Mainland travel agency turns to Japan, Taiwan as Hong Kong market withers
Updated: 2015-12-01 08:05
By Chai Hua in Shenzhen(HK Edition)
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Travelers queue up at check-in counters at Shanghai's Hongqiao airport. With a shift in the shopping destinations of mainland visitors, mainland travel agencies are expanding their business to Japan, Taiwan and other regions in Asia. Qilai Shen / Bloomberg |
Joy Tour Group (JTG) - one of the earliest mainland travel agencies engaged in Hong Kong and Macao tourism - has begun expanding its operations to Japan, Taiwan, South Korea and Southeast Asia as the Hong Kong tourism market dwindles.
Shenzhen Tempus Global Business Service Holdings Ltd, a sub-company of Tempus Group, said last week it had acquired a 55-percent stake in JTG for 880 million yuan ($137.6 million). Backed by a healthy capital injection, the Shenzhen-based agency is stepping up its expansion into other Asian travel markets.
JTG has cast its sights on Japan, South Korea and Thailand, covering the overseas travel market within a five-hour flight from the Chinese mainland, and aiming to open up 1,000 stores on the mainland in three years.
The company will spend 120 million yuan on establishing overseas destination services and another 200 million yuan on domestic travel projects.
Founded in 1997, JTG has emerged as the biggest mainland company specializing in organizing package tours to Hong Kong. Last year, the agency handled an average of 100 tour groups, or 2,000 people, daily, accounting for more than one quarter of all mainland tour groups to the SAR.
JTG's revenue from its Hong Kong and Macao tourism business accounts for more than 85 percent of its total income, according to a report by Guosen Securities Co Ltd.
But, the continued decline in the number of mainland travelers to Hong Kong has taken its toll on JTG's operations.
The company's revenue plunged to 1.4 billion yuan in the first eight months of this year, compared with 2.2 billion yuan last year and 1 billion yuan in 2013.
JTG has already started preparations to grab a bigger slice of the Thailand and Taiwan tour markets.
Guosen Securities analyst Zeng Guang said JTG's developed network for the Hong Kong and Macao markets has laid a solid foundation for the company to take its model to other markets in Asia.
JTG adopts a strategy of developing a complete business chain, including travel agency, destination transportation, hotels, duty-free stores and restaurants.
Zhou Xiaofeng, vice-president of Tempus Global, said they go for companies like JTG that control key resources rather than those with a single business model to attract customers.
JTG will also boost cooperation with Tempus Group in online travel platforms, as the latter runs a cross-border e-commerce platform and a string of offline stores on the mainland.
Shenzhen Tempus Global Travel Holding resumed trading on the Shenzhen Stock Exchange last Friday. Its share price surged 9.99 percent to close at 20.36 yuan on Monday.
grace@chinadailyhk.com
(HK Edition 12/01/2015 page8)