In late December 2019, the outbreak of the COVID-19 pandemic in China suddenly halted industry and economic activity, resulting in a huge impact especially on the tertiary industry, where hospitality is a vital component. To make matters worse, the escalating emergency disrupted people’s travel plans. People were warned to stay at home, and many hotels shut down temporarily to avoid continuous business loss. This caused a dramatic fall in Chinese hotel occupancy by 89 percent over two weeks, as the virus spread rapidly and widely (HVS, 2020).
While the epidemic has pressed the pause button for the global economy, it has also allowed industries and companies to start an innovative survival process quickly. Particularly in the hotel market, live streaming has displayed its power. At first, since almost all the cities were locked down and people were afraid to travel, their desire to hang out was powerful. New media such as TikTok and Kuaishou opened a new column called “Cloud Travel” for people to post short videos, allowing people to virtually roam around the world without stepping out of the door.
People imagined their future travel plans at this stage. One of the leading OTAs in China, Trip.com, noticed the opportunity. James Liang, CEO of Trip.com, began live streaming every week on the popular new media platform. The live streaming aims to advertise and sell hotel products at a relatively lower price. Customers can purchase the products (usually pre-sold rooms and F&B packages) in the live streaming room and redeem them within a certain time period (a refund is available if the product is not used).
With the recovery path of COVID-19, people were seeking places to visit, after having not traveled in several months. Right after the cancellation of the cross-city/province travel ban, Trip.com organized its live streaming show weekly. On his first show, Liang spent four hours mobilizing more than 60 million Gross Merchandise Volume (GMV), which is equivalent to the collective revenue of 900 high-end hotels (Trip.com, 2020). Under the dual guarantee of the Trip.com partner system and Liang’s personal IP blessing, the instantaneous network-wide lowest price in the Trip.com live streaming room not only helps the high-end hotel accelerate its business recovery, but also preserves the brand. Well-known brands such as Hilton, InterContinental, Hyatt, Shangri-La and Accor have joined. Moreover, Liang and his team can customize to address different customers’ needs accurately. For example, millennials prefer watching and buying hotels with creative functions or decorations (anime IP-themed room, smart room, etc.). In contrast, generation X will buy more family-oriented vacation products.
The great results that live streaming brings to hotels have increased confidence in recovery of the hospitality business. The next issue to solve is how to operate the customers' live streaming attraction, transform them into loyal guests of a hotel group/OTA, and gain a higher redemption rate after the pre-sale period. And importantly, the hotels should maintain a level of quality service, even if the hotel demands increase, while carefully monitoring new and existing cases in different areas, and adjusting marketing strategies accordingly.
This blog post placed third in a graduate student blog competition presented by the HFTP Foundation in Fall 2020. Participants are students earning their HFTP-UH Global Masters Certificate, a program with candidates of the Master of Science in Global Hospitality Business. This program is a partnership between the CN Hilton College at the University of Houston, the School of Hotel and Tourism Management at Hong Kong Polytechnic University and EHL. The three blog posts that received the top scores will be published on HFTP Connect through March 2021.
Shuyi Wang is a master’s student pursuing the Master of Science in Global Hospitality Business program, which is in partnership of three schools: EHL, the Hong Kong Polytechnic University, and University of Houston.
Zhang, C., Cui, R., & Xu, C. (2020). Impact of COVID -19 on Chinese Hotel Industry. Retrieved from https://www.hospitalitynet.org/file/152008810.pdf
Trip.com. (n.d.). 2020 Trip.com Group Boss Live Stream Big Data Report. Retrieved from https://www.yixieshi.com/143358.html