In the West, online travel has long since eclipsed the brick-and-mortar industry, but in China, real-world travel agencies are very much alive. Travel patterns are also very different here; Chinese tourists often prefer to travel in groups as part of meticulously crafted travel packages, not just hop a flight to a vacation destination and figure the rest out later. That means operating a travel site in China presents some unique challenges, and recently, we got an opportunity to talk via email with Donald Yu, the CEO of Tuniu, about some of them.
Tuniu’s development has been surprisingly rapid. How was this accomplished? Can you tell us a little about the founding and development of Tuniu?
We started Tuniu as a community tourism website in October of 2006 and sped its pace of development as an online travel package and group tour booking around six months later. Our vision was to make tourism simple for the still-nascent Chinese travel market. To make this goal a reality, we targeted customer service and experience as our key differentiators from other market players.
Back then, there were three major trends in China’s online tourism industry: do it yourself tours and outdoor activities; air tickets and hotel booking; and tourism package products with cooperation from tourism agencies. Tuniu targeted the third category because we felt it was an underexploited market with great potential.
In order to ensure that customers had a wide range of choices for the types of travel packages and group tours that they really wanted, we built out a business operation supporting system, which we call “BOSS,” built upon sophisticated technology. We use this system to identify trends in the market quickly and leverage our trained travel experts to tailor tours that Chinese consumers will appreciate.
We were fortunate that we got into the Chinese travel market just as it was beginning to take off. The last five to six years have seen remarkable growth in the Chinese tourism industry, and we’ve been excellently positioned to capitalize on that trend.
In the West, traditional brick-and-mortar travel agencies have been almost completely eliminated by online travel sites, but China’s market is different. Do you think online travel sites in China will be able to eliminate traditional brick-and-mortar establishments?
From its start, Tuniu has been focused on leveraging our excellent technology to meet trends and needs in the market in a way that traditional travel companies cannot. Our goal has always been making tourism simple for our customers, which we believe will ensure our leading position in the market.
I don’t think that traditional travel agencies are leaving the market anytime soon, but I also don’t think that they are incompatible with online travel companies. Many traditional travel agencies have expanded into the online realm. However, fundamentally, we provide a different offering than they do. We can arrange one stop travel solutions that are easy to book. And our BOSS system lets us give travelers the kind of package travel and group tour options that they want without requiring them to spend months planning.
So what is so different about Tuniu, as compared to traditional travel agencies or other online services (like Qunar)?
We are focused on tourism solutions and are dedicated to providing a broad range of travel options, while continuing to improve service quality. Our focus on packaged tourism means we don’t sell separate air tickets or hotel bookings. Simply put we don’t focus on travel, but rather tourism. We provide our customers with full package solutions. Everything needs to be simple and intuitive.
Our BOSS system also allows us to track the progress and satisfaction of our customers very well in the pre-sale and post-trip timeframe, as well as during travel. If there is a problem, we’ll know almost immediately.
BOSS further provides us database analysis, which gives us insights into the ever changing tourism market and enables us to react quickly and effectively. We understand what Chinese customers are buying and adjust our offerings quickly to meet the demands. As a result, our products are richer than peers who are less focused on staying ahead of Chinese tourism trends.
E-commerce in China has had trouble dealing with customer complaints, and travel is an industry in which the customer demands are high because normal service can be disrupted by all kinds of things (for example, weather delaying flights or regional instability making travel to a particular place suddenly unwise). How does Tuniu deal with this problem, and how are you handling customer service as your site and the number of trips offered continues to grow?
Since its founding, Tuniu has continuously worked to improve customer experience and control risks. We have dedicated teams dedicated to working on these issues, and we continue to build them out as the volume of our business increases.
In the beginning, we relied on customer surveys to get a sense of how well we were performing, but have made significant upgrades in our sophistication since then. Initially, we worked to set up an after-sale team to handle complaints, refund inquires and help retrieve lost items.
Later, when our business grew further, we set up a dedicated in-sales team to respond and follow up on customer inquiries as quickly as possible. We appreciate that when there’s a problem during travel, you want the situation resolved immediately. That’s why we’ve invested in putting local quality supervisors on the ground in some of the most popular Chinese tourist destinations like Xiamen and Sanya. We want to make sure that if our customers have a problem there’s someone on the ground who knows the market and can help resolve the situation immediately.
At present you only operate and send tours from within China; are there any plans to expand your market and begin operations elsewhere (for example, Southeast Asia)?
We are highly focused on the Chinese market and we believe that we are only just beginning to reach our full potential audience. The exciting part about China is that travel is still relatively new for so many people. We believe that we have a key role and responsibility in broadening what Chinese travelers do and what experiences they are able to enjoy. So far, we have over 20 departing cities for tourism products, which positions us at the forefront of the market.
If I’m a person who wants to travel, why should I choose Tuniu?
Tuniu is the best option for our target customers: those looking for simple solutions to great tour experiences. This means we cater to the needs of all types of customers, including those who have limited travel experience – a rapidly growing demographic among Chinese travellers. For each of these kinds of trips our team works to develop the richest possible travel experience.
For the group tour and package travel segment of the market, we are confident that we are leaders in the breadth and depth of our offering. Our teams of experts design packages to meet all sectors of the Chinese—from outdoor domestic adventures in areas like Yunnan, to trips to Europe, Japan and Korean. Each of the packages that we offer is carefully tailored to offer a different experience so that our customers have a wide range of off-the-shelf options. And even with all of the time and energy we put into getting these packages to meet our customers’ varied needs, we are still extremely competitive in our pricing.
The entire customer experience, from purchasing to after sales is designed to be easy, and customers can count on us to be there and help out when problem occurs. Based on the positive feedback and repeat customers we have from among the more than one million travel experiences we’ve serviced, we believe that we are succeeding in creating simple but rich tour solutions.
What are the biggest problems facing Tuniu right now? What challenges will you face in the future?
Companies that experience the kind of explosive growth we’ve seen inevitably have a learning curve, and we’re no different. What I’m most proud of is that throughout the company we’ve shown a commitment to continuously investing our resources in technology and our people with the consistent goal of making tourism simple. Tuniu has made tremendous improvements over the last several years, but I think our strength is that we always keep the big picture focus on the customer, and will continue to invest in product development and internal team management.
Moving forward, we will continue to focus on providing tourism solutions, increasing efficiency while improving quality of service.