1. China Market Update 2015/2016 TITLE SLIDE OPTION 1 (LIGHT)
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China Market Update
2015/2016

2. 2015 – 2016 Market Conditions
The pace of economic expansion is forecast to trend downward in the coming years. Further appreciation of the Yuan against the CAD in 2015 and 2016 will continue to make Canada a better value destination for Chinese visitors.
2015
2016
Trend
GDP
6.6%
5.9% 
Consumer spend
7.3%
7.0% 
Inflation
1.4%
1.5%
Less expensive to visit Canada versus 2008

3. Canada’s Performance at-a-glance
China emerged as Canada’s 2nd largest overseas inbound market in 2014 (in terms of receipts), representing an estimated 12.1% of Canada’s overseas (excl. US) tourist export receipts.
454,000 Chinese travellers visited Canada in 2014 generating $1 billion in tourist receipts and supporting about 7,200 jobs. 11 out of 13 provinces/territories now invest in China.
2014
2015
Forecast
2016
Arrivals (,000s)
454
530
610
Y/Y %
+ 29%
+ 12% - 20%
+ 15%
Receipts ($M)
$1,016
$1,286
$1,509
Avg. spend per trip
$2,299
$2,425
$2,473
DC budget ($ M)
$4.1
$4.2
$4.6
Partner Revenue
$1.6
$2.5
$2.8

4. Air Service to Canada
Seat capacity to Canada grew 12% in New service includes China Eastern Kunming-Shanghai-Vancouver in Jun 2015, Air China 3 x weekly Beijing-Montreal in Sep 2015.
Potential new services in Capital Airlines 5 x weekly Tianjin-Vancouver and Hainan Airlines 5 x weekly China – Calgary. Possible Xiamen Airlines to Vancouver.
83 flights/week - average loads around 93% plus high yields.
2015 seats (,000s)
Y/Y #
Y/Y %
Total
973
+ 111
+ 13% BC
562
+ 27
+ 5% ON
397
+ 70
+ 21% QC 14
+14
new

5. Air Service to North America
Flight frequency and competition to USA provides air fares 40%-50% below China to Canada
West coast USA 137/week – Vancouver 51/week
Eastern USA 116/week – Eastern Canada 31/week

6. Consumer perceptions
Nearly all Chinese travelers expressed interest in visiting the destinations in Canada’s competitor set. Given that Canada was the last to receive ADS among key competitors, Chinese travelers have strong perceptions of Canada.
Interest in visiting in next two years
Knowledge of holiday opportunities
Considering visit in the next two years

7. Travel Trends
In Tier 1 cities role of traditional travel agents is declining. Consumers are moving towards both online/mobile agents and direct to suppliers (air, hotel, etc.).This linked to influence and impact of social media and enhanced digital services.
Demand for tailor-made tour products, unique experiences, exciting adventure and outdoor activities is growing for high value independent travelers.
In tier 2 and tier 3 cities, group travel demand continues to increase. Wholesalers are expanding distribution networks across secondary and other third-tier cities.

8. Travel Trends
10% -15% Chinese travelers will plan the trip at least 4 months prior, 85% - 90% of them will plan within 3 months of travelling.
Traditional travel agencies, either wholesaler or retail, are making use of third-party portals to promote their products, such as Alitrip.com and Tuniu.com.
Luxury travel experiences including cruise has strong growth potential as does MICE.

9. Key Risks to Achieving Our Forecast
Political instability in the region and potential of domestic unrest.
Continued increase in spending by long haul competitor set – especially USA, Australia and Europe against a declining DC budget.
Exchange rate having negative impact on DC and Partner spend in local currency.
Lack of hotel availability in peak season BC and Alberta.
High Air fares compared to USA and Europe
Likely current air capacity unable to accommodate demand

10. Key Objectives in 2016
Target and convert the fast growing and high value independent traveler including the niche luxury market
Develop the growing group travel market from major tier 2 and tier 3 cities
Incentive travel remains a key focus of our selling efforts in China.

11. Strategies To Support Our Goal
A full content marketing strategy leveraging the change in market dynamics, booking trends and changes in the digital environment
Launch a performance related marketing support program to key accounts
Maximize social media engagement with consumers and trade to influence perception and conversion

12. Consumer Marketing Initiatives
Zhou You Jianada
Our flagship content marketing initiative currently generating over 1.4 million viewers for each video
For 2016 we are moving away from our current format and creating programing that we anticipate will attract a wide audience as we introduce a unique Canada travel experience.
The main distribution channels will remain iQiYi, Tencent Video, Sina.com and Keepexploring.cn supported by extensive social media promotions. iQiYi alone attracts 134 million unique visitors a day.

13. Consumer Marketing Initiatives

14. Consumer Marketing Initiatives
Each video of Zhou You Jianada has strong call to action elements to selected tout operator’s itineraries *same itineraries banners linking with video are available in Zhou You Jianada minisite in Sina.com and Keepexploring.cn

15. Consumer Marketing Initiative
Canada Ski Café – Nan Shan Ski Resort
The Nan Shan Ski Resort partnership will be renewed for winter 2015/2016 with the main elements – Canada Ski Café, OOH on site, the Ski Fashion Show, other trade/media events and direct on site selling opportunities for key agents. Over 400,000 visitor expected

16. Consumer Marketing Initiatives

17. Social Media
Social Media and advances in digital services will form a major supportive role in enhancing and increasing the impact of all our consumer and trade activities in China.
Social Media continues to play a major role in influencing and maintaining awareness of Canada as a prime leisure destination.
DC WeChat account interacts with Travel Agency’s WeChat account to promote Canadian products

18. Social Media

19. Trade Initiatives Performance Related Marketing Support
Increase key accounts to 45
Combining ADP/CIS into one “Destination Canada Preferred Agent” category
Introduce a marketing support funding model paid in arrears with an override element
Tier 1 Cities
Maintain digital based marketing programs with call to action through Zhou You Jianada and other video streaming channels
Tier 2 and Tier 3 Cities
Develop Co-op advertising and promotional activities in line with local business practices. High group potential

20. Trade Initiatives Canada Specialist Program(CSP)
The launch of new Canada Specialist Program(CSP) for agent training. This is unique to China as based on the WeChat Platform and will provide a link to our marketing support program through the generation of consumer leads and eventual conversion.
Alitrip.com
Alitrip is the travel subsidiary of Alibaba, the largest e-commerce company in the world, which supplies a platform to allow tour operators to set up store fronts
Alitrip is supported by Taobao which is the largest B2C e-commerce web site in China
"Alitrip Country Hub" is a dedicated mini site that aggregates products sold on the platform for a particular destination. It provides a great way to market and sell Canada itineraries on the platform.

21. Trade Initiatives

22. Trade Initiatives Trade Events
Series of training roadshows and sales calls
Showcase Canada Asia
RVC 60 agents
No third party trade shows
MICE
Maintain strong business and personal relationships with key organizations and corporate seminars
Key MICE agents invited to RVC and Showcase Asia
Work with PMOs/DMOs to leverage Canada as a preferred incentive destination

23. Partner Opportunities
PMO support for overall consumer campaigns
Feature videos in Zhou You Jianada
Canada Specialist Program(CSP) rewards
PMO/DMO support for trade training and corporate MICE seminars
Co-op advertising and promotions with key accounts and airlines operating on China route
Financial/in-kind support to enhance trade performance related market support initiative
Advertising in Canada Vacation guide, Ski and winter activities and MICE brochures
Discounted itineraries and attractions featured through agents’ stores in Alitrip.com
Provision of interesting content, stories and images to be included in DC corporate WeChat and Weibo

24. 谢谢, Thank you, Merci!