concerned. For hotels based in Asia Pacific, this is an opportunity to keep the kitchen busy, and with strong marketing campaigns, it’s even possible to sell more covers than during a traditional dine-in experience for Chinese New Year. Certainly a good way to capitalise on the holidays and increase hotel revenue.
What Does All This Mean?
A reduced length of stay, mostly due to expected quarantines on the way in or out of the sought after destination means a reduced amount of time hotels get to benefit from when it comes to engaging guests and generating more revenue from each traveller. In other words, with such time constraints, it’s critical for hoteliers to maximise engagement from every digital touchpoint to upsell any ancillary services that are on offer during a time when people are more liberal in spending their dollars. This translates into additional revenue, powered by your ancillary services.
With planning taking place a lot earlier, there might be an opportunity in the short-term and last-minute booking channels, as fewer hotels will want to compete for this space on search platforms like Google. With that in mind, gaining leadership in the last-minute segment might be as easy as ever, and given the size of most hotels, occupancy could still drastically benefit from a considerable focus on short-term bookings.
Shorter journeys to travel destinations is something that hoteliers can quickly react to by adjusting the geographical reach and focus of their online advertising campaigns. If the sentiments seen in the Chinese market translate to markets such as Thailand for example, hotels in cities like Bangkok might want to focus a larger share of their advertising budget on “heads in beds” from nearby cities such as Hua Hin or Pattaya.
Aside from traveller impact, it’s also important to take a look at how people will dine this year, in comparison to previous years. Restaurant visits are restricted, so hotels can take advantage of this and increase their food delivery volume, with menus that are specifically designed for dining at home.
In an arguably more creative twist, hotels could also look at becoming centres for the virtual Chinese New Year experience, where local residents get to make use of purposefully decorated rooms that facilitate the family Zoom meeting over a shared eating experience.
In many ways, the changes to traveller behaviour as described above are not only relevant during the Chinese New Year period, but they will certainly be seen again in the future, especially when unplanned events take place or globally impactful problems occur.
What Does the Future Hold?
We have arguably used the expression “pent-up demand” a lot in this industry, and despite the repetitive nature of this narrative, indications are that pent-up demand is a real thing; just look at Dubai’s occupancy recovery below.
In that sense, many of the changes and the proposed strategies might not be of regular long-term relevance, but hoteliers will certainly benefit from a more dynamic approach to their business. Being able to react to such short-term changes will arguably equip hotel staff to better deploy their budgets in the future, and accepting regular business interruptions in the future will lead to a more comprehensive response package.
That response package includes both a more advanced digital infrastructure and a more flexible approach to running hotel operations, without becoming too dependent on specific traveller groups or seasons. While doing this may or may not increase hotel revenue, it will guarantee a more sustainable strategy for hotels moving forward. What’s more, designing such a response package will likely turn hotel staff into more rounded business professionals that align with both modern technology and traveller sentiments.