China National Travel Service Group Corporation Annual Report

Background Information

China National Travel Service Group Corporation (CNTSG) was established in 2003. It is headquartered in Beijing and is the largest international tourism corporation in the country. As of 2019, CNTSG has become the largest government-owned travel provider in the world, with Global Tourism 500-company-ranking coming in at 30th place, according to China National Tourism Administration. Its main business includes travel services, international trained manpower, tourism training, and overseas training. The company is divided into various sub-divisions, such as China National Tour operator Corporation and China Travel Management Company Limited.

Relevant Data

According to the company’s 2019 annual report, the Group’s total operating revenue of the year reached 57.81 billion yuan, a year-on-year increase of 16.59%. Its net profit attributable to shareholders was 4.068 billion yuan, a year-on-year increase of 0.5%. International tourism business maintained rapid growth, reaching 10.09 billion yuan, a year-on-year increase of 22.3%. The international tourism satisfaction rate was up to 97.6%, which showed its rising market influence. Domestic tourism revenue was down by 6.99% year-on-year, with large fluctuations in the tourism market. The total number of passengers served was 73.83 million in 2019, a year-on-year growth of 6.2%.

Experts Perspectives

According to industry experts, the key to success of CNTSG lies in its strengths when dealing with cross-border tourism and technology development. The company adopted a decentralized structure which allowed cross-border operations and resource sharing to take place more efficiently and quickly. In 2020, the company announced its plans to develop its technology further with regards to the ‘Smart-tourism’ platform by 2020. Furthermore, CNTSG constantly looks for ways to improve the overseas training segment, which involves training employees of other travel companies in order to provide more beneficial services to its customers.

Insights and Analysis

CNTSG’s initiatives have paid off. Its international tourism revenue was the highest in recent years, mainly due to its cross-border collaboration. The company has also made significant strides in developing its technology, going from a traditional brick-and-mortar platform to a ‘Smart-tourism’ platform. This should help the company in boosting the satisfaction rate for its customers. In addition, the company has made strides in the training segment by investing in overseas training activities for travel companies.

Effects of COVID-19

The COVID-19 pandemic has had a significant impact on the international tourism industry, and the company was hit hard by the pandemic. In Q1 2020, its total operating revenue decreased by 72.1% year-on-year. To counteract the rapid fall in revenues, CNTSG implemented a series of policies for modernization and digitization. For instance, the company launched the ‘Travel Credit Card’ in late 2019 to encourage its customers to purchase online. The company is also focusing on developing ‘Smart-tourism Platform’, in which clients can complete complex transactions online.

Redrawn Strategies

In order to counter the financial losses caused by the pandemic, CNTSG has adopted several strategies. Firstly, the company sought to maintain and grow their online presence in order to generate revenue from other sources. Secondly, CNTSG stepped up their efforts to develop the ‘Smart-tourism Platform’ for travelers to purchase a range of services online, such as flights, hotels, and more. Additionally, the company intended to focus more on developing traditional travel agencies to explore and expand the market.

Risks and Opportunities

Although CNTSG’s strategy of developing traditional travel agencies is beneficial, the company may face risks associated with the traditional travel business. It is difficult for CNTSG to predict and adjust its current strategies and profitability in the volatile travel market. Additionally, the cost associated with developing the ‘Smart-tourism Platform’ is quite high, and the returns may not be able to compensate for the costs. On the other hand, the online presence of the company may open up new opportunities for the company to reach out to new customers beyond the traditional pool. By building its brand awareness, CNTSG can look to tap into other markets, and this could bring in additional revenues for the company.

Recovery Strategies

In order to recover from the financial losses caused by the pandemic, CNTSG has adopted a string of strategies. These include cost-cutting measures, improving the customer experience, increasing marketing efforts, and developing new products and services. The company has launched new marketing campaigns to keep its customers engaged, such as ‘CNTSG+ virtual reality’ and ‘Travel Credit Card’. In addition, CNTSG has invested heavily in developing new products and services such as visualization technology, personalized services, and augmented reality services. Furthermore, the company has looked for ways to reduce costs whilst maintaining its efficiency. It has implemented a slim program to reduce deadweight operations and waste management projects.

Innovative Programs

In an effort to stay ahead of the competition, CNTSG has implemented a number of innovative programs. Firstly, the company introduced the ‘China Travel Sustainable Development Index’ to be used by the industry to rate different travel companies on their sustainability. This index is to be used by the government to evaluate the performance of the travel industry. Secondly, the company is developing the ‘Smart-tourism Platform’ in order to provide customers with more personalized services and real-time recommendations. Additionally, the company has started training programs to develop the skillsets of its staff, this includes advancing its online marketing skills and customer service capacity. Finally, the company has established an online platform to serve as a platform for communication between travel professionals.

Focus on Quality

CNTSG has placed a strong emphasis on increasing the quality of its services for its customers. The company has employed a number of measures including setting up quality management systems, using customer feedback, and introducing new technologies. It has invested in customer service optimization and has made sure that there is an established system to provide quick and effective customer service. Additionally, the company has implemented a technology-based assessment system in order to evaluate the quality of services provided. Finally, it has relied on customer feedback in order to identify areas of improvement for its services and to develop better travel experiences for its customers.

John Melendez

John J. Melendez is a journalist, author, and commentator specializing in Chinese culture, politics, and international relations. He is a frequent guest on radio and television programs, and is the author of several books on Chinese culture and politics. He currently resides in Beijing, China.

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