Tourism and event experience as contributors to business growth

Discuss about the Tourism Event Experience and Mainland China.

The tourism or event experience and Mainland China is the thesis statement of the following literature review. The purpose of selection of this topic was to highlight the different aspects of tourist or event experience in Mainland China and how those are affecting the business performances. Tourism or an event creates a good opportunity for not only new businesses, but also creates scope for the existing businesses (Arlt, 2013). Tourism contributes a huge amount of revenue in the GDP of a country and hence, it has an importance in the portfolio of a nation (Kwek & Lee, 2013). Overtime, as the technology has advanced and the general level of income of people has increased significantly across the world, the incidence of global tourism or international events has increased multiple times rapidly. Mainland China is also no exception in this regard. Over the years, there is an increasing trend of tourism and international events in the Mainland China and the business sector has gained from this trend. The increasing number of international tourists has contributed in the growth of the tourism sector and on the other hand, there is increase in the business opportunities and improvement in the amenities, which in turn helped to draw more visitors from different countries (Xin, Tribe & Chambers, 2013). Through the literature review, the importance for research for a superior business performance by analyzing a business situation and formulating problem statement and interpreting the findings for the business decision making will be addressed.

Mainland China, also known as the Chinese Mainland, is the geographical region under the jurisdiction of the People’s Republic of China (PRC). It includes the Hainan Island but not the administrative region of Macao and Hong Kong. Tourism is an important sector in this region, contributing significantly in the economic growth. There are many important tourist spots in the mainland China, Beijing being the first spot in the list. It captured the first place in the list of Best Tourist City 2017 in the Chinese mainland and followed by Chongqing, the mountainous city in Southwest China and Shanghai, the economic capital of the country (Chinadaily.com.cn., 2017). Number of domestic and international visitors, income generated from the international tourism, contribution of the tourism in the growth of the local economy, relevant amenities and facilities and the traffic conditions are the factors contributing in giving the ranking to the tourist spots (Jin, Weber & Bauer, 2012).

Role of research in improving business performance

Tourism and international events provide immense opportunities for business to an economy. As there is a rapid increase in the tourism in mainland China in the past few years, the tourism sector grew too. Many factors work together to bring a superior work performance of a business. Those factors are namely, business strategy, execution of the strategy, work culture, structure of the organization, talent, innovation, leadership, mergers and acquisitions and the partnerships (Song & Hsu, 2013). All of these factors contribute significantly in making a business perform in the most superior way.

Research work is extremely important for the growth of any organization. Many organizations have a separate Research and Development (R&D) department to cater to the needs of research. For expanding the business, the management must invest substantial money and time for relevant research of the market and business opportunities. As stated by Altinay, Paraskevas & Jang (2015), the purpose of research is to produce knowledge and hence, it has to be of high quality. The outcomes of the research have significant implications for the future policy making and project implementation in an organization. The organizations indulge in R&D to find out the new developments in the market, loopholes in their activities and performance, ways to improve their performance, scope for internal growth and development (Sekaran & Bougie, 2016). As stated earlier, the factors resulting in superior business performance can be influenced by the knowledge gained through R&D. The organizations can gain knowledge about the new developments and trends in the market through a high quality market research and can implement new found ways in the business strategies. This would help the business in improving their performance and productivity. Through the research, the businesses also get to know the new ways of executing strategies, implementing new ways for improving leadership strategies (Veal, 2017). Thus, it can be said that, research plays a very important role in improving the quality of performance of the businesses.

Regarding the tourist or event experience in Mainland China, the research activities play a significant role in generation superior business performance. Through effective research, the tourism sector gets an idea about the factors that influence the businesses in this sector and they can act accordingly to improve the tourist experience in that region. In the words of Deery, Jago & Fredline (2012), the tourism sector needs to conduct research on number of domestic and international visitors coming to Mainland China, push and pull factors of the tourist spots, ways to improve the services, potential and growing business opportunities for the local people, scope for attractive events that can draw more visitors. This way the tourism sector can get information from the market research and can take appropriate measures to deliver superior business performance.

Research opportunities in the tourism sector

There has always been a positive relation between the tourism and shopping. People always prefer to shop from the places they travel. Not only souvenirs, but people buy other consumer products also. Hence, the tourism sector helps in the growth of the consumer products manufacturing sector, which includes apparel, cosmetics, accessories, jewelries, shoes and electronics. From the report by China.org.cn (2018), Beijing is expecting a 7% rise in the revenue from tourism in 2018, as there has been a trend of increasing spending on the food and shopping by 24.7% in the total revenue from the retail sales of the consumer goods. In 2017, the total revenue from tourism amounted to 546.9 billion Yuan or USD 86.5 billion, which was an increase by 8.9% from the previous year’s revenue. The number of tourists increased by 4.3%, which totaled around 297 million people in 2017. It has been found that, the consumer goods of Beijing brought in a huge amount of revenue in the country’s economy. According to a report in Xinhuanet.com (2018), the Chinese tourists have changed their spending patterns lately and they display more diversified and rational pattern in their plan of spending. People are now shopping based on their needs rather than buying unnecessary staff. The Chinese tourists preferred to spend on sightseeing tours and health care products in the past, but currently they are spending more on the service sector, such as, food, art and culture, cosmetics, accessories etc. The retail sectors of Beijing and in other places of Mainland China are henceforth focusing on this area by offering more diversified products and building more convenient shopping malls (Wu, Wall & Pearce, 2014). Not only during a visit for the purpose of travelling, but when people are travelling for a particular festival, then also the tourists are spending a substantial amount of money on shopping.  For example, it was highlighted by Xinhuanet.com (2018), that during the Spring Festival in Beijing, the revenue of the retail sectors has increased multiple times.

The new trend of shopping becoming a tourist activity is known as shopping tourism (Choi, Heo & Law, 2015). It yields a considerable amount of the expenditure from tourism. From the previous research papers, it is found that the tourists who come for shopping, generally stays longer in a particular destination and spend around three to four times more on the food and shopping than the holiday tourists (Wu, Wall & Pearce, 2014). Many authors have considered shopping as a main motivation for tourism. Hence, this is a great opportunity for business in the retail sector of Beijing and in other tourist spots of Mainland China.

Growing trend of shopping tourism in Mainland China

Beijing, being the best tourist spot in the mainland China, offers many shopping destination along with the other popular visitor attractions. One of the most visited shopping destinations is the silk market of Beijing. Initially, it was an outdoor market, named as silk street, but now, it is a six storied shopping mall, that offers more than just silk products (Shoppinginbeijing.com, 2018). Silk street contributes a huge amount in the total retail revenue of Beijing. From the report of WTO, it is found that there are total of 447 shopping destinations in the city among which shopping mall consists 33.1% followed by gift and souvenir shop (18.3%), chain supermarket (17.2%), antique store (12.3%) among the major destinations. The minor destinations are the walking street consisting 9.8% of the total and flea market and bazar consisting 9.2% (unwto.org, 2017).

Table 1: Data on shopping options in Beijing

 (Source: unwto.org, 2017)

From the above data, it can be said that, the retail sector of Beijing, especially, the gift and souvenir shops and other types of consumer goods have immense opportunity for business. As the tourism sector has been developing and number of domestic and international visitors is increasing rapidly, the incidence of shopping tourism is also increasing (Chang, 2012). The tourists, who come to attend any event, also spend on shopping. This has led to a rapid increase in the number of shopping malls with extremely diversified consumer products along with the chain supermarkets, gift shops, antique shops and stalls in the streets and flea markets. Hence, the shopping tourism has developed in Beijing and this provides excellent business opportunity.

The problem statement for research follows from this business situation. Research can be done on whether consumer goods are more popular among the tourists in the mainland China or the gifts and souvenirs. In Beijing, the number of shops in the shopping malls selling consumer goods is much more than the other types of shops. However, not every tourist buys the cosmetics or accessories, but every type of tourists prefers to buy gifts and souvenirs. Hence, even if the number of souvenir shops is less than the shopping malls, but the percentage of revenue might be more. Therefore, research can be done on whether the consumer goods brings in more shopping revenue or the gifts and souvenir shops in the tourism industry of mainland China.

Decision making is a very crucial part in a business. Popovi? et al. (2012) say that it should address the actions needed to achieve the organizational goals and objectives, especially the profitability. Although, the factors influencing the decision making actions of different organizations are different, few factors are fundamental in any type of business. Those are as follows:

Return on investment: This is the most important factor while calculating the profitability of the business. For each type of business strategies, there are different ways of calculating the returns and combined returns give the total return on the investment. This in turn determines the profitability of the business (Ford & Richardson, 2012).

Opportunity cost: Opportunity cost refers to the cost of making one choice over another (Stock & Watson, 2012). When the resources are limited, the business owners must choose one option over the other depending on the opportunity cost.

Brand impact: Decisions affect the brand image many times, on the other hand, brand image influences decision making. Any established business should make decision cautiously so that their brand image is not affected in a negative way (Thiel et al., 2012). Hence, public perceptions and the intangible gains should be considered during decision making in any business.

Impact on resources: Calculation of profitability includes the consideration of the overall impact on the different resources of the business, such as, human resources, capital resources, technology and many more. If a new business decision has a possibility of hampering the activity of other resources then it should be considered before taking the final call (Craft, 2012).

From the above discussion, it can be suggested that, the business owners should consider the above mentioned factors while making a decision about the type of business to be launched in the tourism retail sector of Beijing. The expected outcome of the research would be the verdict on the type of profitable business associated with the tourist or event experience in the Mainland China and the findings should be interpreted in terms of the factors that have a significant impact in the decision making of the business.

Conclusion

Tourist or event experience and Mainland China revolves majorly around the shopping tourism. Data from the Beijing tourism shows that, in 2017, the spending on the shopping and food constituted 24.7% of the total revenue from the tourism sector. Among the retail shopping, it is found through research that retail of consumer goods and gifts and souvenirs is the major source of revenue. Hence, there is immense scope for business in this sector. However, it needs to be evaluated that which sector provides more profitability; and based on that and few other factors, the decisions must be made. Tourist/event experience in the Mainland China is currently heavily dependent of the tourist shopping and this opportunity can be utilized by more businesses to expand as well as contribute in the economy of Mainland China.

References

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