In late autumn, at the foot of the Great Wall, the China-US Tourism Summit Forum was officially held.
This time, more than thirty related companies from both sides participated in the forum.
The media from both sides paid special attention to the forum because it was the first China-US tourism forum organized by the public.
As the host of the forum, Li Mu announced the new business of "Where to Taobao" to the people in charge of the two sides.
"Where to Go" would become a new second-tier section under Taobao and have a domain name.
In this section, Taobao would provide first-tier cities in Hua Xia with air tickets to and from major cities in California. It would also provide hotel reservations in first-tier cities in Hua Xia and all over California. It would also provide other travel-related resources and services to tourists in both places.
"Where to Go" was a travel product created by Li Mu. However, he was not prepared to spend a lot of money to promote it. Instead, he wanted to grab the tourism resources in his hands.
Ctrip's business model was to be an intermediary and integrator in the tourism industry. However, its resources were not exclusive. The hotels that users could book from Ctrip could also be booked from Go Anywhere, Flying Pig, and other products. Moreover, there was basically no difference in the prices.
Li Mu felt that the poor had their own ways of playing, and the rich had their own ways of playing. The poor way of playing was the same as Ctrip. The rich way of playing was to simply spend money to buy resources and integrate them.
Therefore, Li Mu brought Makino Technology and the person-in-charge of Taobao to the Summit Forum. He got Makino Technology to discuss the purchase of resources and got Taobao to discuss the specific cooperation model and requirements.
For example, from December onwards, Li Mu requested that 10% of the round-trip tickets between first-tier cities in Hua Xia and California be sold to Makino Technology at a 20% discount. After that, it would increase by 5% every month to a maximum of 30% of the total number of tickets.
The reason why he wanted to take 10% first and increase it by 5% every month was because he wanted to give the overseas travel business a starting stage. It would be more scientific to increase it step by step.
Take China Airlines for example. Most of their flights from Beijing to San Francisco and Los Angeles were filled to the brim. If it was the off-season for overseas students, the occupancy rate would not even reach 40%. Only during Chinese New Year, Christmas, and the summer vacation would the occupancy rate reach more than 80%.
For such a flight, Li Mu asked Makino Technology to directly spend money at a 20% discount in the normal market price and hold 10% of the tickets in his own hands. Makino Technology would then authorize Taobao to sell these tickets. Makino Technology would be responsible for the profits and losses of these tickets. Even if none of the tickets were sold, he would bear the cost himself.
For China Airlines, even with a 20% discount, they would not lose money most of the time. This was because most of the time, the remaining seats on the flight were far more than 10%. In this case, Makino Technology spent money to buy 10% of the seats, which was a great help to them.
The only loss was the limited peak period every year. During the busiest few days, the plane would even be overbooked. The entire flight would sell 320 out of 300 seats. In this case, there was basically no discount for the tickets. As a result, they still had to give the 20% discount to Makino Technology. Naturally, they lost 20% of the ticket price.
However, the airlines were not fools. They measured the demand during the peak season and the off-season each year, and naturally calculated that even if they lost some money during the peak season, it was still more cost-effective to sell 10% of their shares to Muye Technology, so they had no reason to refuse.
The representative of China Airlines said to Li Mu, "Li Zong, we have no objections to the other conditions you proposed. However, you requested an increase of 5% every month until 50%. We want to know, after reaching 30%, what are you going to do?"
For a route where the occupancy rate would not exceed 50% in most cases, Li Mu was willing to take 30% of the seats. For the airline, it was simply a dream come true. However, they did not quite understand why Li Mu wanted to set a 30% upper limit.
Li Mu said, "If 30% of the seats on your route are bought out by Makino Technology, then I suggest that you try to open more flights. Makino Technology will directly take 40% of the tickets for the additional flights!"
In Li Mu's view, he was not doing charity for the airline. If 30% of the tickets were bought out, the airline would naturally be happy. However, there was still a gap of 2-30% from their full capacity. For them, what they hoped the most was for Makino Technology to directly take 50% or even 60% of the tickets. That way, their route could be close to full capacity all year round.
Therefore, for their current route and flights, Li Mu would only take 30% of the tickets. If they wanted to take more, fine, you could open new flights. As long as the new flights are opened, I will directly take 40%.
This 40% was the minimum amount to encourage the airline to open new flights. Only by encouraging and inducing the airline to open more flights could the interaction between the two countries become closer.
The representative of China Airlines immediately understood Li Mu's intentions. He smiled bitterly and said, "Li Zong, in this way, you've just pulled us out of the fire pit, and now you're luring us to dig a new pit to jump into!"
Li Mu smiled and said, "You have to grasp the big picture. The national economy is developing better and better, and the people are getting richer and richer. In the future, there will be more and more people traveling abroad. It's not necessarily a bad thing to plan ahead. Even if you lose a little money, it's not a big deal."
On the side, the representative of American Airlines asked, "Li Zong, I have a question. If you can't sell off the tickets you bought, will you allow us to reopen the sale before the departure date?"
Li Mu thought about it, then nodded and said, "That's not a problem. If the resources in my hands are really idle, you can reopen the sale of the remaining seats within 48 hours before the departure date. I will still pay you the minimum amount that I should pay. The revenue from the sale, we will split fifty-five. This way, you can earn more, and I can reduce my losses."
If the price of a ticket was 5,000 yuan, Li Mu would buy it from the airline at 4,000 yuan. However, if it was not sold before the departure date, then it would be a pure waste. The airline could earn 4,000 yuan from him. Instead of that, it would be better to unlock the tickets and sell them to the airline before the departure date. That way, if they sold it at 4,000 yuan, with a fifty-five split, Li Mu would get 2,000 yuan back, and the airline would earn 6,000 yuan.
Whether it was Hua Xia Airlines or American Airlines, they were very satisfied with the terms. For them, this guaranteed their interests to the greatest extent, and there was no reason to refuse.
After negotiating with the airline, it was time to communicate with the hotel groups of the two places.
In terms of the hotel, Li Mu also proposed a discount of 20%. Starting from next month, he would directly take 10% of the room resources from the two hotel groups. In the future, it would also increase by 5% every month, up to a maximum of 50%.
There was no problem with this, and all the hotels agreed to this proposal.
Air tickets and hotels were relatively simple. The most troublesome thing was to integrate the various resources of the two travel companies.
This included, but was not limited to, tour guide resources, ground connection resources, and various supporting services resources.
Li Mu's idea was that in the future, Taobao would mainly sell its own bilateral group tours. For example, to Californian users, he would sell group tours from Los Angeles to Yanjing, and then to Hua Xia users, he would sell group tours from Los Angeles to Los Angeles.
In the past, travel companies, especially travel agencies, would integrate their own air tickets, hotels, and other resources to come up with a plan for the users. Then, when there were enough people, they would send the tour from the local area.
The tour would be led by the local tour guides, and when they arrived at the local area, the local ground connection company would take over the tour, which would be in charge of the various local affairs of the tour group. Then, the travel agency would settle the bill with the local travel agency.
For example, a travel agency in Yanjing brought a hundred people to Los Angeles. When the tour group set off, there were only two tour guides, and these 100 people's accommodation, food, entertainment, and cars were all provided by the local travel agency or travel company.
Most of the tour groups would send the people to the destination, and after connecting with the local partners, they would generally not care about them anymore. Many domestic low-cost tour groups would even directly sell the tourists by the number of people. For example, a travel agency organized a hundred people to Spring City, and they were all low-cost tour groups. They directly found a cheap airline to send the people there, and then sold the 100 people to the local illegal tour groups. The local tour groups would spend money to buy the people, and then bring them everywhere to shop, scam them, and even force them to buy and sell them.
Now, with Taobao in the middle, of course, Li Mu would not allow anything that would harm his customers to happen.
Therefore, Li Mu's request to the two travel agencies was that, first, all the resources must be quoted at a price lower than when they worked with other travel agencies in the industry.
This was because, in Li Mu's eyes, these travel agencies could only be considered small wholesalers in the past, and he would become the largest wholesaler in the travel industry.
Usually, when they worked with some travel agencies, they would send a few tour groups a year, and the total number of customers would only add up to a few hundred. But if they worked with Li Mu, in the future, the customers from Taobao to them could reach tens of thousands. This was the strength of the platform. Therefore, any company that worked with the platform had to listen to the platform's request, and not dare to act recklessly.
This was very similar to the Apple App Store in the future.
Almost every app developer would take the initiative to send their own app to the App Store.
But the Apple App Store was very ruthless.
As long as there was a user spending, it would deduct 30% of the developer's income. Moreover, it had a lot of restrictions. If there was a slight violation of the rules, it would be punished or even removed from the store.
But even though Apple was so domineering, no app developer took the initiative to remove the app from the Apple App Store.
That was because they wanted to follow behind the platform to make money. No matter what the platform requested, they had to do it.
Other than giving a lower price, more importantly, Li Mu had to take on the role of organizing the tour groups himself. At the same time, he had to arrange for the tour guides and the necessary service personnel.
The destination travel agency had to provide the required services for the self-run tour groups of Taobao to the quality and quantity according to the requirements of Taobao to the customers. Moreover, they had to serve them well and not neglect them. That was because only when the customers were satisfied could they settle the income from Taobao to the App Store. If the customers complained, Taobao to the App Store had the right to deduct part of the fees and even punish them!
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