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China Tourism Tuesday Episode 7
18 Plays5 months ago
In today's episode, we talk to Joe Zou, Commercial Director for Asia at HX Hurtigruten Expedition. Joe talks to us about changes in the China outbound tourism market, the cruise industry, and how consumer preferences continue to evolve.
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Transcript
Introduction of Guest and Topic
00:00:02
Speaker
Good day everybody, welcome to China Tourism Tuesday. Today we've got a really special guest, Hengda Zhou. For the English speakers, it goes by the name of Zhou Zhou. He works in the cruise industry and we'd really like to hear his thoughts today.
00:00:19
Speaker
um So, Zhou, if you could please just give a quick introduction of yourself and then, yeah, it'd be great to get your insights. Of course. Thanks for having me guys. My name is, you can call me Joe, it's fine.
00:00:32
Speaker
um I work for HX, which is a shop for Who Did It and Expeditions. um i my my My title is the Commercial Director for Asia.
00:00:44
Speaker
So I look after Guayana, South East Asia, Japan and Korea in general. um Yeah, so... Basically, we for us, china has played sorry the Asia plays a critical role for our global business, especially in the expedition cruising space.
00:01:06
Speaker
ah For recent years, we do actually aware there's an increasing demand on people traveling to the world's most pristine destination.
Post-COVID Changes in Chinese Cruise Market
00:01:16
Speaker
like Antarctica and Antarctica. So I'm very happy to be here and I'd love to discuss further with you guys about you know all these topics on today Great, thank you Joe. So, I mean, ah you're obviously working a little bit more in the the luxury sector, I'm assuming, of the Chinese outbound industry.
00:01:36
Speaker
But just generally speaking, I mean, naturally things have changed since COVID quite a bit. People are trying to catch up and figure out what is precisely happening in the Chinese outbound market. ah What is your view of the the current Chinese outbound markets in general and also maybe even a little bit from the luxury perspective?
00:01:55
Speaker
Yeah, for us, we obviously during COVID, that was kind of like a not very good time for everybody for all the cruise companies and also the land tools as well obviously but from time to time since we recovered from COVID, we did actually notice a significant change and also the increase, ah we call it recovery from that market, especially speaking of China. um We've seen this growing demand for the you know expedition cruising.
00:02:30
Speaker
um For us, as as we talk about the expedition cruising obviously you can use two wos two two words to describe it when this obviously is a luxuryerary and the other one is more like a premium and also i think it's more like about the experience itself because that takes people to you know the places that are really really remote.
00:02:51
Speaker
It's not like the and ordinary you know day-to-day land tours and stuff so people that get to traveling on the cruises to the place that really you know just not regularly regular.
00:03:04
Speaker
So deal for these places obviously that could be andar car where they can enjoy the wildlife there and also see the icebergs, you know, floating just right in front of you or to the Arctic, you know, trying to reach up 80 degree, getting to the space age, know, stuff like that.
00:03:22
Speaker
So yeah, I mean, to us, we have seen a recovery. So for us, since we're back to that market since 2023, then for the
00:03:34
Speaker
and then for the three years we did we didn't notice there is a 20% increase of the passenger numbers year over year. which is great Great.
Demographic Shifts and Travel Trends
00:03:48
Speaker
Joe, I want to quickly ask you, you know, a common theme when you speak to anybody in China nowadays is we kind of reminisce about, you know, 10 years ago, 15 years ago about how good the market was.
00:03:59
Speaker
Now, I want to get an idea from you um how your profile of guests, where they're going, what kind of experiences um are they doing? Can you kind of give us a ah ah brief overview what what it is that Chinese outbound tourists in in your market segment are looking for and how has that changed over the past 10-15 years?
00:04:20
Speaker
Yep, of course. For us, the user portrait, if we're talking about that, you will see the a it's more like about forty forty four forty two sixty five right with a growing interest from also from the younger travelers as well whose age is around 30 to 40 so i think that has made a bit of change um before the pre-covid which is my oh even might be like 10 years ago it was different because 10 years ago uh this special market is actually you know for expedition cruising uh it is more like for our wealthy
00:05:00
Speaker
elderly right those all people
00:05:04
Speaker
65 but now from time to time you can really notice the younger generations to be traveling on these ships will be maybe occupies about 20% you know off the total passengers And region-wise, Beijing, Shanghai still leads in the outbound travel.
00:05:25
Speaker
That was really, that was pretty much the same compared with 10 years ago. However, you see the passenger numbers from from from the from of South China, like in Guangzhou or Shenzhen, has actually dropped significantly, right? I guess the reason more is the these major cities obviously we're all talking about here one cds here So we don't talk about the other tier two or tiers, but you'll find Beijing and Shanghai still very, very strong. But Guangzhou, Sinchenji, as I mentioned, it has dropped a bit. I think there's quite a few reasons behind that, when there's obviously the people there are more conservative about and know spending um money to travel to these places.
00:06:12
Speaker
And the other is the, the in general, the economic situation at this stage, especially for the middle class, has some sort of impact by good.
00:06:23
Speaker
So that might be the reason why.
00:06:29
Speaker
That's interesting, Joe. um And ah to in your experience, looking at, for example, Hong Kong, Taiwan, the greater China markets, how's that performing relative to, say, I mean, in my imagination, I always assume that, you know, Shanghai and eastern China kind of leads and Beijing is like a little bubble of of sort of high spending power in northern China.
00:06:50
Speaker
But can you give me that picture of the greater China as well? Yeah, of course. Well, it's funny you should say that because recently we've been actually looking to Taiwan very closely um as we have seen a very strong potential from there.
00:07:05
Speaker
um When I first travelled to Taipei post-COVID, that was back in 2022 in November. So at the time, already can sort of sense that the the yeah what what people talking him about to like travelling to Antarctica or Greenland and places like that has actually increased quite a lot.
00:07:26
Speaker
I'll give you a very good ex example. as i one One day I was in a restaurant with my partner. Then a group of people right behind us, they are doctors from one of the major hospitals in in Taiwan, they are actually talking about traveling to Greenland and they did mention our company names a few times as we wound up their choices and stuff, right?
00:07:51
Speaker
So i was like I was quite surprised because I mean when I was in China, I mean people talk about Greenland or Antarctica which is um quite usual as this market is developed for the past five or six years especially in this expedition cruise industry.
00:08:08
Speaker
But for Taiwan, it was really surprised me that people have such interest of traveling there. So obviously we have seen there's a lot of travelers coming out from tai one as well for the recent years to talk about there's a few food charters from some of our industry, let's say, phantomies in the markets.
00:08:29
Speaker
um And also you have seen Taiwanese expedition team onboard our ships as well as to servicing the Taiwanese passengers or the Chinese-speaking passengers way better.
00:08:42
Speaker
So Taiwan is really, really growing. And right now you can see the mainstream expedition cruise brands in there as well. not Obviously not just us, but he had a you know ship so this providers also established their presence in Taiwan.
00:09:01
Speaker
So that's very amazing to see that. In Hong Kong, the situation might be a slightly different because Taiwan mainland China are quite similar. People are prefer to group travels. That means they are more preferred to traveling as a group due to many reasons.
00:09:19
Speaker
Language, convenience, these kinds of things, right? But in Hong Kong, you'll find that it is a slightly different. The mentality over there that could be a little bit more focusing on the FIT, free independent travel, than group travels.
00:09:36
Speaker
And it is not, it is quite usual. You'll see a group of china a group of so people from Hong Kong, even talk to Westerners, but you can hardly see that from the other Greater China Markets.
00:09:53
Speaker
So I guess that's the reason why, um you know that these two markets like mainland China and Taiwan and Hong Kong are slightly different.
Popular Destinations and Educational Travel
00:10:05
Speaker
Makes sense. Yeah. yeah wow that's really Interesting, especially about the sitting at the bar thing. I also experienced a little bit of that recently. um I've been asking two more questions to just related what you've been saying now. The first one is, out of all the products that you offer, what is the most popular, ah you would say, out of all of them ah for the Chinese market?
00:10:31
Speaker
and And then secondly, out of out of the younger folks that are coming in their 50s and 40s, are there any ah ah Chinese ah families coming out, bringing their children or is ah is that a no-no or what?
00:10:45
Speaker
So with the first question, the most popular destinations in the expedition cruise perspective, I would say it's Antarctica and Greenland.
00:10:59
Speaker
the Greenland especially in the recent years has become quite popular. We had our ship MS Mord aka the old Midnight Soul but obviously right now it is going to Norway now but before there was with our expedition fleet.
00:11:15
Speaker
So what happened is back in 2023
00:11:19
Speaker
Besides our numbers from Antarctica with Greenland, and we welcomed more than 560 passengers on board and two sailings traveling to Iceland, Yamaayan, Slobodan and Sond and Itoktotomi, which is a very small Greenlandic town, right?
00:11:42
Speaker
so in that particular saving i think that really started this trend in the market as encouraging Chinese, or let's say Greater China travelers to put their eyes and put their attentions on traveling to the Arctic.
00:11:59
Speaker
But obviously before that, it's more like we're doing the, let's say just maybe second-limigating, or second-limigating Iceland back in the time. and in it backing the pain And Natshah was an all-time star for this particular market.
00:12:17
Speaker
and
00:12:21
Speaker
and awareness has been built, ah this nation awareness this area as well. So lot of people, they they they they think Antarctica is their funnel, their bucket list, is on their bucket list. So they wanted to travel there, obviously, just to see, to feel and to experience.
00:12:39
Speaker
So it was being all time a big favorite. um so when we're moving back to Greenland and Arctic, I guess one thing, even now, with from the, I think it's from the government level, that the there's a lot of dialogues are talking about, are we going to encourage more like-minded travelers traveling to these places, which they are also focusing on the sustainability,
00:13:11
Speaker
thinking of the of the of their mind, of not, you know, just to go to place, but not leave anything behind. so this is, um to me, it is two most popular destinations.
00:13:25
Speaker
Then when we talk about younger families, they are traveling with kids. Yes, we do see ah lot of young families young adventurers we call them, being on our ships as well. The most recent sailing, we did actually post the article on WeChat as well, is a um ah little girl named Amber. She's just six, but she was one of maybe the youngest kids traveling on the ship.
00:13:52
Speaker
So for those younger ones, obviously with the parents, they are really wanting the kids to get a bit of experience of, know, traveling to places like that and also to be more involved into the science programs on board.
00:14:08
Speaker
so we us because we have a huge science center on the yeah on middle bank of the ship and we do have a microscope just like that so when the little ones join the trip obviously can join they can be lectured and they can also experience themselves by you know looking to the microscopes to find out what is you know what is in there in the water that we with what example that we collected from the ocean in antarctica and arctics so it's a lot of learning a lot of you know good experience for the younger ones
00:14:42
Speaker
so yes to answer your second question yes we do see an increasing number of young families uh to traveling with the kids on board but um with our policy obviously the kids traveling to Antarctica must be over five and yeah so that might that might sort of like a limited little bit of uh young kids whono five years old as
00:15:09
Speaker
You know, that's really interesting. I mean, like i mean with there's we've seen, obviously, in the Chinese outbound market, a huge kind of like explosion of ah ah young professionals, let's put it that way, like university graduates from China, whatever, who are traveling overseas to do some kind of certification.
00:15:31
Speaker
just to get like an extra certificate or something to put onto their resume, whether it be like diving, instructing or whether it be nature conservation. And while I was at ITB Berlin last week, I was speaking to a ah south africa I mean, I'm South African big company and they work with conservation.
00:15:55
Speaker
And and what what really blew my mind was that the guy i mentioned they get actually a lot of families that they come out with, they because I mean, with the one child policy before in China, they've got their one child, that they they put all their attention and efforts into their child.
00:16:12
Speaker
And they actually come out for anything from like one to two weeks, learn everything about the bush, learn everything about the animals, learn as much as humanly possible. and And of course, the kids just love it, and absolutely love it.
00:16:26
Speaker
So when you were talking about like the science station on your ships and the how the children can learn more from these things. Yeah, that must be well a great, pro not only great privilege, but super attractive to people that can do that. Of course.
00:16:41
Speaker
and again up please also comment on that is we do recentlyably also we have signed a a project with a University of Tasmania UTAS so what we will do especially in that we want to enhance our science focus for our travelers traveling to the these places yeah so this UTAS project is is kind of like a pre-travel module so that will give either the kids and their families or the travelers a course to learn before they travel into intaria
00:17:15
Speaker
and by the end of it they will receive a proper certificate kit from U-PASS to prove that they have passed the course. So I think, as and then we are looking at the second stage of converting that into Chinese and German language, ah which the first step is obviously starting from
00:17:37
Speaker
are the options. So think with that, it will definitely increase the interest from the market when they're traveling there. And all of the pre-learning really enable them to learn more when they get on board. So for example, they learn the basics for Antarctica, for example.
00:17:54
Speaker
But when they get on board, when they actually
00:18:00
Speaker
collect the world samples and stuff like that. And that will really enhance all the learnings they previously did from the pre-travel module. So it this is another you know program or project that we are running for the future savings.
00:18:15
Speaker
yeah that's That's fantastic. I mean, that that's super exciting. I must say that's something I would love to get my kids onto, to be quite honest. I mean, um and so and i'll finally, ah what I wanted to, for us to talk about a little bit
Sustainability Initiatives in Cruising
00:18:31
Speaker
more is... ah
00:18:35
Speaker
it a few weeks ago and you touched on it very briefly. So I saw on your social media posts that in Shanghai you had met with a sustainability organization.
00:18:48
Speaker
So i we chatted you and I asked you like, well, how does that exactly work coming from the cruise industry? Don't you badger a bit for co2 emissions and uh being bad for the environment and and then your your reply to me was was very interesting and that's what i want to touch on um and and then i also saw your colleague um at itb actually doing a whole panel about sustainability because uh again so uh currently i'm sitting here in amsterdam i absolutely have
00:19:23
Speaker
know people where you mentioned the word cruise industry it's like a swear word um and ah they they will kind of say a lot of negative things ah about it ah so I'd love to hear what is your perspective on this and what is your company's perspective about this and ah yeah let's please try and like cut out the noise and and hear what's really going on in this industry?
00:19:52
Speaker
ah good Of course, of course. um Yeah, it just just like you said, I mean, I do 100% agree. Like, you know, when we talk about cruise industries, people keep thinking of big white ships, thinking of the heavy oil they use, thinking of the yeah pollutions they have left behind.
00:20:09
Speaker
for us, we are a very we have a very different site on that the different what's called a practice as well so for us we have done many things to ensure traveling to these pristine destinations responsibly so when talk about the stimulities we stopped using the ah heavy oil back in 2028 and then we installed the the the electronics recharging system for the ships and we did, we we we did have the ah what's called the ah uurittan the foundation back in days
00:20:52
Speaker
in the eyes obviously sort of the business unit split we have ah two foundation one there's for who do written there one there's for the yeah hajacks which is the expedition co bit that was back in 2015. So obviously through that foundation, if you are on our ship on the HX, if you didn't want your batches to be changed, you can hang a grain green sign on your door, we call it a gold green sign.
00:21:22
Speaker
So then for us, we will contribute 0.5 euro into our foundation and with a foundation that can be, you know supporting back to the community and also just so to to also supporting on the sustainable focus the project as well.
00:21:41
Speaker
I can give you a little bit more details on that. And then in 2018, our fleet stopped using plastic, our ships.
00:21:53
Speaker
So right now if you're on the you on the any of our ships, you will not see the yeah plastic bottle you will not see plastic cuterase and stuff like that instead we're using all recycled all the yeah all or or the actual you know um the actual stuff and then the the better plastic ones.
00:22:14
Speaker
Back in 2019 we have our first ah hybrid ship is called the Royal Amazon and for the year after 2022 the sister ship Fridge of Nansen is also known we the first cruise company that using the hybrid power which is the using the LMP and we call the marine bio biofilm and also with the electricity as well so that will greatly cut the c o two and ano
00:22:45
Speaker
by twenty five percent of CO2 and NOx about 85%. With our sister company, Hoodwritten, we have started the C0 program back in 2022 and looking at to promote, ah to to to build the world's first ah zero emissions ship by 2030. And that is actually worked with 13 Norwegian um organizations. for that project So yeah, so I mean for all the efforts that we invest into this, in 2023 Morningstar Sestinalik has actually put us in the ESG number one cruise company in the industry and also we, for from our expedition team,
00:23:38
Speaker
two leaders to the morgan the karen stra Tuda was the chair for the yeah committee for Ayrto and Karen is the current chair for the committee for Ayrto.
00:23:49
Speaker
So for us, it's not just only for us to follow all the rules, but we also encourage the other cruise companies also following all the Ayrto and Ayrto rules when they are in there.
00:24:03
Speaker
So I guess for us, we have really
00:24:11
Speaker
our funds into this sustainability focus. Sorry Joe, just one more question from my side. um yeah i just want to ask, you know if you had to compare you know the ah Western markets compared to the sort of Greater China market around sustainability messaging and branding, um how would you sort of compare and contrast the two markets? What is the power of sustainability from like a branding perspective?
00:24:38
Speaker
Yeah, I think for China, sustainability and ESG has now become more and more talked about and more and more focused. So you'll see there's many new media that we've never really seen in the past has actually grown during the COVID or past the COVID.
00:24:57
Speaker
So we have a smaller like independent media that are keep like actively promoting this but you focus and i think for the china's big picture is obvious to reduce emissions in the in all the source of resources.
00:25:17
Speaker
So that will also become you know the goal that for the for the China government and the travellers will be focusing on. So recently I say after the COVID, because I travelled obviously back to China post-COVID,
00:25:31
Speaker
i really see this awareness has increased comparing with pre-COVID has actually reached a degree that it's really growing. Obviously for the Western world, CISNVC is always the the biggest focus, in but in the Greater China, this is not at that kind of level as yet, but it should reach there very, very soon.
00:25:56
Speaker
That's from my point of view. Yeah, 100%.
Future of Carbon-Neutral Cruise Projects
00:26:00
Speaker
And then for for the ship that that your company will be launching in the near future that aims to be carbon neutral, carbon zero, how are they going to achieve that if you don't mind me asking?
00:26:17
Speaker
Of course, uses solar power and also the wind power as well so you think of a solar power. It is a very kind of interesting concept. but as you know When you talk about Norway, when you talk about Slobots, there's a midnight sun during the summertime.
00:26:37
Speaker
So that means that should give us enough energy when we talk about solar power and also with the battery to you know get recharged and get a ship going in these places. Yeah, really interesting. like I mean, i'm right now I'm looking at a pie chart of the sources of greenhouse gases ah globally, and it's actually from Bill Gates's new book.
00:27:01
Speaker
And ah in it you can see, so so that the the smallest contribution to greenhouse gases as a category is ah heating and cooling, which is 7%. ah the The second smallest contribution is ah transportation, yeah which 16%. Then agriculture is And then the generation of electricity is and manufacturing is the biggest at thirty one percent but wherere
00:27:32
Speaker
effectively speaking in the transportation industry so so to speak, you absolutely are. So out of the transportation segment of 16%, the biggest contributor is passenger cars at 7% of total greenhouse emissions. Then 5% of total is buses and
00:27:52
Speaker
18 wheeler trucks i'm assuming um air air travel is two percent of total and ships are two percent of total but out of ships i mean obviously that's um assuming again the vast majority are transport ah ships for cargo um so even if one was to look at this pie chart i would imagine that the cruise industry even the worst the most guilty of the guilty would be contributing to like zero point something.
00:28:27
Speaker
um I'm just saying this to like to put it into perspective because I do find people bash the the tourism industry quite easily and quite quickly, especially about cruise ships and about flying on airplanes or on holiday, um but tend to ignore the other 96% of sources of greenhouse emissions.
00:28:55
Speaker
la Yeah, so I just find that quite interesting from perspective. I mean, but naturally, nevertheless, your company is still taking this very seriously and still wants to get to zero emissions, which which i yeah I think people should be talking about that a lot more. 100%.
00:29:14
Speaker
hundred percent
00:29:17
Speaker
and And also that I mentioned, even with Future of Nets and Roald Armisen, we recycle the heating from the engine as well, then use that into our infinity pools, to our hot tops in the public area, and also in the gas cabins for the shower using hot waters.
00:29:38
Speaker
It's all coming from the engine recycled heat. Great. yeah Well, cool.
Conclusion and Thanks
00:29:43
Speaker
um Joe, thank you so much for being on our show and thank you so much for sharing your insights. I mean, as always, I've learned a heck of a lot myself from this and I really appreciate your your frank perspectives on everything.
00:30:00
Speaker
And yeah, all I can say is ah thank you very much. Thank you very much for having me. I mean, we'll always love to share the yeah things about sustainability as it is our company focus. So thank you for having me there.
00:30:27
Speaker
We look forward to hearing from you.