Shanghai Odyssey Travel Deepens Its Tibet Service Strategy With Launch Of ‘One-stop Travel & Aid’

‘Travel Experts Show You Around Tibet’ Seeks Global Capital
And Project Partners

SHANGHAI, China, Jan. 16 /Xinhua-PRNewswire/ — Tibet Autonomous Region Travel Bureau Shanghai Office and Shanghai Odyssey Travel Co., Ltd. announced today that Shanghai Odyssey Travel, holder of the Chinese tour brand ”Travel Experts Show You Around Tibet,” expressed that in line with its development strategies, it is reinforcing capital investment, and shaping a brand new ‘One-stop Travel & Aid’ Tibet self-help travel service that it solely innovated. It aims at a prompt formation of global sales networks, scaled operations and extraordinary developments by giving full play to its predominance in brand and resources as the global Tibet travel expert, thus realizing a business pattern characterized by intensive ground services and professional networking. The company is also seeking cooperation with investment and development funds, and on projects around the world in flexible and diversified ways, with a view to consolidating and accelerating the expansion of Tibet’s travel market share, forming a global brand superiority and realizing multi-win developments upon where all partners complement each other with their advantages.

The completion of the Qinghai-Tibet railway in July 2006, the opening of Linzhi airport and the arrival of new airline companies to compete in the new Chengdu-Lhasa route are bound to help break the bottleneck of transportation issues to Tibet, reducing the cost of transport to Tibet. Consequently, the following changes will take place to the hierarchy and income level of Tibet’s tourists:

1. The number of young people with relatively low incomes will increase
sharply.
2. The number of tourists fond of freedom and long hassle-free travel will
grow remarkably, which will account for 40% of the total tourists, and
their travel consumption will take up 30% of the total Tibet travel.

Obvious changes will take place not only in the quantity and structure of Tibetan tourists, their general income level, but also in their behavior. The market share will alter thereby as the result of a domino effect.

”Tibet is rapidly becoming a booming travel market,” said Wang Jiping, Odyssey’s CEO, ”As a global professional agency for Tibetan travel, the advocate and designers of the brand new ‘One-stop Travel & Aid’ Tibet self- help service, we integrate the tourist, transport, accommodation resources in Tibet in response to the uniqueness of the travelers’ experience in Tibet and through the form of an ”open tour” to provide global tourists a series of options for traveling to Tibet, through reliable, secured and reasonably priced services. This will help expand our market presence and maximize our share in the emerging Tibet travel market.”

Tibet is especially charming in the eyes of ”Travel Experts” due to:

— Monopolized travel resources;
— Mysterious and religious travel options;
— Representative ecological travel;
— Unique mountaineering travel routes; and
— Miraculous humanistic travel.

As a result of many years’ development, a tourism industrial pattern has preliminarily taken form in Tibet, characterized by radiating from central Lhasa to the tourist attractions along the four ring routes in the east, west, south and north of Tibet and two tourist corridors. According to Tibetan statistics, from 1995 to 2001, the number of foreign and domestic tourists visiting Tibet increased by approximately 20% and they produced, per capital, a direct income of RMB1,100 to Tibet. In 2004, Tibet received 1.22 million foreign and domestic tourists, a growth of 31.7% year-on-year, and realized a total tourism revenue of RMB1.5 billion, accounting for 7% of Tibet’s GDP. In accordance with the Master Plan for Tibetan Autonomous Region Tourism Development, it is estimated that Tibet will receive 280,000 foreign tourists and 2.2 million domestic tourists in 2010, helping to generate a total tourism revenue of RMB4 billion, and it will receive 1.12 million foreign tourists and 9.05 million domestic tourists in 2020, generating a total tourism revenue of RMB22.8 billion (data source: http://www.chinatibetnews.com/ 15/12/2005).

In terms of market demand: thus far, according to Catholic’s survey, there are some 550,000 people who visit or are willing to visit Tibet through self- help travel each year. According to our market survey report, over two thirds of visitors to Tibet would like self-help and semi-self-help travel and about 50% of them, i.e. some 180,000 people, intend to choose the brand-new ‘One- stop Travel & Aid’ self-help travel service. Supposing the present per capita expense on transport to Tibet is RMB3,000, ”Expert” will harvest a business income of RMB540 million from this. In view of the enormous group procurement in the present market, it is not difficult to procure transport services at a cost of 20% lower than the market rate. After a deduction of the expenses on operations and upgrading of professional service standards at an amount equal to 10%, the company is expected to earn an annual profit of RMB54 million. In the last two years, Shanghai Odyssey Travel Co., Ltd. registered an annual profit of RMB35 million and its gross margin maintained at 13%-15%.

It is estimated that the company’s ‘One-stop Travel & Aid’ open tour service will experience three development stages over the coming years, namely: the boom period, steady period and mature period:

The Boom Period:

In the first 1-2 years, the company will hail in a rapid development period. Profits will come from the growth of sales revenue in tourism, particularly the service charge collected from customers due to the rapid popularization of its central product, Open Tour. It is estimated that about 180,000 people will choose Open Tour services in the future to produce an annual turnover of RMB540 million and an annual profit of RMB54 million.

Also, with the profit generated from traditional group tours, the gross profit of the company in the first year will hopefully reach RMB60 million. In the next few years of the boom period, as a result of the Matthew effect, its market shares will grow by 10% year-on-year and in the meanwhile, the market will expand by 20% each year. That is to say, it will take only a few years for the company to achieve an annual profit RMB160 million.

The Steady Period:

The market has fully recognized the ”Open Tour” concept. The “Expert” brand will become a synonym for Tibetan holidays throughout the world. Tourist sources, network resources and operation modes will become the largest assets of the company. The profit-making modes of the company will be diversified, for example, revenue from the promotion of tourist attractions, business income from advertising of specific products, hotel services and information consultation. All will become sources of the company’s business income. In this period, following the capacity expansion of the Qinghai- Tibetan Railway and the steady growth of national income, the original tourist transport service will also grow steadily, which will generate a profit of RMB200 million. The profit generated from other extended projects will climb to RMB85 million, approximately accounting for 30% of its total revenue.

Therefore, it can be estimated conservatively that the company will generate an annual profit of RMB280 million during the steady period.

The Mature Period:

Following the involvement of similar service providers, the company’s profit from Open Tours and other traditional business will be diluted. However, as a synonym of a world brand for Tibetan tours, the establishment of a Solution Center for Tibet tours, in-depth tours, mountaineering, adventure and other activities will never drop behind the times. Meanwhile, the profit from extended products will exceed that from the previous major business, for example, profits from the development of tourist attractions and construction of infrastructure, and the income from specific advertisement products, etc.

Therefore, it can be estimated that during the mature period, the total revenue from tourist transport service will maintain around RMB200 million; the revenue from other services will exceed that generated from its major business in tourism operation and the annual profit will go beyond RMB400 million.

To fulfill the above-mentioned goals, Shanghai Odyssey Travel Co., Ltd. has made good preparations. It adjusted and integrated its strategy; resources and organization structure to ensure its strategic goals are realized.

In respect to strategy, the company took market-oriented actions and launched a market information exchange and communications regarding the tour product ”Travel Experts Show You Around Tibet,” targeting the subdivided market, which as a result, rapidly promoted this new mode of travel to Tibet. By guiding the market to form a new travel behavioral mode, it wins the largest market share.

In respect to organizational structure, the company has made some adjustments, adapting itself to the market and the local features of Tibet. It established a dual-center operation mode and will upgrade it in the future with a view to satisfying needs from its future products and the market as well.

In respect to management and marketing, the company has implemented electronic and networking management and marketing since 1996 in order to meet the requirement of cross-regional operations. It also built international websites: http://www.tibet-tour.com/ and http://www.himalayatours.com.cn/ to serve global customers. In the meantime, it established its own CRM system in 1998, to implement networking management on its marketing center, operating center, agents, suppliers and clients, which not only realized synchronized information operations, but also left a reliable interface for quick integration of new resources. All these efforts enable and equip the company to grow into an international company. Its construction of B2C, also the online booking system, will help clients make arrangements for their ”travel in Tibet” with a more user-friendly and prompter interface.

In respect to R&D for Tibetan tours, the company established the Tibet Tour Research Center to ensure its remains a constant market leader. The Research Center, under the leadership of Bi Lugui, a famous scholar of the Chinese Academy of Social Science, consists of personages famous in the Tibetan tourism industry. They have conducted profound research and discussions on the future trends and new modes of Tibetan tours. The Research Center will not only submit analysis reports on the consumption mode of Tibetan tours, but also make suggestions and proposals to support the company’s marketing strategy.

In respect to tourist products, the company has abundant product chains. Based on the Open Tour series, it will constantly expand and integrate the product chains from both upstream and downstream in response to the Tibetan features. Thus far, it mainly provides ”tickets + Lhasa Assembling Center service + hotel + two days tour” and point-to-point transport/tour services in Tibet. In the future, with its products popularized in the market, the mystery and beauty of Tibet will be gradually shown to the world.

In respect to resource cooperation, powerful resources are to be introduced in 2006. For example, a strategic partnership is built with a large state-owned auto operation group, and deep cooperation initiated on the identification and implementation of relevant service standards and procurement of some services, which as a result satisfied the rapid expansion demand of the new self-help travel for superior resources. This ensures successful project implementation.

And finally, in respect to human resources, in 2006, the company will foster a number of professional managers who are familiar with international management modes and have knowledge on Tibetan travel through continuing the talent importation and training. They will act as heads of different functions to help the company face up to new challenges and meet new requirements, while an international management company will be introduced to help streamline relevant operation procedures.

Ms. Wang Jiping indicated, ”As the industrial leader and a travel agency specializing in Tibetan travel, we hope to share the cooperative advantages of international resources, promote the global influence and market value of the brand ”Travel Experts Show You around Tibet” and grasp the opportunities arising from the development of the Tibetan Tourism market through international capital involvement and project cooperation. Odyssey, as a business operation platform for Tibet’s global tourists, brings dynamic opportunities for all cooperation partners.”

About Shanghai Odyssey Travel Co., Ltd. and Tourism Brand ”Travel Experts Show You Around Tibet”

Odyssey Travel Co., Ltd. (hereinafter referred to as ”Odyssey”) is a company specializing in travel services to Tibet. It is a private run stock holding company based on the original business of the Tibet Autonomous Region Travel Bureau Shanghai Office (inaugurated in 1995). Engaging in provision of comprehensive travel services, it is the only company in Shanghai that specializes in Tibetan tours, focusing on organizing tourists to Tibet from Shanghai, and the other parts of the world, as well as providing local reception services in Chengdu and Tibet.

Its major revenue sources come from travel services and agent business. Thus far, it has set up partnerships with hundreds of travel agencies. Odyssey operates under the guidance of the concept of ”Based on Tibet and Go Beyond Tibet.” Its Tourism Brand ”Travel Experts Show You Around Tibet” takes lead over Tibetan peers. Its annual revenue over the last two years was RMB35 million and the net profit remains between 13%-15%. Odyssey is headquartered at 2B Qihua Tower, 1375 Middle Huaihai Road Shanghai, China and its branch office, also the local reception center, is located in No. 221, Beijing West Road, Lhasa, which is responsible for welcoming travel teams to Tibet.

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