Is China’s Tourism Slowing Down?

China Bubble Burst

There are some that suggest the surging Chinese outbound market is haltering due to the very recent economic indicators coming from China. Is this an accurate analysis of the financial situation’s impact on the Chinese outbound market? Will America’s Chinese inbound market go in to a free fall? What should our strategy be?

We should look beyond the immediate situation and take a broader perspective on the realities facing China, and more specifically, the traveling Chinese middle class.

China has two financial exchanges, one in Shanghai and the other in Shenzhen. What has taken other countries a century to create, took China about ten years. In very simple terms, the purchase of stocks was at fever pitch, fueled by many unsophisticated buyers; meanwhile the economy itself was in a cooling off phase.  The perfect recipe for a “bubble”. And the bubble burst.

The market had been trading at a growth rates of up to 130%. When the bubble burst, share value dropped by about 30%. The Chinese government intervened and inserted strict financial controls and other support mechanisms and within 48 hours the market bounced back. Those that lost money were latecomers to the party, while others lost some of their earlier gains. A little later a further adjustment took 8% of the market value but has again stabilized. However, those investors still held on to major gains.

We need to put the stock market growth, bubble and immediate bounce-back into perspective. Small events in China appear big to the outside world. Within China small events remain small. It has a population of 1.35 billion (4 times that of the USA), of which about 50 million households invest in the stock market, with a typical investment portfolio representing about 12% of their total assets. Remember that China is big. (Okay, an overstatement). China will continue to have the disposable income to travel with a ferocious appetite.

Not only will the Chinese continue to travel in ever growing numbers but we will see the continual increase of younger independent travelers transitioning from the traditional groups. When we analyze who is traveling we see that travelers aged under 35 make up 62% of outbound travelers.

These independent younger Chinese travelers are very comfortable with the planning process. They are also very tech savvy. Since Google is blocked in China, the domestic search engine Baidu has a stronghold on the country’s online search process, maintaining an approximate 70% market share. If you travel to Hong Kong or Taiwan, or even further afield to Thailand you will see large numbers of individual (F.I.T) Chinese travelers, who have made their own arrangements through authorized Chinese travel agents and who are welcomed with open arms with many Chinese  signs, menus, and other China Ready elements. There is no slow down in Chinese travelers visiting these easier to reach destinations.

And equally there is no slow down in sharing of travel experiences through the very popular Chinese social sites such as Weibo, (Facebook meets Twitter plus a search engine), Douban (“lifestyle and culture” social networking service targeting 20-35 year olds), WeChat (text and messaging with push message capabilities), YouKu (Similar to YouTube with User Generated Content and a growing number of glitzy  professionally produced video material), – and most of this is accessed by mobile devices. The percentage is a staggering 80% of the 650 million that use the internet. Clearly, if your information is not mobile friendly you are not “China Ready”.

The sharing of travel experiences is growing fast and this organic growth will not slow down. This thirst for exploring the world will only gain momentum. Additional flights to the USA will not slow down. As an example a new Hainan Airlines’ Beijing to San Jose flight started operation mid June with 5 flights a week and almost immediately Carmel began seeing the impact. A new visa waiver program making it easier than ever to get an extended US visa will not slow down visitation.

The reality is that only 7% of the Chinese population has a passport. Certainly room for growth. Here in the USA just over 40% have a passport. The pent up desire to visit and experience America will not slow down, not even by occasional financial market adjustments. The curiosity of the younger Chinese will not abate. Merrill-Lynch projects that by 2019 the number of Chinese tourists will total 174 million and they will spend US$264 billion, up 60% from 2014. Everything connected with China seems to be a numbers game.

Let’s not forget the strong emotional aspiration to experience the world that cannot be ignored. The Chinese traveler’s desire to visit our wide open spaces, enjoy our fresh air, our national parks, experience our lifestyle, visit our historical places, visit our theme parks, and simply enjoy the freedom our country has to offer.

I tend to agree with Apple CEO Tim Cook and his prognosis on August 24th that the “growth of the (Chinese) middle class over the next several years will be huge”. For us in travel and tourism this is not a time to cut bait and run. This is a marathon not a sprint.

(Bob Gilbert is a Partner in Chinese Host Inc., the largest Chinese inbound operator in the Western USA)

Now hotels can re-position the OTA playing field

TabletWho remembers Sidestep? This was probably the first metasearch tool I used and a few years before Kayak emerged in 2006 (Kayak acquired Sidestep in 2007). Since then, the ongoing love/hate relationship between hotels and OTA’s has ratcheted up a few notches.
Over the past 30 years I have been trying to win the loyalty of my customer. Probably 20 of those years I spent at the sharp end directly managing the relationship with my guest. Since the early 2000’s the landscape has continually changed. My competition, which was fairly straight forward (my comp set), now includes OTA’s and a plethora of additional intermediaries designed to squeeze my margin and attempting to steal my guest. The big difference is that they don’t have a bed or a hotel or room service or spa’s or restaurants.
As a result of intense OTA marketing and PR, many hoteliers simply gave up and sold their souls together with a chunk of their profit to the OTA genie behind the curtain. They also threw in the towel and resigned themselves to the fact that they were no longer in control of their customer. Worse than that, they were helping  build a third party brand while devaluing their own.
Don’t misunderstand me. I am not a jealous hater. OTA’s are not bad guys, however, over-dependence on any third party channel is simply poor revenue management at best or perhaps lazy revenue management at worst. I would rather pay a travel agent 10% commission on consumed business than 20% to 50% (or more) to an OTA, TravelZoo, Groupon or Living Social.
But ask yourself… this business you would not attract yourself? Does it really drive incremental guests? In addition, do you have a channel strategy? Do you have a Revenue Management system and a capable Revenue Manager? Do you really know how much you are driving the bottom line?  Have you identified and measured the long-term value of your direct customer specific to ancillary revenue and repeat stays versus bookings coming through the OTA channels?
Based on STR research for the American Hotel & Lodging Association, direct bookings outperform OTA’s nearly two-fold in ADR, nearly twice the length of stay, and three times the room revenue – not to mention ancillary spend.
TripAdvisor has been able to build a sensational business model based on user generated content, guest reviews and interactive forums. It plays on the concerns that consumers do not want surprises when they travel for business or leisure. Consider this; according to TripAdvisor, nearly 2,800 new topics are posted every day and over 90% of questions are responded to by other travelers within 24 hours.
Meanwhile search engine giants have been patiently waiting on the sidelines observing the gains that OTA’s have been making and weighing up their options in the hotel booking arena and will certainly make their moves to further encroach on dwindling hotel margins. The big are getting bigger and getting better at what they do.
In addition, according to hospitality industry expert Cindy Estis Green, CEO Kalibri Labs, research shows that customer acquisition costs are rising at twice the rate of revenue growth. This is clearly unsustainable.
After all the due diligence, consumers like to book direct with the service provider. They seek out the authority, the source of the information. Consumers want to engage and ask questions and get answers directly from the source not a third party. How does a hotel compete against the juggernaut OTA’s .
One answer is a MetaSearch booking tool. This enhances the consumer booking experience and places them face to face with the hotel and the best rates and specials. Some nifty service providers in this space allow rates pulled directly from the Internet Booking Engine and delivered seamlessly to the MetaSearch channels of choice. This approach eliminates the need for hotels to allocate inventory or update an extranet and provides a single admin for managing bids and budgets across all platforms. This puts hotels in a top placement position for Google Hotel Price Ads (HPA). Consumers get to see these hotels first. This allows the consumers to click directly to the hotelier’s website to complete the transaction. In addition the same functionality can work on TripAdvisor, Trivago, Kayak, Skyscanner etc.
A couple of these MetaSearch booking service providers have sophisticated administrative options that include built in bid management tools, dynamic real-time ROI, (real time not monthly reporting dashboards)  and some can even be structured by brand and market to maximize efficiency. As with Revenue Management, true success demands that somebody is actively managing this process. Like spaghetti sauce, you can’t just put it on the stove and walk away.  It really does require attention and adjustment as necessary. But the outcome is well worth the effort.
One iron clad certainty is that this will continue to be a fast moving space but finally hoteliers are being offered more sophisticated tools and refined options to compete more equitably with OTA’s and other third parties and can leverage the online and offline relationship they have with their guest.
Consumers will always prefer to book directly with hotels rather than OTAs. Guess what, so do hotels and MetaSearch booking tools have just made this a lot easier. If this is not in your 2015 business plans I suggest you add it today.

The Art of the Sale

Smarter Sales


I was talking with a veteran sales professional and we were discussing what makes a great sales person? Are people born with the sales DNA or is it learnt? Art or science? Making this question more challenging, the journalist asked me to list my top five essential characteristics of a great sales person. Just five !! The bigger challenge was more about what characteristics to leave out. What would or wouldn’t make the cut.

I have been selling or marketing for over 30 years. Along the way I have witnessed super sales skills and also learnt from my own mistakes. I have looked and listened to others, and tried to replicate winning behaviors and characteristics of successful sales people all over the world. I am not suggesting that a sales approach in Paris, France will translate into success in Paris, Texas but there are common traits.

Too many companies undervalue the tremendous value a well-trained sales team contributes to the success of the organization. When I worked in Germany I was given a customized German street sign that said “Wirallelebenvomverkauf”, which roughly translates to “We all live from sales”. Nothing happens until somebody sells something.

Before I share my top five list, I am of course assuming that the company has…….

  • Recruited the right fit Rock Star sales people

  • A motivating incentive plan that has effective stretch goals

  • Clearly defined performance measures and recognition program

  • Top shelf training program that continues to raise the bar

  • A “C” level sales champion to crusade internally on behalf of the sales team

  • The best sales tool box and tools to get the job done

Here is my short list of five winning characteristics that help define the Art of the Sale.

  1. Trust

Gaining trust and confidence from your customer will accelerate your conversion rate. You have to demonstrate that you know more about the customer’s company than they do. Devour annual reports, press releases, LinkedIn, Glassdoor, and related articles. You have to show that you understand the goals of the company, and you have to position yourself as a reliable asset that will help them meet and exceed their goals faster. This means being open and candid and the ability to confront reality. Don’t get sucked in to the hype of your product or service. Can you deliver on time, at the agreed price, and working as promised? Can you share “bad” news constructively?

Trust is earned. When your presentation is over and the lights are turned back on it comes to down to the simple principle of whether you trust each other. If the answer is yes you will both find ways to reach consensus and a deal. Successful sales people have figured out that trust is the fastest route to results. See more about the Art of Trust here

  1. Resilience

Success is not an overnight phenomenon. It is not easy. Success is a demanding. It is not giving up. The below statistics are more urban legend than reality (cannot trace a definitive source) but seem reasonable. The key question is how long it takes to close the sale.

  • 2% of sales are made on the 1st contact

  • 3% of sales are made on the 2nd contact

  • 5% of sales are made on the 3rd contact

  • 10% of sales are made on the 4th contact

  • 80% of sales are made on the 5th-12th contact

Having the right mindset and drive to pick yourself up after every time you are knocked down defines a winner. It defines resilience and it reminds me of the famous Vince Lombardi quote “It does not matter how many times you get knocked down, but how many times you get up”. Listening to many successful business owners, they all share the fact that success was eventually gained through a number of failures. But they all learned from what went wrong and did not repeat the same mistake twice.

Part of resilience is an honest understanding of your sales pipeline. So many sales people look at the sales pipeline through rose-colored glasses. What is the reality of your situation? Do you have your prospects listed with identified needs, anticipated close date, percentage of probability and an estimated gross revenue? With this simple tool you will have created a basic pipeline tool with a snapshot on your future sales. This tool keeps you honest and adds to your resilience factor as you keep knocking on doors to increase your ratio of success.

  1. Engagement

I have been fortunate to have led a number of global sales teams for iconic brands including Disney, Best Western, Choice Hotels and others. Many times I came across sales people who were brilliant “closers” and average “door openers”.  At the same time I have met great “door openers” and less than stellar “closers”. Naturally we’d focus on the weakness and try to raise the bar to Rock Star status. It didn’t happen all the time and we made changes. (So many organizations continue to employ poor performers which sends a negative message to all other sales people).

Getting inside the organization and engaging is the most important aspect of the sales process, especially if the sale has a large dollar value. Based on the product type or service being sold, there are varying degrees of complexity. More functions become involved with the purchasing process from both buyer and seller. This allows you to introduce subject matter experts and “a closer” if that is a skill that needs more work.

Filling the sales funnel is crucial. An empty sales funnel is a recipe for disaster. Getting your foot in the door and getting more qualified leads in to your sales funnel will only accelerate your success. Fundamentally, sales is a numbers game. The more sales calls you make, the more prospects will fill your pipeline and a certain percentage will turn in to customers.

If push comes to shove, I would prefer to recruit a great “door opener” than a great “closer” because in my opinion, this skill is tougher today than it’s ever been. Making personal relationships, gaining initial traction and demonstrating value is an incredible skill.


  1. Diagnose – Identifying the Pain

Remember that you cannot offer the remedy until you really know the symptoms. That’s like a doctor giving you a prescription without the examination. This is where great listening skills come in to play.

Every company has its pain points. These are the identified barriers to success. It’s what keeps “C” level executives up at night. You are the Knight in Shining Armor that will provide a solution to help make the pain go away. Your initial relationship building has enabled you to get inside the fortress. Now you start gaining valuable insight that will help you close the deal. This period of due diligence is an essential part of the process. You have to demonstrate a high degree of empathy through knowledge and understanding. You begin to identify pain points and frame up needs, timing, price sensitivity, and a decision-making process. A good tip is to always know way ahead of time who will actually sign the agreement. You don’t want to start the sales process all over again.


My father used to remind me that God gave me two ears and one mouth and I should use them in that order. Nobody likes the slippery tongued salesman (except the slippery tongued salesman). People do like to be intrigued, engaged, and understood. Gaining traction on a business and personal level will pay dividends and is the foundation for a long-term mutually beneficial relationship.

5. Don’t sell yourself Short

Great sales people don’t sell their product or service short. Getting the sale through discounting is not helping your bottom line or reputation. Once you discount it is virtually impossible to climb out of that hole you dug for yourself. Your integrity is at risk if you do not value your product or service. There is a reason you are at the bargaining table. Your prospect has a need and you have the solution. You are holding a highly valuable card – the value card. You have identified the pain points and your solution has intrinsic value. The price placed on value is variable. Like beauty, value is in the eye of the beholder. Value is a perceived concept. Is your pricing reasonable in this context? Do you have the confidence in your  product or service and are you prepared to walk away from a sale, if necessary?

Make sure your conversation is focused on the value of your product or service and not focused on the price. Naturally this is always at your discretion but leave that price negotiation as an available option when you start talking volume or term length.

Final Thoughts

The Art of the Sale is  (forgive the cliché) a journey not a destination. Successful sales people view customers as investments. It’s about the long haul and how one extends the life time value at a mutually beneficial pace.

If you control a sales and marketing team and budget, power up your calculator and look at your top performing sales people and see what impact a reasonable lift of 15% in sales revenue will have on your bottom line. Invest in great sales people and effective training. See if you can clone that sales Rock Star’s DNA, improve marginal performers, ensure accountability and remove those that continue to underperform………….and hire smart.  Your future customers will reward you for it.


The Art of Content Strategy

Content Strategy 2

For years we have known that Content is King. More recently (our current Social (R)evolution), we have engaged Content in a different place. Namely, at the intersection of Search and Social.

Sometimes we shy away from content because we don’t understand its hierarchy in our attempts to captivate and intrigue the customer. Traditionally, content is for publishers. However, by having a website automatically makes us a publisher. We need to think as a publisher and act as a publisher. Our audience thrives on content. Relevant content, refreshed on a regular basis is a necessity. No news is actually bad news.

Content has re-emerged as the marketing go-to superstar in the social world we live in. Yet so many companies do not have a Content Strategy. First we have to agree on what a Content Strategy is all about. To me, it is simply stated as “getting the right stuff, to the right folks, at the right time, in the right channel, on the right device”. Easier said than done. The customer is at the epicenter of the universe attacked by a non-stop barrage of whirling junk debris and we as customers have become smarter and do a decent job of avoiding this clutter.

How do we avoid being part of the clutter? Embracing the “getting the right stuff, to the right folks, at the right time, in the right channel, on the right device”  definition, where do we start ?

We start with customer insights. Understanding needs and wants and delivering a ‘sensing and serving’ approach to the customer. As seamless as possible. Data driven. Relevant, timely and personal. A good Content Strategy will extend the Life Time Value of your customers.

Successful Content Marketing is developed by organizing your customers into clusters or persona’s. This allows us to message appropriately. It keeps our eye on the ball and we can build Objective Profiles that relate to your defined customer group(s).

As we gain insight from this defined group we determine the triggers that will drive them to (as an example) your website. The goal here is to get your product or service, your destination or hotel, on to the radar screen and in to the consideration zone. But first we need to intrigue them with relevant content to fuel their planning and ideation process.

We should learn the timing of this from insights gained from the characteristics and behavior patterns of the defined group. Maybe even overlaid with transactional data.

Next develop your Communication Calendar. The Communication Calendar should again be driven by data insights. Preferably triggered by the customer as opposed to “Spray and Pray”. If you have specific events, make sure that you have created the persona group that will improve response rates and conversion. Remember the mantra “getting the right stuff, to the right folks, at the right time, in the right channel, on the right device”.

You are now ready to share your content. Make sure your content is the right content for the defined group. Is there anything missing? Do you need to grab additional content. Does the content fit the group. As an example, mountain biking content at a resort might not fit a customer group composed of Boomers. (Although a number of Boomers do enjoy mountain biking).

Today’s Über-Connected consumer can reach you from a multitude of channels and devices. Your content strategy should identify the various customer touch points. This requires some creativity in repackaging your content in to something that looks new and fresh. As an example; a series of top notch consumer generated themed photos collected over the last few months repackaged to tell a themed story. All content shared should be classy, polished and compelling. And remember that the first point of contact is likely to be mobile. Make sure you content renders well in this environment.

As you define your Content Strategy ensure your framework has good metrics. If you can’t measure it seriously consider it being part of your plan. What can’t be measured normally doesn’t get funded.

Another major reason for a Content Strategy (as if we needed another reason) is the continually changing algorithmic playing field from Google as they continue to tinker with their search bots. We have witnessed Google give content a higher priority over keywords. Cramming keywords in to posts and messaging doesn’t cut it anymore. We should be more concerned about the topic searched and make sure it is found in an authoritative and naturally flowing content. This landscape will be in continual flux as Google’s encrypted organic search keyword algorithms change in future updates.

Bottom line is that consumers love content, fresh compelling content…and so do Google bots.

So, let’s head in the right direction at the intersection of Search, Social and Content or you could be headed down Lonely Street and checking in to Heartbreak Hotel.


The Art of Trust


The story goes something like this….Need to plan a weekend trip….I have selected my destination and now I quickly look at TripAdvisor to read reviews on the hotels I am considering. Reviews from strangers that lead us to make a purchase decision. The power of social media, content and search…all wrapped up with a nice little bow. We trust strangers’ reviews, but ultimately it’s TripAdvisor we trust. It is TripAdvisor that, over time, built and earned this trust.

How did TripAdvisor gain this incredible trust factor? Trust builds better and faster results. Everyday new businesses emerge all focused on speed to market. But without the trust factor many are doomed. What should we be doing to build trust? Consider these ideas to get you started.

1. Keep it Personal
Treat your customers as individuals, which they are. Mass marketing died in the last century. Mass personalization took over. The more you can personalize and individualize the customer experience the faster you will win their trust and their business. Take a look at yourself. What do you think others would say about you? Are you sincere, reliable, respectful and dependable.

2. Transparency
Being open and honest will stand you in good stead. You don’t have to remember lies or half truths. Keeping honest is much easier than the alternative. If something goes wrong admit it and resist the temptation to spin. You will get found out and it is difficult to climb out of that slippery hole you dug for yourself.

3. Clarity
Has somebody ever said to you…”Well, technically…….” and whatever follows you know is a spin. You have be straight forward and squeaky clean to quickly gain trust. Use language that is unambiguous. Language that cannot be misunderstood. It is not as easy it sounds.

4. Talk the Talk and Walk the Walk
The cliché has been around a while but its message is extremely relevant in building trust. Always deliver on your promise no matter how small or how big. A wedding vow is a huge life altering commitment. Honoring your commitments in business is a significant factor that builds an incredibly strong reputation. Good reputations travel fast these days due to the viral dynamics of our social networks (i.e. TripAdvisor) further cementing and building trust driven by an independent social army.

5. Integrity
Being responsible and accountable will go a long way in building integrity. Integrity is one of the key pillars of trust. Having integrity in business means that you have values and guiding principles. Nordstrom’s taught the world about integrity and values. They built fiercely loyal customers because Nordstrom’s listened to them and served them, no matter what. Integrity is a passion. It is part of the Brand personality.

We recall Robert De Niro and the Byrnes family Circle of Trust from the 2000 movie Meet the Parents. As De Niro explained to Ben Stiller, and I paraphrase…… “If I can’t trust you, then I will have no choice than to put you outside the Circle of Trust and once you are out Greg, you are out, and there’s no coming back. You will never get back in.” In business, as in our personal lives, trust takes time to build but can be shattered in a New York minute.

Trust recovery is painful and never easy but if you find that you have over committed or cannot meet a promise or deadline, be the first person to immediately communicate the problem personally, apologize face to face or at least over the phone. Never with an email. Make a new promise and be 100% confident that you can keep that promise “as advertized”.

It’s no wonder there are many companies that have built a business around Reputation Management! Much needed by businesses like AIG, BP, Goldman Sachs, and a longer list of celebrities such as Charlie Sheen, Pee Wee Herman, George Michael, Hugh Grant, Paula Deen, Tiger Woods, Lindsay Lohan, Lance Armstrong…OK enough, I hear you say (as you add more to this list.)

You can trust me when I say that it is better to actually demonstrate trust than talking about trust. Trust, after all, is earned and needs to be part of your DNA.