Mashangyou Technology Co., Ltd was the first online travel company to go public in China, when it was listed on the pilot national share transfer system for small and medium-sized enterprises, the New Third Board, in August 2015. Chen Yongliang, CEO and chairman of Mashangyou, shares his thoughts on the government’s aim to develop holistic tourism destinationsrather than individual scenic spots in the city or area.
“The concept of integrating the internet with tourism destinations, which everybody in the industry is now doing, was first introduced by us. However, if we just continued with this and stopped thinking about the future, we would lose opportunities. So we came up another innovative idea based on social networking and the sharing economy and decided to build a national tourism maker platform,” said Chen.
“This could be the most revolutionary thing in the shift toward the new model of ‘holistic development of tourism destinations’ proposed by the China National Tourism Administration,” he said.
Chen defines himself as an entrepreneur driven by innovations. In October 2015, he went to the United States to conduct a “field trip” on the sharing economy. He booked apartments through Airbnb and, just like a backpacker, stayed in one place for one or two nights for a couple of weeks. He wanted to understand how the sharing economy concept is being implemented in the United States and tried to find some inspirations on how to operate it back home.
Chen gave an example of Zhangjiajie in Central China’s Hunan province, which was featured in the Hollywood movie Avatar.
“The local government has invested a lot into Zhangjiajie. However, it is hard to get enough returns from the entrance fee,” said Chen. “Let’s do the math. Just say, the cost of receiving one tourist is 500 yuan ($75). The price of the entrance fee for one person is only 200 yuan. Travel agencies need to promote package tours and give further discounts, so the entrance fee can be even lower than 200 yuan. As many tourists from Beijing and Shanghai went to Zhangjiajie just for one day, they only spent money on the entrance ticket, two meals. That’s all.”
The question is: Why don’t the tourists stay longer? Why doesn’t their spending trickle down into local businesses?
Chen said they have done substantial research on how to enable local people to become “makers” and create a unique experience with local features. (The term “maker” was coined to explain the tide of technical innovation in Germany and the US since the 1960s.)
“Becoming a maker doesn’t require too much on our platform. Every local resident can join the group. For tourism destinations such as Zhangjiajie, many local people do not benefit from the business model of relying on just entrance fee. And our maker platform could link the local people’s services with travelers online.”
Chen elaborated this business model further: “Say you have an empty apartment, or you can cook local cuisine, or you have a special entertainment, you are one of our makers. The more makers’ there are, the more choices there are for tourists to enjoy fresh and unique experiences.”
“From the perspective of tourists, they will have better trips. From the perspective of local governments, they can accelerate their progress toward building holistic tourist destinations. And from the perspective of local residents, our platform can help them directly benefit from development of the local tourism industry.”
With this in mind, Chen is trying to incubate a travel maker platform, and Mashangyou has chosen 10 tourism destinations, including Zhangjiajie of Hunan province, Sanya of Hainan province and Dujiangyan of Sichuan province, for a pilot project. At the time of writing, several agreements have been signed, and a group of joint ventures have been established in those destinations to support the operation of the maker platform.
Industry insiders said Mashangyou has done the research and with its “maker” platform, it could develop a new tourism sharing economy by bringing all kinds of travel services online around a single trip. How Mashangyou will roll out this business and establish a new model in the competitive tourism market will depend on how effectively it can run all the operations.
“If it plays the cards very well, Mashangyou is very likely to become the leader of sharing economy in the tourism industry,” said industry insiders.
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