United Embraces Alipay as Western PaxEx Looks East
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APEX Insight: As Chinese tourists look to visit Europe and North America, airlines vie for the lucrative opportunity of flying them to these destinations. By employing Chinese-speaking flight attendants, offering Chinese-language websites and accepting China’s largest online payment platform, Alipay, airlines hope to woo Chinese travelers in 2016, in what has been declared the US-China Tourism Year.
Alipay is the largest online payment platform in China, and one of the largest in the world, with more than 400 million users and counting. The payment service is part of mega-magnate Jack Ma’s Alibaba Group, whose $25 billion IPO is the biggest of all time (even though investors were actually buying shares of a Cayman Islands shell company). That magnitude of e-commerce volume has commanded the attention of US airlines. United Airlines announced last week that it will enable Alipay users to purchase flights using the popular online payment service. Delta Air Lines brought Alipay into the fold last spring.
In 2015, Chinese citizens accounted for nearly three percent of foreign visitors to the United States, and both countries see that trend only increasing. Indeed, 2016 has been declared the US-China Tourism Year: the name, if a bit clunky, is accurate in terms of both countries’ economic goals.
2016 has been declared the US-China Tourism Year.
It’s no secret that Chinese tourists are visiting Western destinations in greater numbers, but Western airlines are the ones who want to get them there. Last year, Chinese carriers overtook their US counterparts in terms of traffic between the two countries. To compete, United and Delta have found a relatively straightforward way to inject a bit of familiarity into the passenger experience on offer to their Chinese customers.
American carriers are not alone in seeking Chinese attention. Ethiopian Airlines, the largest airline in Africa, is taking a more on-the-nose path to wooing Chinese travelers: hiring Chinese flight attendants. The move, says Ethiopian Airlines CEO Tewolde Gebremariam, was made because almost none of Ethiopian Airlines’ Chinese passengers spoke English, and crew needed to be able to convey vital information before and during flight. Also, Gebemariam told the AFP, China is Ethiopian Airlines’ biggest market.
Meanwhile, Manchester Airport (MAN) is beckoning jets from China to its underused runways. MAN reckons it can support 25 additional long haul routes, and daily flights from Beijing could become a reality.
As in the Air, So on the Ground
Every industry connected to international travel is trying to make its presence felt in China. From joining Sina Weibo (China’s version of Twitter) to providing slippers and tea-kettles in hotel rooms, tourism boards and hotels alike are vying for that valuable business. Think for a moment about the brand ubiquity of American hotel chains: Everywhere you go, there’s a Sheraton or a Rosewood. With experience in offering familiarity to US travelers abroad, these brands hope to apply the same principle for Chinese travelers.
Uber also has its sights set on China, partnering with HNA Group, who run Hainan Airlines, to expand its ride-sharing reach. In doing so, the company enters a local passenger-transportation market that’s both hotly-contested and borderline-illegal. Still, Uber has clearly decided that getting into China is worth the trouble. Much like the global recognition associated with Golden Arches, that little black car inching towards a tourist’s location can provide a sense of comfort as well as convenience.
The Next Big Thing
The shift in international travel patterns is only beginning. Today’s gaze towards Asia may turn out to be a practice round for what comes next. While China is set to overtake the US as the world’s largest passenger market, IATA shows that, percentage-wise, the fastest-growing air-travel markets are in Africa. What will route maps – and airlines’ internal strategies – look like if and when Lilongwe, Malawi; Kigali, Rwanda; and Freetown, Sierra Leone become more important international hubs? Meanwhile, Cuba – home to the Caribbean’s largest population base – is opening up as never before during our lifetimes.
“The demand for air transport continues to grow,” says IATA director general and CEO Tony Tyler. “There is much work to be done to prepare for the seven billion passengers expected to take the skies in 2034.”