The British government announced last week that it will be allocating £ 8million marketing campaign fund aimed at increasing Chinese tourist arrivals from current 150,000 to 500,000 p.a. by year 2015. The ambitious target is attainable given the strong Chinese outbound travel growth rate and the strong destination awareness of United Kingdom, especially London. But, it’ll take a very high commitment and synergy to attain the targeted numbers in 3 years’ time.
Firstly, there’s an urgent need to reduce the impact of existing major barriers, such as the stringent visa requirement and Air Passenger Duty (APD). These major barriers impede tourism growth and significantly reduce the airlines’ interest to develop direct air services. Stringent visa requirements makes it very challenging for airlines to stimulate market demand through commercial incentives or ad hoc discounts to trigger impulsive buying, as passengers won’t be enticed into buying air tickets due to the fear of unable to attain visa. The current Air Passenger Duty (APD) system makes it less favourable for long haul airlines to compete commercially due to the high tax rates for long haul services.
Improving air services accessibility will significantly boost the Chinese tourist arrivals into United Kingdom. A two-step approach is recommended for boosting direct air services between United Kingdom and China. Firstly, there should be more direct air services from UK to the secondary gateways in China. The secondary cities offer huge source market for outbound tourism. Currently, the direct air services between UK and China primarily focused on London and the three main hubs in China, namely Beijing, Shanghai and the recently introduced Guangzhou – London Heathrow direct services. Leveraging on the strong London destination brand awareness in Mainland China, more direct services between London, Manchester and the secondary gateways in China should be established. Currently, there are many intercontinental direct air services between Europe and secondary Chinese cities, such as Chengdu, Chongqing, Hangzhou, Xiamen, Wuhan, Nanjing, Qingdao and Shenyang. There should be strong business cases to review the opportunity of a direct service to London as well.
As VisitBritain enhanced the destination awareness of secondary UK cities in the Chinese consumer market, there will also be opportunities to tap into the fast growing Chinese carriers in serving the main secondary UK city, Manchester. Currently, all Chinese carriers only serve a single destination in UK, i.e. London. As the main London airports are facing slots constraints, there’s an opportunity to woo the Chinese carriers into serving multiple destinations within the UK, similar to their operations in countries such as Australia, Italy, Germany etc.
While route development initiatives to develop direct air services may take a longer period to yield result, we should not ignore the contribution of air accessibility through 6thfreedom traffic travelling via other global airport hubs in the interim period. There are a few hub airports that serve very well as a gateway to secondary cities in China, such as Hong Kong, Dubai, Amsterdam and Frankfurt. These global hub airports offer direct services to many secondary markets in China, and hence offer a one-stop air service to UK.
Direct air services require a critical mass in passenger traffic to ensure sustainability over the long term, and tourism stakeholders can develop the critical mass in passenger traffic between the city pairs initially through the one-stop routing. There could be an alternative approach to develop these direct services through scheduled charters, initially during the peak seasons, to mitigate the high risks of new routes borne by the airlines.
Source: Airport Strategy & Marketing
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