How Do Chinese Travel Platforms Deal with the COVID-19 Outbreak?
On February 18, Chinese travel service provider Trip.com Group renewed its special cancellation policy for all the travel products on the platform, extending the free cancellation policy for group tours worldwide from the end of February to the end of March.
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The COVID-19 outbreak was followed by a mass cancellation of trips, and online travel agencies (OTA) suffered heavy losses. According to Trip.com, due to the complexity of refund policies for different overseas flights and hotels, their frontline service personnel have been under unbearable pressure.
Since the beginning of February, many countries and regions have implemented entry control measures to mitgate the spread of the virus on a global scale. Based on the latest information from the National Migration Administration, a total of 127 countries have implemented different levels of entry control measures. Most of them require measuring temperature and 14 days of quarantine after entry, while some do not allow those with coronavirus symptoms to enter. Russia, for instance, has temporarily stopped issuing work and travel visas to Chinese citizens.
“However, it can be found that most countries haven’t actually adopted the most severe restrictions on Chinese tourists. Just like what the World Health Organization says about not encouraging travel and trade restrictions on China, governments in many countries have made rational choices facing the outbreak. Even if they did restrict entry, they only restricted entry to those who have traveled to Hubei before, rather than closing doors to China as a whole,” said a Trip.com spokesperson.
Trip.com’s “comrade plan”
Tourism is an intricate business that involves a complicated supply chain. During this disastrous period of time for small and medium-sized business owners, Trip.com, China’s largest OTA, is in a constant mode of devising contingency plans for the industry. Back in the early days of the outbreak, the company rallied up emergency work groups to ensure information sharing between its product, tech and logistics departments, and efficient refund policies for users and suppliers.
“The ‘comrade plan’ we launch for our aviation, hotel and vacation resort partners includes 10 specific measures. We invest 1 billion yuan into a partner support fund and provide 10 billion loans for small and micro businesses,” noted the representative of Trip.com.
Trip.com launched a “guarantee for canceled orders” initiative that was joined by 400,000 hotels around the globe as of January 31. In addition, Trip.com has also provided 6-12 months commission deductions for certain hotels. For group tour suppliers, the platform exempts the advertising fees charged before the Spring Festival and transaction commissions for orders made during the Spring Festival. Three months of platform system usage fee is also returned to suppliers. The company will also bear the costs of non-refundable air tickets, hotels, visas, car rentals.
Trip.com also exempts three months of management fees for its 8,000 offline stores nationwide to alleviate the operating pressure. In terms of financial support, the platform has worked with a number of banks to provide its partners with loans of at least 10 billion yuan in total, with vendors in Hubei province being prioritized.
At present, the domestic tourism industry has been greatly affected, with the largest losses mainly concentrated around major outbreak zones in Hubei Province. However, it is expected that the domestic travel industry will recover faster than the outbound one as local trips are less reliant on group tours, they are cheaper and require less time from people to prepare for them.
The “2019 China Outbound Tourism Consumption Report” jointly released by Trip.com and China UnionPay’s subsidiary UnionPay International indicates that China’s outbound tourism consumption in 2019 may continue to rank first in the world.
According to Trip.com, due to the outbreak, most affected neighboring countries in terms of tourism are Japan and Thailand. However the overseas tourism market as a whole isn’t as heavily affected. Foreign tourists who had originally planned to travel to China have now turned their attention to China’s neighbors.
Disaster relief fund
Trip.com has for a while followed the routine of allocating funds for major disasters. “The tourism industry is constantly affected by emergencies. We have experienced SARS, the Japanese earthquake, eruption of Bali’s Mount Agung (an active volcano), and Thailand ’s tropical storms. Trip.com has set up call centers around the world, with a total of nearly 14,000 multilingual customer service providers. We provide 24 hours of emergency call services for our users,” commented the company.
In 2005, the company officially initiated a disaster relief fund. It was set up specifically to deal with three types of situations that cause substantial damage to consumers’ travel experiences, including unpredictable natural disasters (orange or red warning issued by government agencies), political turmoil and public health events. Once one of the three occurs, the company will activate the fund to bear the loss for consumers.
In the past fifteen years, the fund has swollen from the initial 1 million yuan to 200 million yuan now.
At the moment, the whole industry has embarked on a “post-disaster reconstruction”. On February 20, Trip.com announced the latest “timeline of opening up famous scenic spots” and a “list of scenic spots opening for free for medical staff nationwide”. At the same time, Trip.com has established a specific webpage to summarize and update relevant information, posting favorable traveling policies for medical staff in a timely manner.
In the coming months, Trip.com will maintain close communications with various tourist destinations and partners to restore quality services for tourists.
“After the SARS outbreak in 2003, the tourism market ushered in a warm spring, with a large number of tourists going back to traveling. The number of travel orders rebounded rapidly. 17 years later, with more advanced medical treatment conditions and a more accessible ordering system, people’s willingness to go back to traveling after the outbreak is even stronger,” said the spokesperson, “We have good reasons to believe that as soon as the outbreak ends, the tourism industry will return to its upward trajectory with resilient growth.”