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    Knowledge creation on China, from proven China experts.

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Tuesday, March 31, 2020

COVID-19: Crisis and Opportunity for China’s Tourism Industry

By Tang Zhao

This Chinese Lunar New Year should have served as an “Indian summer” in the tourism industry. The industry expected to greet more than 450 million customers, but the COVID-19 outbreak caused tourism consumption to suffer instead.

Tourism is an environmentally sensitive industry, characterised by its susceptibility to shocks from domestic and foreign incidents, which can result in downturn leading to crisis. Compared with other dangerous incidents, the outbreak of infectious epidemics pose the most severe, extensive threat to the industry.

According to the impact on the number of travellers, the development of a crisis incident can be divided into five phases – incubation, generation, outbreak, decline and disappearance. In the case of SARS, the peak period lasted from March to June 2003, but business suffered the entire year.

The COVID-19 outbreak’s impact on the tourism industry may also continue for roughly a year. The main reason is that after the epidemic, even if restrictions on inbound and outbound travel are lifted, people still have concerns about travel.

“Crisis” and “opportunities” often go together, however, and each major incident has bred business opportunities. Despite the impact of the outbreak, it could actually accelerate improvements in the industry in a number of ways:

First, by driving the reshuffle of traditional tourism and the refreshing of new tourism models. The industry should focus on customer needs, customising its products, optimising product expressions and refining operations, as well as adhering to establishing long-term relationships with users. Service providers also need to stay in touch with customers, thereby securing customer loyalty and maintaining a keen sense of their needs.

Second, by advancing the digitalisation of the tourism industry. Online short video marketing has received a lot of attention during the epidemic, and offline tourism operators could now consider reaching users through short video interactive projects.

And, third, by encouraging the use of hotels, resorts or other similar tourism venues as lockdown facilities to quarantine large numbers of people during periods of crisis.

Tang Zhao (CEIBS HEMBA 2018) is the Founder and President of Sunarea Group.