Financial Services Association, March 13 (Reporters Liu Ke and Chen Kang) In the past two years, Xiangyuan Cultural Tourism (600576.SH) has made quite a big effort to acquire and integrate domestic tourist destination assets, successfully completing the transformation of a service provider in the cultural tourism industry.

“In the future, the company will adhere to the strategic idea of 'integration of investment and operation', continuously improve the operating efficiency of various tourist destinations through a series of measures such as upgrading tourism products, improving tourist facilities, and building an ecological cooperation circle for tourist destinations, continuously improve the company's operating performance, and continue to deeply cultivate the cultural tourism circuit around the company's strategic layout and business plan.” Wang Heng, chairman of Xiangyuan Cultural Tourism, told the CFA reporter that the travel sector has become the company's main revenue segment, and the future is not only the focus of business investment, but also the most promising business sector.

In 2022, Xiangyuan Cultural Tourism restructured to achieve a strategic transformation, incorporating high-quality scarce cultural tourism assets such as Zhangjiajie Bailong Ladder, the ancient city of Phoenix Tuojiang Cruise, Zhangjiajie Huanglong Cave cruise and audio explanation services, and the Anhui Qiyunshan Ropeway into listed companies, forming a business pattern of collaborative development of “tourism assets, animation derivatives, animation, film and television, and digital technology”. Since August 2023, Xiangyuan Cultural Tourism has strategically invested in Bifeng Gorge in Ya'an, Sichuan, and placed two new business segments: scenic hotels and supporting services in the Qiyun Mountain and Huangshan regions, and the tea business integrated with cultural tourism, to promote the investment and operation transformation of Xiangyuan Cultural Tourism into a leisure and vacation destination.

At the end of February this year, Xiangyuan Cultural Tourism decided to invest abroad to establish a wholly-owned subsidiary “Xiangyuan Travel”. Wang Heng said, “Based on the company's operation and strategic upgrading, in order to further focus on user operations and optimize the supply of travel service products, digitally create an 'online+offline' one-stop leisure and vacation brand, promote the company's strategic upgrade from 'cultural tourism and leisure vacation destination investment and operation' to a 'cultural tourism industry service provider', and actively build the company's second growth curve.” The “Xiangyuan Travel” brand launch will be released later.

Talking about performance: the tourism market is recovering and transforming into leisure and vacation

During the Spring Festival this year, the scenic spots under Xiangyuan Cultural Tourism received 4871,000 visitors, an increase of 40.30% over the 2023 Spring Festival holiday; an increase of 71.23% over the 2019 Spring Festival holiday; revenue of 31.102 million yuan, an increase of 37.81% over the 2023 Spring Festival holiday; and an increase of 68.64% over the 2019 Spring Festival holiday.

A CIFA reporter learned that most scenic spots have reached a peak in the average number of visitors during the Spring Festival. In particular, resort hotel products and second-hand consumer products have increased significantly.

Xiangyuan Cultural Tourism's move to acquire scenic resorts and continuously expand the resort cultural tourism business shows that the company is shifting from “investment and construction of tourist destinations” to “in-depth operation of leisure resorts.”

Take the company's three-step approach in Qiyunshan Scenic Area as an example: in 2021, it acquired 80% of the shares of Qiyunshan Tourism Co., Ltd. to operate ropeways, scenic traffic services, Hengjiang rafting and other products at Qiyunshan Scenic Area; in 2023, it incorporated Qiyunshan Resort, Huangshan Yungu Hotel, and Xiangyuan Tea Industry into listed companies to complement existing ropeways and scenic area transportation, further improving overall operational efficiency and providing visitors with a comprehensive service experience of “mountain tours and mountain vacations”; this year, it acquired free Qiyunshan Qiyunshan Home, tree house and other products, Qiyun Mountain vacation The district was upgraded to a comprehensive cultural tourism and leisure resort.

“Transforming leisure and vacation, our hotels are quite unique. For example, 'Free Family Treehouse World' is a unique treehouse independently innovated and independently developed by Xiangyuan. It integrates special treehouse accommodation, food and catering, and outdoor recreation, and is committed to building a one-stop innovative domestic family family vacation brand.” Wang Heng said, “We will prefer vacations, brands, deep cultural experience attributes, self-operated (hotels), and can also integrate some homestay resources in the surrounding area.”

“Xiangyuan Cultural Tourism now has five major destinations, with annual revenue ranging from 10 million to over 200 million. This is only a basic model brought by tourists, but in the future, as we carry out in-depth destination operations, we will launch specialty products and further enhance our services and brand effects, and there will be more room for growth.” This is Wang Heng's plan for the upcoming “Xiangyuan Travel” to fill the company's online links, form a closed loop of strategy, and promote consumption transformation for offline tourists.

Talk about the industry: China will generate consumption-oriented cultural tourism enterprises with global influence

The cultural tourism industry is a huge racetrack in China. The market size has reached the trillion level, and it has broad prospects for development. In recent years, as consumer demand for tourism and cultural consumption continues to escalate, people's requirements for culture, tourism, art, and entertainment are also getting higher and higher, which provides more business opportunities and development space for cultural tourism enterprises.

In recent years, both supply and demand have been strong in the cultural tourism consumer market, and the cultural tourism industry has become a rigid demand for people to live a better life. We firmly believe that with the upgrading of Chinese consumption and the spread of the concept of green consumption, people's demand for travel consumption is shifting towards high quality and diversification. The Chinese tourism market has huge consumer demand and room for development, which also brings greater opportunities for the development of tourism enterprises.

Wang Heng mentioned Disney, the benchmark for global cultural tourism companies, with a market value of over 1 trillion yuan. “I believe that in the future, China will also emerge to meet consumer demand upgrades, use original IP to tell Chinese stories well, have refined operation, quality content creation, and sustainable capital operation capabilities. The model will have both Chinese characteristics and cultural attributes, and the direction is the technology consumption scenario. I also hope that on the basis of specialization in segmented fields, Xiangyuan Cultural Tourism can gradually become a great cultural tourism enterprise by moving in the direction of having advantages such as benchmark products, innovative services, and international brand attributes.”

Under the new development pattern, it is particularly important to maintain strategic strength and fulfill the strategic mission and value orientation of the enterprise.

Talk about development: Using technology to promote the upgrading of the cultural tourism industry

Since last year, the recovery of the cultural tourism industry has accelerated, and listed companies have also benefited. According to the performance forecast, Xiangyuan Cultural Tourism expects to achieve net profit of 145 million yuan to 165 million yuan in 2023.

The scenic area business of Xiangyuan Cultural Tourism is improving its performance through tourist conversion improvement, product quality upgrading, and acceleration of secondary transformation. The projects already planned in 2024 include: the Qiyunshan Scenic Area lawn music festival, beer festival, and water parent-child project; upgrading the quality and upgrading of hotels and scenic facilities in the Bifengxia Scenic Area; follow-up promotion of the ancient city of Fenghuang as a national 5A tourist attraction; and further optimization and upgrading of the Bailong Ladder and Huanglong Cave projects combined with vacation products.

Currently, Xiangyuan Cultural Tourism is still building two core IPs. One is tea culture, and the other is travel experiences and products combined with giant panda culture. Wang Heng explained that because tea culture and giant panda culture are attractive “Chinese symbols,” there is an opportunity to go abroad and become an international cultural tourism brand.

Wang Heng told the Financial Federation reporter that the national policy currently supports the cultural tourism industry with unprecedented strength. Although the consumption structure has changed, the general direction of the tourism industry's transformation towards leisure and vacation will not change. “I am also particularly optimistic about the application of digital technology in cultural tourism scenarios. Whether it's the big model or the development of AIGC, it tells us that we must fully embrace digitalization to improve the travel service experience and service efficiency.”

He once again mentioned that after the establishment of “Xiangyuan Travel”, it will focus on digitally intelligent travel services to provide users with “reassuring, quality, intelligent and convenient” travel experiences and services. “The company is committed to making 'Xiangyuan Travel' a leading brand in the field of cultural tourism, leisure and vacation. He hopes that when consumers want to enjoy a perfect vacation experience, they will immediately think about taking a vacation and looking for 'Xiangyuan Travel'.”

Selected interview transcripts

Financial Association: The company's current tourism assets cover the “Daxiangxi” region, the “Dahuangshan” area, and the “Dacheng-Chongqing” area. From tourism resources to expanding the cultural tourism landscape, how is the company considering it?

Wang Heng: The multi-site tourism asset layout is one of the characteristics that distinguishes Xiangyuan Cultural Tourism from other cultural tourism companies. The connection of multiple attractions can provide visitors with richer travel experiences and travel choices.

When choosing a travel destination, visitors consider natural characteristics, and partial content, such as travel products and experiences, and interpretations of local culture, are key factors in whether visitors are willing to repurchase. We hope to use high-quality travel services to have a positive linkage effect among multiple attractions, increase customer stickiness, and enhance the “Xiangyuan Travel” brand building.

Financial News Agency: Based on the performance of the Spring Festival holiday, what is the company's forecast for travel demand for this year's holidays?

Wang Heng: Tourists' desire to travel is strong, and the travel radius of tourists is constantly expanding. I think the priority of travel consumption in the types of consumption choices that everyone can choose is constantly increasing. The frequency of travel consumption will increase. I am optimistic about holiday travel demand, and it may even set a new historical record. The unit price is affected by the impact of the overall domestic economic environment that has not yet clearly recovered, and it remains to be seen whether it can return to 2019 levels this year.

Financial Association: What are the company's explorations in terms of innovative cultural tourism integration projects and digital operations?

Wang Heng: On the one hand, the integration of cultural tourism technology can attract consumers and increase tourist traffic and tourist stickiness in scenic spots. On the other hand, the empowerment of technology and culture has increased the added value of tourism projects, which is conducive to increasing the unit price of visitors. For example, we created the first “Xiangjian Tuojiang River” immersive art cruise project in 2021, which uses Miao culture as the story line. This product promoted an increase in the number of night visitors. The ticket price for a night tour on the Tuojiang River cruise was about twice that of a day ticket, directly increasing the project's revenue.

Xiangyuan Cultural Tourism has been implementing some “digital cultural tourism” practices, mainly through three aspects: informatization of scenic spot systems, digitalization of scenic spot operations, and a “online+offline” one-stop digital intelligence service brand for consumer-oriented travel services. The company has already implemented corresponding practices in the first two areas. The newly established “Xiangyuan Travel” will form a closed loop for the company's business and strategy.