China Travel Service taps into the Chinese tourism market at home

More than 400,000 visitors from China came to NZ before the pandemic. Photo / Grant Bradley

China Travel Service boss Lisa Li watched as business went from bad to worse at the beginning of the year.

Just as the company was about to begin its busiest time of the year, Chinese New Year, Wuhan and other cities in China started to lock down as the threat of the coronavirus became clear.

''I was able to tell my staff about the outbreak coming but we had experienced SARS and the GFC but have bounced back stronger. We thought if we worked harder and smarter we could do that again, unfortunately, that night we got the information that China had closed off outbound travel,'' she said.

The 20-year-old firm usually handled more than 30,000 tourists from China a year; by the end of January business dropped off by 75 per cent. New Zealand's ban on visitors from mainland China in early February meant a further 10 per cent fall.

This meant a quick switch to prioritise the big Chinese population in Australia and Li planned a roadshow to drum up interest in this country for the Easter school holidays.
But when the borders were closed in March international business dried up completely.

''All the doors closed, one by one,'' she said.

During the alert level 4 lockdown from late March the Auckland-based China Travel Service (CTS) didn't go into full hibernation.

''We used our existing customer base to try to sell non-travel products because e-commerce made it possible.''

It sold honey, milk powder and skin care products to former travel clients.

''We chose the products carefully - we tried to make sure they were all natural,'' she said.

The products were sent with detailed information about where they came from.

''That was the message we wanted to pass on to China - when the borders open they can come and see those places.''

While useful to keep New Zealand at the front of mind for CTS clients in China, it wasn't a big earner.

''We're not making a lot of money from it but it is a learning exercise about e-commerce. After the pandemic e-commerce will continue to be really strong and secondly the New Zealand premium products really add value to our tourism as well,'' Li said.

The average Chinese resident wanted to go on domestic trips between two and three times a year and spending up to three times higher because they were less likely to be staying with friends and families.

''They have no accommodation and they have to pay for everything.''

More were on self-drive holidays and becoming more intrepid, doing more walks and travelling to remote areas such as the Chatham Islands or staying in high-end lodges.

Li has recently been to the Chathams with what is thought to be the first Chinese group tour party. She said her small group was happy to pay a voluntary visitor levy of $25, eat like locals (and not bring food back to the mainland ) and immerse themselves in local history and culture.

''We enjoyed the freshest seafood, rugged landscape, crystal clear water but the highlight was the culture and the people.''

She said that spending time with guide Vaughan Hill, a shark attack survivor, was inspirational.''

China Travel Service boss Lisa Li with Chatham Islands tour guide Vaughan Hill. Photo / Supplied

The isolation made us forget problems. especially the pandemic raging around the world.''

China Travel Service grew quickly after New Zealand became the second country after Australia to get Approved Destination Status for Chinese travellers.

Li said despite building a growing domestic-focused business her firm had furloughed about two thirds of its staff.

It now has 14 full-time employees and 24 subcontractors.

''I feel that personally, we tried everything we could. In the beginning we were optimistic.''

The firm has been paid $420,000 in wage subsidies which she said was great for the affected staff and she was optimistic the firm could rebuild.

The success of the country's health response to the virus was crucial to building confidence to travel domestically and was noticed by future visitors from China who were acutely aware of safety in destination countries, she said.

Last year the number of visitors from China dipped 9 per cent to 407,000, this country's second biggest market behind Australia, pre-Covid.

Li said the market would take time to rebuild when the pandemic eases and when it did numbers would be lower but spend per person would continue on the previous upward growth as more free and independent travellers come here.

New minister at summit

New Minister of Tourism Stuart Nash will get a first hand look at the state of the Covid-smashed sector at a summit this week where an industry group is looking for his response to a road map it has set out.

Nash has replaced Kelvin Davis in the portfolio. Other portfolios Nash has - Economic and Regional Development and Small Business - fit well with his new responsibilities in tourism which vied with dairy as the country's biggest export earner, before the pandemic.

Since the start of the year, thousands of jobs have been lost and it has led to the failure of many businesses - especially those solely reliant on international visitors.

Domestic recovery has proved to be stronger than some forecast - due largely to part of the $9 billion spent by Kiwis on overseas holidays being spent in this country.

But demand is lumpy throughout the week and during non-school holiday periods. Davis got himself offside with some small tourist businesses when big operators were among the first recipients of millions of dollars of urgent funding.

Tourism Industry Aotearoa is hosting a summit in Wellington from tomorrow and before the election urged the new government in its first 100 days to take action in five areas; outlining what the plan is to reopen borders, provide bridging finance for viable businesses, set up a tourism innovation fund, improve core data and to encourage travel outside school holidays provide a $200 travel card for every New Zealander.