Urban Cultural Tourism Battle in the Summer

BEIJING, August 31 (TiPost) -- The competition has been too fierce in the past two months. Whether you are the most popular scenic spot or a latecomer that is ready to move forward, everyone is brainstorming during this precious month before the Mid-Autumn Festival and National Day holidays, thinking about what to "gamble" on next," said a person in charge of a top 10 scenic spot in Xi"an.

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After the success of the movie "The Longest Day in Chang An", Luoyang started to debate the intellectual property of “Tianjie” in the poem “A Drizzle in Early Spring” . The opening ceremony of the Henan Provincial Sports Games was also held at the Luoyang Ruins of Sui and Tang Dynasty, chanting the slogan of "the ancient capital comes alive." These signs have once again motivated Xi"an, 380 kilometers away, to make efforts in cultural and tourism industry. In its view, the competition, which is characterized by scrambling for customer sources, investing in scenic spots, and promoting consumption, is in full swing both inside and outside the city.

In the past eight months, the cultural and tourism market has been one of the few fields of comprehensive vitality and expected continued prosperity. Coupled with its fast results, sufficient cash flow, and relative security, it has attracted many people who want a slice of the pie.

However, TiPost App has also noticed that in the post-pandemic era, in the background of sudden and insufficient consumer demand and downward economic expectations, the seemingly booming travel industry actually faces heavy pressure and hidden concerns. It has made the traditional industry of cultural and tourism as hot as cutting-edge technology fields such as AI. Meanwhile, it has also rapidly triggered adjustments, differentiation, iteration, and shocks in the industry, leading to a new situation.

The Most Prosperous Summer Travel Market

According to several reports released at the end of August regarding the just-ended summer travel market, the travel data was exceptionally hot, showing a high and steep recovery.

According to the China Tourism Academy"s estimates, the number of domestic tourists in June, July, and August this year reached 1.854 billion, accounting for 28.11% of the total number of domestic tourists throughout the year. Domestic tourism revenue reached 1.2 trillion yuan, accounting for approximately 27.46% of the total domestic tourism revenue for the year.

Among them, July and August saw the most primary and secondary school students. Due to the one-week extension of the holiday, it has become the "longest" summer vacation in history. Under an all-out promotion, it has also become the hottest summer vacation in the tourism market in the past five years. The number of domestic tourists was estimated to be 1.331 billion, accounting for 20.18% of the total number of domestic tourists throughout the year. The domestic tourism revenue is expected to reach 0.86 trillion yuan, accounting for approximately 19.71% of the total domestic tourism revenue throughout the year.

On August 25, Ctrip released the "2023 Summer Travel Market Report", which showed that the domestic tourism market achieved comprehensive growth compared to 2019, and the recovery of outbound tourism was significant. Consumers showed a trend of longer travel distance, increasing travel frequency, and willingness to pay for experiences. Study tours, hotel vacations, sports events, immersive night tours have become hot activities.

According to incomplete statistics, there were more than 100 concerts and music festivals held nationwide from July to August, and the box office of the summer is expected to exceed 20 billion yuan.

In Chengdu, the hosting of the Universiade has significantly boosted the tourism and catering industry. "The summer is the peak season for the catering industry. Chengdu, as a popular tourist city in China, has attracted many domestic and foreign tourists and athletes this summer. In July, the revenue of Shoo Loong Kan Hot Pot"s stores in the Chengdu increased by 9.5%

compared to 2019." said a person in charge of the store.

Although the performance exceeded the expectations of many people, it is not difficult to find the logic behind it after sorting it out.

Since the lifting of pandemic control measures, the pent-up demand for travel has been continuously released. This is most directly demonstrated from the semi-annual reports of 24 listed travel companies: 17 achieved growth in their performance or turned losses into profits and 4 narrowed their losses. Only Macro Link, Yunnan Tourism (002059.SZ), and Xi"an Tourism (000610.SZ) performed poorly.

This trend of recovery has continued to accelerate since the start of the summer, thanks to a series of factors.

In the view of TiPost App, these factors include the positive impact of the top-down policies , especially the "double reduction" policy, the backlog of summer travel demand in the past three years, the release of demand for night tours, study tours, parent-child tours, and long-distance tours, various new tourism products and new formats such as digitalization and immersive projects, the intelligent development of tourist attractions and various Online Travel Agency (OTA) platforms with large amounts of funds and strong online marketing and content marketing.

Finally, all sectors have worked together to create the prosperous 2023 summer tourism market.

Consumption doesnot match the number of tourists

The dazzling cultural and tourism data are all pleasing, but the pressure is hard to hide.

From August 17 to August 20, the 10th West China Cultural Industries Expo, jointly sponsored by the Ministry of Culture and Tourism, the State Administration of Radio and Television, and Shaanxi Province, was held in Xi"an. The "2023 Xi"an Silk Road International Tourism Expo" was also present at the expo.

The four-day event attracted representatives from 27 countries and regions, 21 provincial delegations, 39 delegations of prefecture-level cities and counties, over 700 cultural and tourism enterprises, and more than 9,800 exhibitors, making it a window to observe the changes in the development of the cultural and tourism industry.

TiPost App discovered that from local cultural and tourism bureaus and committees to related businesses in the industry, they all have a common feeling in the face of the hot tourism market recovery—pressure.

"This pressure mainly comes from consumption," said a participant from the cultural and tourism department in Chongqing. "Recently, we have made continuous efforts to participate in or organize several events, which have all been extremely popular. However, the actual consumption does not match the popularity."

An exhibitor from Liaoning brought a product called "cultural wine", but obviously felt that the "high-end" product was "hard to sell". In fact, the price of the wine is only 640 yuan for a box of four bottles, with each bottle costing just over 100 yuan. "Compared with previous years, the sales of this product have dropped by about half, but the other wines priced at a few dozen yuan sell very well." the exhibitor said.

A cultural and creative product development company from Taizhou, Zhejiang province also resonated with this. Their series of products are based on local scenic spots and are innovative designs based on souvenirs from the scenic spots.

"The most obvious fact is the decrease in repurchases." the exhibitor said, "After visiting the scenic spots, tourists often place multiple orders online because people around them like it or they want to give it to friends. In the past, this kind of repurchase would happen 3 to 5 times a year, but this year, although without detailed statistics, we feel that the frequency of repurchases has decreased significantly, which was estimated to be 40%."

According to related reports, there were 150,000 visitors in the exhibition, and the competition for existing consumption has also spread beyond the exhibition, with businesses trying to attract

customers.

Outside the venue, whether it"s the square or the roadside, manufacturers are rushing to find sales opportunities among the crowd leaving the exhibition. The fierce of consumer competition can be seen.

Urban Anxiety Behind the Traffic

It is the stress caused by the slow recovery of consumption that has led to the continuous evolution of the competition among cities for the cultural and tourism market in the past six months.

During the 2023 Spring Festival holiday, Sichuan, a major tourist province of China, ranked first in terms of tourist reception. According to the Sichuan Culture and Tourism Bureau, the third-party big data monitoring showed that during the Spring Festival period, Sichuan received a total of 53.8759 million tourists, with tourism revenue of 24.216 billion yuan, an increase of 24.73% and 10.43% respectively compared to the same period last year and respectively recovering to 89.73% and 84.75% of the Spring Festival in 2019. Both indicators have exceeded the national average growth rate."

However, this data indicating a good start cannot withstand scrutiny. Information released on the official website of the Sichuan Provincial Government shows that during the 2019 Spring Festival holiday, the province achieved a total tourism revenue of 58.042 billion yuan with 82.4729 million tourists.

In comparison, the recovery rate of Sichuan tourism during the 2023 Spring Festival should be 41.7% (tourism revenue) and 65.3% (tourist reception) of 2019, and this recovery rate is still achieved under the circumstances of many promotional activities such as free admission or "buy one get one free", as well as Spring Festival cultural and tourism consumption vouchers issued by multiple cities.

Under the pressure to stimulate consumption, starting from February 8, 2023, the video activity of "Director of Sichuan Culture and Tourism Bureau Talks about Culture and Tourism", which has been running for nearly a year, has been vigorously promoted, and the battle quickly spread throughout the province from Daofu and Garze counties.

"If you do a lot and do it well, the provincial government will have a good impression of you. So they will support you in many ways, not as a mandatory KPI requirement, but as a soft assessment or support. For example, the tourism system holds many evaluations every year, such as the typical Tianfu Tourism County, which may give you preferential treatment or bonus points. It may even count as a local political achievement. Then more research and project will be arranged to support you." analysed by a person from the tourism system in Sichuan.

"Tourism is mainly market-oriented, and the tourism bureau can do little in this regard. However, after the pandemic, when they saw the popularity of short videos, local tourism bureaus also wanted to do something. Since hiring a spokesperson is expensive, the director of the tourism bureau stepped up." said a participant in this type of video production.

This means that the video of "the director of the tourism bureau talking about tourism" is both an initiative and a helpless move. As a result, various places in Sichuan were criticized and gradually faded out because they started adopting "internet celebrity style with glamorous makeup, similar to space exploration and moon landing". However, the awareness of "grabbing people first " has deeply rooted in cities and counties. “

"The battle to attract people in the tourism market is actually a traffic-oriented mindset in the internet era. Only with traffic can you attract more attention and maximize your influence. Without traffic, there will be no money." said Wang Qianma, a commercial geographer and the author of The Urban War: China"s Regional Rise and Fall under the Trio of National Fortunes, Times and the World."The t changes in the pandemic and the competitive situation in the past three years have suppressed the consumption enthusiasm of many people and also hindered the recovery of the real economy. In a sense, for a city, tourism is the means that can quickly recover and guide its consumption. Therefore, behind the competition for attracting people, there is also the survival anxiety of how a city can win in the tough period."

This kind of anxiety is not limited to one province. From the beginning of the year until now, cities and regions across the country have spared no efforts to promote cultural and tourism consumption and attract tourists. After encountering the situation of "easy to attract people but difficult to make them spend money", the competition has intensified. Not only are they competing fiercely in various measures, but they are going all out to grab traffic for their city"s IP.

Directors of Sichuan"s tourism bureau have remained a low profile, while directors and mayors from other cities, led by Zibo, have rushed to the front lines of the competition. From Zibo"s barbecue, Guizhou Village NBA to Shijiazhuang"s rock concerts, music festivals and other events have become the super landscape of this year"s "urban tourism war".

"It is not only a competition for consumers and their purchasing power, but also a competition for people"s attention and for the potential future consumer market. For example, after Zibo became popular, it may be easier for the city to go virul again in the future." Deng Shujiang, a cultural tourism planning expert and vice general manager of Kuansitang Urban Planning and Design, analyzed, "In fact, cities are now not only grabbing for consumers physically, but also competing for online and offline markets through the Internet"s spread effect."

Platforms make the competition fiercer among cities

"Snatching traffic is the first step for cultural tourism, but more importantly, it is how to retain that traffic. For many cultural tourism projects, it is not enough to attract people through various means of promotion. Just like improving the repurchase rate of a product, the most important thing is to improve the replay rate." Wang said.

But facing the booming travel recovery at the beginning of this year, there is some embarrassment for almost all scenic spots and travel companies: after three years of pandemic, the cultural tourism industry has run out of fund, even the cultural tourism real estate struggles to make a profit.

"We can"t do anything we want to do, so we can only find strategic investors to cooperate with us. As a result, we found that only online travel agencies in the market have the ability and willingness to cooperate with us." the person in charge of the top 10 scenic spots in Xi"an said.

According to the person, the first standard for selecting cooperative scenic spots by platforms is to look at the city. It needs to have a strong cultural tourism brand, sufficient traffic, and of course, a good market. Next, to try to seize well-known scenic spots within the city. If the scenic spots have fame, traffic, and legendary stories to tell, there will be someone to help solve problems such as lack of funds and inability to produce products.

"They (OTA platforms) provide money, technology, and traffic, and we (scenic spots) provide effort, resources, and management. We know our own brand, and they know that Xi"an has a good market. As long as the brand is strong, if we lack attractive products, we will cooperate with them (online travel platforms) to quickly establish market presence, and then divide internally." The person in charge said, "After signing the cooperation agreement, the platform will initially make a prepayment for ticket sales as a whole, and it can also be a gamble. For example, you give me 20 million yuan first, and then I provide you this market. You sell tickets, and then we cooperate together, and how much will you return to me if we achieve a second income of 20 million, etc."

According to his introduction, before the outbreak of the pandemic in 2018 and 2019, platforms such as Meituan and Ctrip had already started to get involved in the cooperation with scenic spots, but at that time, the latter either had sufficient funds or were supported by real estate,

and their main partners were still traditional travel agencies and tourism companies. Cooperation with online travel platforms are specific projects at most.

This year, the situation has been completely overturned, with strategic cooperation featuring advance payment and exclusive sales, and sought by large platforms becoming popular throughout the city.

OTA platforms capable of financing scenic spots have joined hands with video platforms such as Tiktok and Kuaishou, quickly becoming a more direct market force after local governments in various cities, promoting the rise in popularity of post-epidemic travel this year.

The cooperation model between platforms and scenic spots this year is similar to that between film studios and producers, intensifying the competition for influence among cities and also causing an unprecedented competition within cities.

Take Xi"an as an example, with the advantages of being the "6th hottest tourist destination and the 3rd busiest airport nationwide (according to Ctrip"s 2023 summer travel market report)", compared to the competition pressure between cities, the battle between various scenic spots within the city is actually more intense.

"For example, this year Meituan was in charge of the popular city wall scenic spot, but Ctrip knew that Xi"an definitely has a customer base, so it went to compete for the less popular Daming Palace. If it still can"t secure it, it will continue to move down the popularity." said the aforementioned person.

"For example, if a platform is able to charge a second or third line scenic spot, it has to keep hold activities and create related topics. As a result, this year, even the less popular spots, such as the Xi"an Incident Memorial Hall, the Memorial Hall of the Eighth Route Army Office, the Xi"an Museum, and even the West Film Studio, etc. are among the must-go list, and also hard to buy a ticket, which actually cause great pressure on other scenic spots and the competition within cities is getting more and more roll."

Same popularity, different income

The competition within the city not only manifests in marketing competition but ultimately in income. The top 10 scenic spots or tourist projects in Xi"an are well-known, but their income vary greatly.

For example, during the summer, the daily average passenger flow of Datang Everbright City reached 300,000, and the spot even had to install gates on the zebra crossing. However, according to the financial report released by Qujiang Cultural Tourism on the evening of August 17th, the net profit of Datang Everbright City Company in the first half of the year was only 247,100 yuan.

Although such street blocks are not the main profit sources, with their main function being the externalization effect of cultural value and brand benefits, it is still disappointing compared with the estimated income of nearly tens of millions of yuan per day for the Terracotta Warriors in the summer (the Terracotta Warriors sell 65,000 tickets per day, priced at 150 yuan per ticket, totaling 9.75 million yuan).

A more typical case of income disparity is the Songcheng Performance Development. In June 2020, the Xi"an Eternal Loveproject was completed and opened. It is located in the Chanba Expo Garden, with a total area of about 100 acres. Compared with the mature projects in Sanya and Lijiang, both of which have only two theaters, the project has as many as six theaters, providing hardware foundation for replicating the performance kingdom model.

However, in the face of the competition from local live-action dramas such as The Everlasting

Regret, Camel Bell Legend, "the Resurrected Army", and "the Xi"an Incident, although Xi"an Eternal Love has a large number of visitors, its income has been unsatisfactory.

During the 2020 Mid-Autumn Festival and National Day Golden Week, Xi"an Eternal Love received 57,000 visitors and earned 3.2197 million yuan in revenue. This is just over half of the revenue of Camel Bell Legend, which received 73,000 visitors and earned 6.14 million yuan. Compared with The Everlasting Regret that received 50,800 visitors and earned 13.8074 million yuan , it is only a small fraction.

Afterwards, Songcheng Performance Development focused on revamping Xi"an Eternal Love. It was reopened in March this year and specifically pointed out in the semi-annual report: "Xi"an Eternal Love ranked first on the attraction collection list for 20 days after opening, and ranked first on the hot-selling list. During the May 1st holiday, it performed as many as 8 shows in a single day, becoming a popular destination for visiting Xi"an."

However, in terms of revenue, Xi"an Eternal Love is less than 21 million yuan. Compared with The Everlasting Regret under Shaanxi Tourism Culture Industry Co., Ltd., which achieved a revenue of over 280 million yuan and a net profit of 190 million yuan in the first half of this year, it is still far behind.

After the enthusiasm, concerns arise

Not only is there tremendous pressure to stimulate consumption on the demand side, but the supply-side problems brought by overwhelming popularity are also quickly emerging.

"The popularity in the tourism industry this summer has exposed the differences and mismatches between supply and demand. Simply put, the supply is insufficient. For example, all the museums are overcrowded now, and the tourist experience is particularly bad," said a person in charge of a top 10 scenic spot in Xi"an.

"The craziness in tourism, as evidenced by the difficulty of getting tickets and the daily queues, is not normal. A normal industry logic should be that people come every day, but not overcrowded. People come here to enjoy and relax, not to squeeze in public transport," said Deng Shujiang, a tourism planning expert and deputy general manager of Kuansitang Urban Planning and Design. "Many tourism products based on culture are now simplistic and crude, and homogenization is serious such as the identical big statue on the cultural plaza, coffee shops and hotels everywhere... The supply in the tourism market still lags behind the needs of tourists." According to data, the most popular attractions in the tourism market are still the traditional scenic spots. "Traditional scenic spots rely on natural resources. They mainly focus on sightseeing and have little to do with products and services," Deng said. "The cultural and tourism industry needs to have a comprehensive and systematic industry upgrade."

As summer draws to a close and preparations for the Mid-Autumn Festival and National Day begin, concerns about the supply side are becoming more evident.

"This year"s tourism boom is the concentrated release after being suppressed by the pandemic for three years.Facing the crowd influx of tourists, it is clear in the industry that there are problems with the experience of traditional tourism products," said the person in charge of the aforementioned top 10 scenic spot in Xi"an. "In other words, if these problems unsolved, once the demand declines, we may face a cold snap. So, we are already thinking about what to do next and we must come up with new products."

"Competition of urban cultural tourism is fierce and requires more innovation. In many cases, the market only recognizes the first player, making it difficult for others to succeed by learning and copying their predecessors. Therefore, innovation is needed, and it should not be limited to low-level competition but should be combined with the consideration of the entire economy and the renewal of urban cultural tourism." Zhou Mingqi, the founder of the industrial economic consulting firm T-Identifier Think Tank, believes that "the essence of the cultural tourism battle is to create the charm of the city. The urban cultural tourism industry is a comprehensive industry that needs to be related to other industries. The so-called relationship is the integration of cultural tourism and business. Only by integrating cultural tourism and business can we not only attract tourists to buy tickets, but also convert the flow of visitors into consumption power." (This article was first published on the TiPost App, author | Liu Min, Su Qitao)

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