Wanda Cultural Group has achieved well above this year's target revenue of RMB7.1 billion set by Wanda Group CEO Jianlin Wang, with projected total revenues from tourism of at least RMB7.5 billion, according to the group's vice president Yueming Mo.
The comments were made as Wanda Tourism was concluding its latest acquisition of Kunming Scenic Travel's 51% equity, making it the group's 11th regional tour operator acquisition since its establishment in October 2013.
Average growth of 30% for subsidiaries
Mr Wang said in the July interim report that Wanda Group’s tourism subsidiaries reported RMB1.71 billion revenues, equivalent to 24% of this year's annual revenue goal of RMB 7.125 billion.
“Our tourism subsidiaries achieved average revenue growth of around 30%. All our acquisitions performed well locally and after joining Wanda Tourism Group they receive plenty of capital and informational support,” Mr. Mo said.
Wanda Asia Travel president Kan Tao told reporters that the boost in capital and information his company received after joining Wanda Group significantly contributed to the company’s 30% business growth his year.
Industry observers also point out that subsidiaries can retain and attract more talented personnel after joining the Wanda Tourism Group. One observer said: “Quality personnel is vital in the travel industry. New customer sources will be developed whenever a company recruits an experienced executive or opens up a new business stream. For example, Hubei Wanda New Air transport had revenues increased by at least tens of millions of RMB after adding a new distribution point in Wuhan.
Mr Mo said: “CEO Jianlin Wang set a goal of 210,000 arrivals to the Changbai Mountain Ski Resort for the 2014-2015 ski season, 50% higher than last year. This requires Wanda Tourism subsidiaries to contribute at least 110,000 visitors to meet 55% of the target number. Our company data show that we have already reached our target last Friday."
"Currently Wanda Tourism is investing 20 million yuan into developing an Enterprise Resource Planning system that will integrate the operational platforms and information platforms of our subsidiaries. We are also searching for acquisition targets among top online companies," he added.
Many industry observers say that there isn't a clear distinction between online and offline companies in China's travel industry, as OTAs steadily move to offline markets as in the case of Ctrip, while some offline tour operators are also developing an online presence. "The future of the industry will definitely be in online and offline integration," one observer said.
Blazing a trail in the travel industry
Mr. Mo said currently tour operators merely provide intermediary services and have no resources upstream nor control over operations downstream. "The problem is that while tour operators are critical in the travel industry operational chain, they have the worst profitability," he said.
“We would like to move away from the old business model in the development of Wanda Tourism and become a travel company with control over resources. For example we just acquired Kunming Scenic Travel specializing in tour operations and we need more supporting resources from the upstream or else we will be reduced to passing on all our business to other hotels, attractions, and airlines," he said.
"Wanda Group has many cultural tourism projects and resorts that have diverse and inclusive operations for travel, dining and accommodation, and these resources will come under Wanda’s travel agencies," he said.
Currently, Wanda Cultural Industries Group has 10 fields of operations, including resorts, cultural tourism parks, tour operators, film and television productions, stage show productions, theme parks and cinema chains.
It is currently operating Changbai Mountain International Ski Resort cultural tourism park and will open Wuhan Central Cultural District in December and a Xishuangbanna project in 2015. The Harbin, Qingdao, Hefei and Wuxi projects started since April 2013 are currently under construction.
Each Wanda City project will include eight large attractions such as a Wanda Mall, large-scale outdoor theme park, cinema and tech park and large-scale stage shows.
Mr. Mo said that Wanda Tourism is tasked with enhancing facilities while increasing the flow of visitors to attractions at the same time. "If a good opportunity presents itself we wouldn’t rule out getting into the scenic attractions sectors through capital investment or management service," he said.
As to the overall plan for acquisitions, he said Wanda Tourism has allocated RMB2 billion for acquisitions with the goal of becoming the largest tourism group in China by 2016 and the largest globally by 2018. “We would like to be within the top three national tourism groups in five years, this year we already rank among the top 15 nationally,” he said.(Translation by David)
