【Record】Mr. Gao Zhiquan, Vice President of China CYTS Tours Holding Co., Ltd., delivers a speech on the forum of New Normal of Tourism amid COVID-19

Moderator: It's my great pleasure to have a talk with you. We have about three simple segments in this section. The first one, can you tell me in one or two minutes about you and your organization and what you expect to be involved in this conference?

Gao Zhiquan, Vice President of China CYTS Tours Holding Co., Ltd.

Gao Zhiquan: Thank you. Good afternoon, ladies and gentlemen. I come from CYTS Holding Co., Ltd. My name is Gao Zhiquan. It is 40 years since CYTS was founded in 1980 by the Central Committee of the Communist Youth League of China under the guidance and support of the Central Committee of the Communist Party of China. In 1997, CYTS became the first listed company in China's travel agency industry and entered the capital market.

In 2018, according to the group reform plan deployed by the CPC Central Committee, CYTS was transferred to China Everbright Group. Therefore, we are now CYTS Tours Holding Co., Ltd., a subsidiary of China Everbright Group.

We can use three labels to summarize our enterprise. First, we now call it the industry-finance combination, because when we are assigned to Everbright Group, a financial enterprise, and we believe that industry-finance combination will be the biggest advantage of CYTS in the future development. Another label is O2O, because under the rising tide of the Internet, CYTS is relatively the early one in the travel agency industry to use the Internet, and in the aspect of O2O, we've found our own way in online and offline integration.

Thirdly, we are also a well-known trademark in China. These three labels can show what CYTS is like.

At this meeting today, I have said on many occasions that every step taken after the pandemic is the first time since the pandemic. It is a great honor to be invited by the host organization to discuss with you the development path of post-pandemic tourism. It is also the first time since the pandemic.

I would like to call the recovery of tourism enterprises from now on, from the beginning of the pandemic, or in the post-pandemic era, the post-war reconstruction. We said Wuhan launched a war of defense and containment, and China has organized a people's war against the pandemic. Tourism enterprises, as the hardest hit area of this "war", are now facing the arduous situation of post-war reconstruction. Therefore, I hope to learn better ways of post-war reconstruction through such exchanges.

What's more, through such a conference and such a forum, we can boost the determination of consumers and make our due contribution to the high-quality development of China's tourism enterprises.

Moderator: Mr. Gao, just now you mentioned this year is the 40 anniversary of CYTS. We who are engaged in tourism for many years all know CYTS well. The CYTS started from a travel agency. Especially in the early stage, CYTS is simply a youth team managing inbound tourism. According to what you just now introduced, the development of the enterprise has been very comprehensive and diversified. I checked the scenic spot operation, tourism services, integrated marketing and smart hotels. It is already a very comprehensive enterprise. However, in such a sector like tourism services, the AoYou of CYTS you led, I presume that it should be a core. As you all know, the AoYou of CYTS has always been focused on overseas travel, with the domestic market as an important supplement. However, in the context of the pandemic, it is still a very difficult time for outbound travel. Domestic tourism is recovering slowly and has become the main market for many enterprises. This morning, I also mentioned that many of those who used to do overseas business have also turned to domestic business. So my two questions are as follows:

First, what do you think of the current development of the domestic tourism market and what role can travel agencies play in it?

I don't know whether my second question is proper or not. What are your suggestions on outbound tourism in the future? What kind of plans does your business have? Thank you.

Gao Zhiquan: Good afternoon, ladies and gentlemen. The topic given to me by the moderator is a very challenging one. From the perspective of CYTS, we should call it "4+3" mode. One part is integrated marketing, tourism services, scenic spots and smart hotels. We have integrated marketing that many of you know about, because it's an independent sector. The other part is scenic spots, which have recovered well in August. We have two scenic spots, Wuzhen and Beijing WTown. Wuzhen has recovered by about 80%. In August alone, Beijing WTown should be at or slightly above the level of the same month last year.

But in terms of tourism services, the travel agency still is a hard hit area. In the past, CYTS had a pattern of "inbound tourism + domestic tourism + outbound tourism", but the weight was different. The "inbound tourism + domestic tourism" accounts for nearly 30% of the weight, and 70% of the weight came from Chinese citizens' outbound tourism. This pandemic brought about an industry-wide shutdown, and the impact is huge. The tourism within the province reopened in April, and interprovincial tourism reopened in July 14. But outbound tourism still has a long way to go. For an enterprise like us, the challenges we face are enormous.

During the Spring Festival, we did stop production but did not stop work, because after January 26, all the outbound tour groups, with a large number of people in them, could not go abroad. We were facing a large number of refunds, and we had to appease the guests and do other work. All these took a lot of time. Of course, our whole industry is facing the same problem. In the face of such a situation, CYTS should adjust its work and business layout. We now basically focus on the domestic market. We now focus on two areas. One is the field of recreational vehicle, and the other is the red tourism areas. There will be a big event recently. Please pay close attention to us.

The second question is what role tourism companies, especially travel agencies, will play in this pandemic and what role we will play in the future. This pandemic is unprecedented, but so are the opportunities for our traditional tourism business. As we all know, in the past few years, there have been several major events in the world with global impact, such as the turmoil in the Middle East, swine flu, and SARS in 2003. All of them had a huge impact on tourism, but the impact was instantaneous. For example, for the unrest in Egypt and Libya in the Middle East, we can simply take back overseas Chinese people, and we will be fine. I can choose not go to Libya, and choose to go to other places.

However, there is one point that is still fresh in your mind. During these processes, the safety of customers was greatly guaranteed and interests of customers were maximally protected during travel organized by travel agencies, especially during the COVID-19 pandemic. Think about the suspension of domestic and independent travel on January 24, and the suspension of outbound travel on January 26. Our term is "package tour 7 + 9", the two I summed up as organized tours. All tourists went abroad in the organized tour, and they safely returned to the destination on February 5, on February 7, or some time later. They were in good health, and their whole trips were almost uninfluenced. This is the advantage of organized tours. Travel agencies play a huge role in this.

In the past, we have been emphasizing one thing, that is, high-quality development. Our tourism is individualized and liberalized. However, individual tourists and liberalization in our tourism do not mean high quality. Therefore, after the pandemic prevention and control becomes normal, tourism enterprises will face greater opportunities in this process, whether at home or in the world, or in the future when opening up to outbound tourism. I think the most important thing in the normalization of pandemic prevention and control is safety. The most important aspect of pandemic security is that it is preventable, controllable, predictable and traceable. Under such circumstances, the pandemic can be prevented, controlled, predicted and traced. Only organized travel can guarantee these four points.

Therefore, under the normalization of pandemic prevention and control, it is necessary to meet the needs of consumers and the general public for travel. Organized travels may also become much more common, at least until the lockdown is lifted.

Therefore, I think tourism enterprises will play a bigger and bigger role in the future. Of course, we are having a hard time now. Whether we can survive now is a very important issue. What's more, whether it's a destination in Colombia, Universal Studios, or JTB in Japan, can they do business without the intermediary role of tourism companies? So travel companies should have confidence in themselves. But facing the future, we must have the ability to improve ourselves from products to services to adapt to this new normal.

Therefore, in the new situation, it is not that our tourism enterprises have closed down and disappeared completely. I think there are still many opportunities for us. It is time to show our wisdom and ability.

The second question is about Chinese outbound tourism in the future. As for this, I think the safety amid the pandemic and the safety of Chinese tourists in the international situation are two issues we must pay close attention to. From the perspective of pandemic prevention and control, it is favorable to start with the reopening of safe states. It is impossible to stop globalization. If countries don't open their borders, there will be no communication, and everything will just stay online. Like what Mr Yasuda said just now, the virtualization path, the globalization without the involvement of all senses, is not comprehensive.

Thank you.

Moderator: Thank you, Mr. Gao. One of your opinions has just made a very deep impression on me. I think it is also worth thinking about by all of you, especially by the travel agency companies, including the practitioners. That is, individual tourists and liberalization. In the past, we used to think that this is a trend in the future, which must be related to high-quality development, or it must be an inevitable manifestation of high-quality development. In fact, it is not inevitable. Just now, Mr. Gao said that against the backdrop of the normal pandemic prevention and control, the most important thing for a tourist is not whether he goes with a group or on his own. The most important thing is what value you can offer him. I think this is a problem particularly worth thinking about for our enterprises.

Moderator: In the final round, can each of you use three key words to summarize the impact of the COVID-19 pandemic on us and the response of our industry?

Gao Zhiquan: The first one I want to say is unprecedented. We are being challenged by an unprecedented pandemic. The last one is also called unprecedented, and we have unprecedented opportunities. The second is wisdom. We need to be wise in addressing unprecedented challenges and embracing unprecedented opportunities.

Briefly speaking, this pandemic has brought all our tourism industries back to the starting point, and we are back to the starting line. Talking about the education of children, we shall not lose at the starting line. Now, whether they are large enterprises or small enterprises, the bigger the enterprise, the severer the loss, and the heavier the burden. So we're all back to a new starting line. Now the race has restarted, we need to be smart to win the second half. Thank you.