Skift Take

Hundreds of millions of people in motion during a holiday period should mean big bucks for the travel industry. But in China, technology and tradition are holding it back.

Editor’s Note: Skift  launched a new series, Gateway, as we broaden our news coverage geographically with first-hand, original stories from correspondents embedded in cities around the world.

We’ve started with regular reports several times per week from Beijing, Singapore,  Caracas and Cape Town. Look for us to add other cities, as well. Gateway Beijing and Gateway Singapore, for example, signify that the reporters are writing from those cities although their coverage of the business of travel will meander to other locales in their regions. Read about the series here, and check out all the stories in the series here.

The Christmas holiday period in the United States in 2016 saw about 100 million people in motion, setting a record. But half a world away in China, transportation officials chuckle at the quaint idea of a mere 100 million trips during a holiday period.

While certain events, such as Thanksgiving or Christmas in the United States, or the annual Hajj pilgrimage to Mecca, seem like massive movements of people, it is the annual Chunyun, the Spring Festival travel period, as Chinese New Year is known locally, that represents the world’s largest annual migration. The annual 40-day period strains the nation’s transport system while creating the occasional opportunity for travel industry operators.

In 2015, Chinese took some 3.6 billion trips and spent $100 billion on shopping and dining during the 40-day period, The Guardian reported.

Spring Festival, or Chinese New Year, as Westerners know it, is celebrated based on a lunar calendar, and can appear as early as January 22 or as late as February 16. Officially, the entire nation is given a seven-day public holiday to celebrate. White collar workers may augment that time with annual leave; manual laborers, especially migrant workers for whom Spring Festival represents a rare opportunity to reunite with family, generally take more time, with building sites in big cities shutting earlier and re-opening later.

Travel Operators Aren’t Taking Advantage

Amidst all this movement it should offer great opportunities for the travel industry, and yet, hoteliers and other professionals don’t view Chinese New Year with the same glee as the October 1 week-long national holiday.

With transportation systems such as airlines and rail lines operate at full tilt, the traditional nature of the holiday and its focus on both family and home present two challenges. Many service industry staff are reluctant to work then, given both their desire to participate in China’s most important cultural holiday, and family pressure certainly increases that unwillingness. At the same time, business owners must offer double pay to those willing to work, inducing many to operate with skeleton crews.

That’s just on the business side. Tradition dictates that families stay together, shunning hotels and instead taking up available sofas and even doubling up on beds, although younger, urban Chinese, especially those who have lived abroad, may politely decline the homestay option.

Hotel Restaurants Welcome the Holiday

Increasingly, the big winner during Chinese New Year is restaurants, including outlets attached to five-star hotels and major international chains, where dining will be seen as prestigious or at least expensive. Eating is the national pastime in China even during non-holiday periods, and except for rural areas where restaurants are uncommon, even the most enthusiastic home chef will likely welcome a break after three or four days of almost constant cooking.

“Shanghai Disneyland has been surprisingly good during Chinese New Year so far,” said restaurateur Alan Wong, whose 10 restaurants include an outlet of his Hatsune Japanese restaurant chain in Shanghai’s Disney park. “Chinese New Year is a blessing and a curse, as [regular] customers leave, staff leave, but people that stay get peace and quiet in a normally bustling city.”

“For big city hotels, it is a quiet season. Only low-rated tour businesses are available. For the conservative, it is probably more financially prudent to run a skeleton crew and let the rest of the staff have a good holiday,” says Christopher Chia, vice president and general manager of Shangri-La’s China World Hotels in Beijing.

However, Chia clearly doesn’t place himself in the conservative ranks. “But for the go-getter, let’s pack the hotel with tours or family package deals. Also, restaurants should also be able to be filled with guests especially for reunion dinners. It is sad to have a cold and empty hotel on such occasions. The holiday spirit is more important than a lesser profit margin than usual,” he said.

Staff the restaurant or hotel?

“We’re going to lose half our staff no matter what.” said Joel Shuchat, owner of The Orchid Hotel, a boutique lodging and restaurant in Beijing. “I essentially have to choose which one [the hotel or the restaurant] to keep staffed.”

Even in normal times China’s skies remain overcrowded, and the increased passenger ranks during this holiday season result in delays on many routes after the first few flights of each day.

Another factor is bonuses and monetary gifts, which are often used to fund Chinese New Year expenses, including personal travel. Most employers who offer bonuses to staff do so right before Chinese New Year, providing many with a cash boost. Also, while the Christmas-style giving of physical gifts has become more common in recent years, the traditional present remains a hongbao — a decorative red envelope with money in it. Gift cards and gift certificates are almost unknown in China so travel providers have not been able to tap into any potential there largely because of distrust of many retailers.

Technology is increasingly playing a role with the most popular mode of transportation – China’s superb and expanding high-speed rail network. While formerly passengers wishing to take the train had to stand in line no more than a week before their departure to buy a one-way ticket to a destination, now the system is computerized, and available 60 days in advance. However, some feel that technology has now gone too far.

New “ticket-snatching” software allows some consumers to bypass the traditional queues, including China Railway Corp.’s rickety official website, and also rail tickets offered by large travel sites including Ctrip and Qihoo360.

Seen as a means of ticket scalping, even some of the travel sites appear to use it to help their customers gain advantage and increase buyer loyalty. Although sites may only charge a RMB 5 service fee (about $0.73) per ticket, given the volume of travel during the period, it still adds up to big bucks. Given the demand for tickets and its desire to keep the Spring Festival period orderly, the government has declared such apps to be illegal.


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Tags: china, dining, gateway, hotels

Photo credit: Because of staff shortages during Chinese New Year, the owner of the boutique Orchid Hotel in Beijing says he has to choose between staffing the hotel or the restaurant. Pictured is a dining area on September 16, 2014. The Orchid Hotel

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