Face-to-Face: David Fraser
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Travel Daily chats with the David Fraser, Flight Centre Group’s managing director for Greater China…
Q) While some people are predicting the death of bricks and mortar travel agencies, Flight Centre is opening new outlets in Greater China. What are the trends driving this strategy?
The Flight Centre brand is the fastest growing part of Flight Centre Travel Group’s (FCGT’s) business in Greater China, and the brand’s retail shop expansion has played a key part in this growth. The main factors contributing to the success of our retail shops include the following:
a) Hong Kong is a traditional market where people are generally time poor and have high service expectations. They appreciate personalised service where the travel consultant can capably manage all of their itinerary and booking needs for them.
b) Flight Centre’s key point of difference is its people – they are well-travelled and include both native English speaking expatriates and bilingual Hong Kong Chinese staff. This allows us to understand and develop a good rapport with both native and expat customers.
c) Our retail shops give customers a choice in how they interact and book with us – either in-store, or via phone or email. Within the next year we will also be making our full range of products and services available online.
d) The other factor in Hong Kong is that there is no domestic travel. In other markets, domestic flight bookings have been the first travel services to move online.
Q) What proportion of your business in Hong Kong and Shanghai is the expat market, and are you seeing any shift towards local Chinese travelers?
In Shanghai and China our market is almost exclusively expatriates. In Hong Kong, the majority are expatriates and returned overseas customers, however, we are also seeing a growing number of high-end Hong Kong Chinese customers. This is particularly the case in our Happy Valley store, where we have the right mix of staff and the right location appealing to that market segment.
Q) In terms of Hong Kong, how much of your business (both Flight Centre and FCm), is being driven by the mainland Chinese market?
Mainland China represents just over half of our Greater China business. In Mainland China, corporate travel (FCm) comprises 90% of our business, while in Hong Kong we are now equally focused on the corporate travel (FCm) and leisure travel (Flight Centre) markets following rapid growth in the Flight Centre brand over recent years.
Q) You will soon become the only international TMC in China with a 100%-owned domestic ticketing license. What advantages will this bring?
We have now received this licence, which will deliver benefits to our customers and our business. The licence gives us 100% control over our operations, services and business strategy, so we can operate independently rather than having to manage local partners. For customers, this means we can secure the best fares direct from airlines without needing to ticket through our existing partner or other consolidators in the market.
This also ensures that our Greater China business will continue to receive support and investment from FCTG Headquarters. Amongst other things, this allows us to continue offering credit to our large customers, while most of our competitors insist on credit card payments as they do not have the cash to fund the debtors.
Q) You also have an event operating license in China. How are your Chinese MICE operations performing at present?
In Mainland China, our event operating licence has enabled us to provide inbound MICE services for many years. So we have focused on supporting existing customers and other FCm countries with their needs and events. We are looking forward to the significant opportunity of providing outbound MICE services when the regulations open up further.
In Hong Kong, cievents has experienced strong growth over the past couple of years and is focusing primarily on luxury brands and pharmaceutical companies. cievents is currently servicing customers across the region, including Hong Kong, China and Singapore, and will expand into Mainland China when regulations permit foreign travel or allow event agents to secure outbound MICE licences.
Q) What further developments can we expect from Flight Centre Greater China in the year ahead?
Flight Centre will be opening new retail shops to open in Hong Kong, while there will be a new online booking engine to be launched on the Flight Centre Hong Kong website, and an expansion of the sales team expansion.
For FCm, the FCm Secure service (including travel alerts and traveller tracking) will be launched, while our online booking tools are undergoing continuous development. Our team of business development managers will also expand in response to growing demand in the corporate market.
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