China airlines, Tongcheng-eLong and Fosun Tourism and Culture
China Southern Airlines, Asia’s largest airline operator in terms of passenger volume and fleet size, announced on November 15 that it would exit the SkyTeam airline alliance effective January 1, 2019.
China Eastern plans to invest RMB 3.154 billion (USD 450 million) in Juneyao Airlines and will hold 8.6% shares of Juneyao after selling more than 5% of its shares to the latter in the deal. With the alliance, the two airlines will dominate nearly half of the aviation market share in Shanghai, as China Eastern currently claims 40% market share and Juneyao as the third-largest carrier in the area takes about 8% of the market.
Beijing tourism authorities have given the green light for wholly foreign-owned travel agencies to operate outbound tours once they meet certain requirements, paving way for them to dip into China's huge overseas tourism market. Wholly foreign-owned travel agencies were allowed to set up in China since 2003 but they could not offer outbound travel products.
Tencent partnered with Shangri-La Group to focus on developing and deploying Smart Hotel solutions to transform hotel operations and services. Shangri-La will utilize its worldwide hotel network and business resources to support Tencent in promoting its cutting-edge technology to the world.
Tencent's WeChat, China's biggest social messaging app, has partnered with InterContinental to open a new smart hotel in Shanghai. Users can use Wechat for authentication, verification, dining booking or check-out in the hotel.
Chinese travel firm Tongcheng-eLong, backed by Tencent and Ctrip, launched a smaller-than-expected initial public offering that raised up to USD 233 million in Hong Kong. The company starts trading on November 26, and plans to use the proceeds of the IPO to enhance products and service offerings as well as to fund potential acquisitions and investments.
Holiday resort brand Club Med’s owner Fosun Tourism and Culture has been approved to list separately from its parent Fosun International on the Hong Kong stock exchange. The company plans to use around a fifth of the listing proceeds to further develop its resort business, cultural events, performing arts, live entertainment business and digital technology infrastructure, and another 25% for acquisitions and strategic alliances that could expand its “global ecosystem”.
Growing prospects for the China market
China is set to overtake France as the most popular tourist destination by 2030, according to research firm Euromonitor International. The Asia Pacific region is seeing sustained boom in travel and tourism and is expected to have 10% more trips this year. Travel analysts said sporting events would likely further boost tourism in the region, as Tokyo will host the 2020 Summer Olympic Games and Beijing the 2022 winter event.
China’s Sharing Economy Research Center with the State Information Center has issued a set of service specifications for China's shared accommodation industry, the first of its kind in the world’s second-biggest economy. Four leading enterprises in the sector – Xiaozhu, Airbnb, Tujia.com and Zhenguo.com – have signed a contract committed to adhering to the specifications.
China expects the number of new hotel openings to hit 461 projects providing 71,788 rooms in the second half this year and 634 projects with 107,373 rooms by the end of 2018. As well, 548 new hotel openings are expected in 2019 and 540 in 2020. Shanghai and Guangzhou will see the highest number of new hotels, with 121 projects providing 24,759 rooms and 108 projects providing 26,022 rooms respectively in the pipeline.
By 2035, the number of general aircraft in China is anticipated to reach 20,000, fueled by rapid growth in short-distance transportation, low-altitude airspace tourism and business trips. The general aviation market in China is estimated to be worth more than USD 153 billion by 2020, with 5,000 general aircraft in the country.
Startup funding
Tours and activities platform KKday announced a new round of financing backed by LINE Ventures and Alibaba fund to accelerate its efforts in leveraging innovative technologies for travel booking and experiences, and further its global expansion into new markets. KKday revealed there would be more global collaboration with LINE in the offing. It has launched an in-app service, LINE Travel, for searching and booking flights, hotels, tours and activities, as well as planning and sharing itineraries.
MyTaiwanTour, an online tour operator that provides customized tour packages for American and European tourists in Taiwan, has secured NT$45 (USD 1.5) million capital from Sanpu Travel, an inbound tour operator and travel agency. The money will be used to expand business to China and Japan, as well as to enhance its technical strengths and deepen its tourism content.
Short-term rental platform 58fanshome announced that it had raised RMB 5 million (USD 717,800) in an angel funding round. By referencing the Airbnb model, the company tested the feasibility of its C2B rental business with directly-managed stores in Shanghai, Hangzhou and other cities. It aims to follow up with an A-round financing in early 2019 to boost its value to RMB 200 million.
