While three flight hours south in Macau, the Pacific Asia Travel Association hosted its annual PATA Travel Mart, over 500 delegates gathered in Beijing on September 15-16 at the so far largest China Travel Distribution Summit.

This key event for travel executives looking to understand how to distribute and market online to Chinese consumers, focused on the theme of "China, Consumer, Content".

For global companies, China is no longer the future. It is the present. China's market share in the global tourism world is rapidly growing, and with over 420 million Internet users, China has the most online users in the world.

The key outcomes from this year's China Travel Distribution Summit which are important for domestic and international travel organizations to keep in mind when looking to understand and take advantage of the lucrative China tourism market include:

1. It is critical to have a well balanced execution between direct and non-direct channels, as well as online and offline mediums. Convergence is more important in China than anywhere else, however online is growing and is the most important information source for Chinese consumers.

2. Social media in China is complex and vastly different than outside of China.  China has its own social media sites, and blocked sites, such as Youtube, Facebook, Twitter, and Foursquare are becoming more and more irrelevant. Any company looking to be successful in China needs to have a local social media strategy.

Social media channels will also become important platforms for booking and transactions in the future, not just for information gathering. Most of the big online travel agencies in China, namely Ctrip and eLong, and media sites such as Qunar and Daoao have social media functionalities built in.

3. Service is a key component for success in China, as most transactions are still offline, and various bottlenecks still exist, such as obtaining visas for outbound travel and payment systems. Being able to service Chinese customers is critical.

4. Mobile will continue to grow, and will be the future for travel planning and distribution. The official and successful entry of the iPad into China is another catalyst that will drive this consumer behaviour which travel organizations have to adapt for. Having a Chinese content strategy that leverages various platforms and channels, including mobile will be the cornerstone to reach Chinese consumers.

5. Search is important in China, with or without Google. Baidu's market share will push Baidu to innovate and learn from search engines like Google.  However, China still has different rules when it comes to search. The traveler-centric future is more personalized results that combine mobile and social media with search.

Ram Badrinathan (right), general manager-Asia Pacific for PhoCusWright kicked off the summit by comparing China with India, and came to the conclusion that while China is leading India with physical infrastructure, it comes short in soft infrastructure, namely travel innovation which he attributed to the shortcomings of the GDS landscape in China. While China may need different models and systems, according to Larry Liang, general manager of airline solutions of TravelSky, China's leading GDS, certain functions that create efficiencies are still performed manually and offline. Only Chinese companies can better understand its consumers, no other international GDS will be able to handle the volume and scale.

When it comes to online distribution, eLong and Ctrip  are still the leading players, with Ctrip having the majority of the market share. eLong's CEO Cui Guanfu (left) wants eLong to be part of the mix for hotels to improve revenues. According to him, the hotel's direct channels should be in harmony with the OTA's as they are complimentary to each other. Demand generation could come from portal websites, search, or even social networks.

Ctrip's CEO Fan Min (right) on the other hand focused his comments mainly on the importance of customer service.  Ctrip has always understood the shortcomings and the complexity of the Chinese market, and developed its model around it.  Since 80% of the business of the OTA is transacted offline, call center operations and customer service obviously become a major part of being successful. While Ctrip may entertain expanding into other markets, it seemed clear that China is the core market for Ctrip, and that Fan Min sees still growth opportunities for the company.

This year's summit also attracted more and more international travel organizations, represented with most senior executives from Sabre, Travelport, Priceline, Amadeus, and Tripit, as well as a few international hotel companies and airlines. China is definitely a market that is becoming more and more attractive for international travel brands, however reaching and connecting with Chinese consumers remains a complex and painful undertaking.

As anywhere in the world, social media is becoming a very powerful tool to engage with potential customers. China is seen as the most engaged country online with 92% of online users actively participating in social media.  However the common sites such as Facebook, Twitter, Youtube, as well as Foursquare, are all blocked.

The social media landscape in China has its own sites, as well as its own rules of engagement. Knowing which channels to use, how to set them up, and how to engage users is still complex for domestic Chinese companies, and extremely difficult for internationally organizations. George Cao (left), Co-founder of digital marketing and social media agency Dragon Trail ( www.dragontrail.com ) presented a case study of Canadian tourist board Banff Lake Louise Tourism.  In a social media contest that Dragon Trail helped Banff Lake Louise Tourism launch in China, Banff's new Chinese web site attracted nearly 200,000 visits and close to 100,000 registrations in a six-week period, without any advertising spend.

Mr. Cao also showed the invite tree of the contest participants, and it demonstrated that the campaign had a viral spread of over 90%, meaning that 90% of registered people were invited by somebody that was already registered. The invite tree allows Dragon Trail now to identify the most influential people for its client, and interact with them in future campaigns or initiatives.

The conclusion of the China Travel Distribution Summit, as elegantly summarized by Charlie Li, head of summit organizer TravelDaily.cn, is that China welcomes foreign companies to be part of the growth of the China travel industry with all its opportunities. 

China is everyone's biggest dream, yet it could be everyone's worst nightmare if one is not prepared. Foreign companies need to be savvy in leveraging the digital landscape as well as align themselves with strong local partners that understand the Chinese culture and travel landscape, and that can act as a bridge by also understanding the western way of doing things, to avoid misunderstandings and disappointments.

China is in a socio-economic transformation, and travel and tourism is major catalyst to drive that change.

By Jens Thraenhart, Publisher & Chief Editor of www.ChinaTravelTrends.com (CTT is an information website and community jointly published by Dragon Trail and the China Outbound Tourism Research Institute - COTRI) – September 18, 2010