Cross-border tourism development is booming, as international tourism has continued to grow for six consecutive years since 2015. The number will keep increasing over at least the next ten years. A statistic indicated that there were almost 1.2 billion international tourists in 2015, and it is expected to reach 18 billion by 2030. The international tourist receipts are also expected to grow from US$1,260 billion in 2015 to nearly US$2 trillion by 2026, an increase of more than 50%.(1) Frankly, I am not surprised with these figures, as all of us can witness how “travel” turns to an indispensable part of our lives, like for holidays, graduation, honeymoon, retirement, etc.. Tourism has become a "necessity" to some extent, and our contribution to "tourism" has created tremendous travel-related business opportunities for the market and also contributed to the overall global economic development.
According to the World Tourism and Travel Council (WTTC) data, it shows that the direct contribution of international travel and tourism was 3% of global total GDP in 2015, about US$ 2,230 billion. This number is forecast to rise by 4.2% in the next decade to around US$ 3,500 billion in 2026. In 2015, the total tourism receipts (direct and indirect contribution) accounted for about 10% of global GDP, equivalent to US$ 7,200 billion. (2) In a regional level, Asia and the Pacific were the most popular, receiving 9% more international arrivals, more than double of the global average increase of 4% in the first half of 2016. (3) It is expected that by 2030, the Asia-Pacific region will host the world's one-third of the international tourists. Across the Asia-Pacific region, China attracted the largest number of international tourists, followed by Thailand, Hong Kong, Malaysia, and Japan. The tourists visiting these five places accounted for 57% of international tourists in the Asia-Pacific region. The data shows that the top five international visitors of the major tourist cities in Asia, such as Singapore and Bangkok, were from other cities in Asia; for example, Hong Kong contributed the most tourists in Bangkok. In 2015, up to 1.5 million Hong Kong visitors in Bangkok contributed more than US$ 100 million. (4)
Among Asian tourists, Chinese tourists are the key to the development of cross-border tourism. In 2015, Chinese tourists were the world's top spenders in international tourism receipts with spending around US$ 290 billion, which is approximately equivalent to Singapore's GDP. Compared to the second-ranked American tourists, Chinese tourists spent nearly more US$ 180 billion than American tourists. More noteworthy is that currently only 5% of China's 1.4 billion population have passports, which are about 70 million people. (5) Assuming there is a slight increase of 1% in the number of passport holders, the overall spending will increase by US$ 52 billion. Today, in order to seize this group of affluent Chinese tourists, consumer brands as well as government departments and institutions are trying to interpret the behaviors of Chinese tourists.
It is estimated that a Chinese tourist goes abroad nearly two times a year on average. Tourists from Mainland China spend an average of almost a quarter of their income each year. Late 90’ and 60’ spend more sumptuously than 70’ and Late 80’: they spend the most on shopping accounting for up to 35% of their total spending, followed by hotel accommodation(21%), and traffic (14%). Their travel mode is gradually changing. The tour companies no longer run the show, while backpacking and half backpacking will be a major trend. The Chinese tourism experts estimated that it has been a booming backpacking trend going on since 2015, and will last for ten years! 95% of Chinese tourists brought smart phones while travel, and 80% of these people said that they used the mobile apps to arrange itineraries. (6) This behavior of highly dependent on the smartphones is the key to the vigorous development of big data, also the basis for companies to master the cross-border marketing business opportunities.
Some people said, "Get mobile data, then you get the world." Compared to computers, smartphones collect more personalized and comprehensive online user behavior effectively, so it is easier to build a big database and receive data including advertising ID—IDFA/GAID, mobile phone operating systems, user's locations, and so on. All of the above have become the big data cornerstone of cross-border marketing that allows to efficiently target at international tourists. With this stable foundation, the artificial intelligence can have in-depth and accurate understanding of the habits and preferences of international travelers in three different stages of tourism (pre-trip, during-trip, and post-trip) by analyzing the data, and to create a better conversion rate for brands.
To take a real example, in order to build up the brand image and encourage Chinese tourists in Hong Kong to increase the usage of its credit card, a credit card brand targeted to deliver mobile ads to Chinese tourists while traveling in Hong Kong. The first step was to identify Chinese travelers in Hong Kong by detecting the users’ phone language settings and online behaviors, and then based on the users’ different online behaviors and habits and the result of consumer data analysis, to put focus on delivering ads on the mobile phones of potential consumers. Vpon optimized the advertising strategy depending on variables such as operating systems, Internet access, personal interests, and so on. We found that the ad engagement rate of iOS users was better than that of Android users, people turning on data roaming on their smartphones got a higher click-through rate on ads, and shoppers were more likely to engage with ads than food lovers or travel enthusiasts were. Finally, through multi-dimensional targeting and continuous ad strategy optimization, the click-through rate of the campaign increased by nearly 30%.
Another example of a positive result is from the hotel industry. The world's largest hotel group attempted to attract Chinese tourists to become members through mobile advertising and thus to build the long-term relationships. With monitoring the real-time mobile data, Vpon optimized the campaign from diverse approaches. Specifically, in terms of time, the media budget was allocated during the evening hours, while avoiding the morning or commute hours. As for geographical locations, the mobile ad was delivered to the mobile devices detected in the first-tier cities with high-income and more potential international tourists, cities including Beijing, Shanghai, and the eastern coastal cities. Regarding ad creatives, the mobile ad were mainly the interstitial ads with the highest conversion rate, and reduced the usage of banner ads and native ads. As for the operating system, the ad strategy put focus on the Android phones with higher conversion rate. The number of conversions kept increasing due to the optimization, reaching a significant increase of 40% and effectively raising the number of registered members.
More importantly, these data are not one-off or one-way, which change through continuous tracking and interaction. With accurate audience tags added in the data management platform (DMP), Vpon has more comprehensive understanding for each international tourist, and the retargeting also comes into being. Regardless of where the target audience is, the brands can reach them continuously, not only increasing their brand loyalty and engagement rate, but also clarifying the audience profile in the database. For example, a retail brand uses retargeting to deliver ads to international travelers who are interested in the brand, and the feedback and behavior of the target audience will be collected, labelled accurately, and then analyzed, including whether and when to click on ads or shopping, how they get online, media, and so on.
Big data creates marketing accuracy, and finds the most suitable entry point in all travel scenarios for all industries. However, big data is not a panacea, which has to meet the brand's goal and strategy to maximize the effect. In the “before-trip” stage, the cross-border marketing is suitable for national tourism bureaus, hotels, travel agencies, and airlines to deliver ads to the target audience who once searches destination information, local accommodation, and traffic information. For the “during-trip” stage, the solution aims for retailers, credit card issuers, and any companies who would like to reach international tourists, because at this stage tourists are easy to be attracted to the shopping information in the nearby area. The cross-border solution features the O2O (Online to Offline) deployment which can significantly encourage tourists to use the brand services while traveling in the destinations. Finally, in the “post-trip” stage, the solution is suitable for retargeting customers who have once shown interests, so that brands and consumers can establish long-term relationships.
For those who want to seize the opportunities of international tourism business, using big data-driven cross-border marketing is inevitable. Only through data can a brand create an ideal ROI. It is important to take advantage of the big data of smartphone users to accurately reach the target audience, and to reach them based on different stages of their entire journeys to successfully unlock the potential of big data.
About the author:
Victor Wu, CEO of Vpon Big Data Group, believes that "Data drives transactions," and any industry should be equipped with the competitive weapon, the big data.
- UNWTO Tourism Highlights 2016 Edition [http://www.e-unwto.org/doi/pdf/10.18111/9789284418145]
- Travel and Tourism Economic Impact 2016 [http://www.wttc.org/-/media/files/reports/economic%20impact%20research/regions%202016/world2016.pdf]
- International tourist arrivals up 4% in the first half of 2016 [http://media.unwto.org/press-release/2016-09-26/international-tourist-arrivals-4-first-half-2016]
- MasterCard 2015 Global Destination Cities Index [http://newsroom.mastercard.com/wp-content/uploads/2015/06/MasterCard-GDCI-2015-Final-Report1.pdf]
- 中国旅游研究院、携程旅行网发布《消费升级：2016上半年中国出境旅游者报告》 [http://www.ctaweb.org/html/2016-8/2016-8-5-14-49-41945.html]
- 中国游客境外旅游调查报告 2016 [http://www.citmhotels.com/chinese.pdf]