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The Chinese government is going to allow foreign-funded travel agencies to take part in China’s outbound travel market at the end of this year, which will dynamically alter the current market situation.
The fast economic development of China and increasing individual assets will lead Chinese outbound travel to become a large, promising and profitable market.
The National Tourism Administration of China (CNTA) said that the influx of foreign capital into China’s tourism market will be encouraged in order to promote the economy’s share in the “great power of tourism.” Various data and information sources report that the lucrative high-end tourism market is the new up and coming field in which many are hoping to partake.The question arises, however, of how Chinese domestic travel companies will deal with the new foreign competition.
Background – Foreign capital is allowed in
In the 10th World Travel and Tourism Roundtable Conference, Shao Qiwei, head of the CNTA, said that China planned to ease the participant standard of the tourism market. Foreign travel agencies will gradually be allowed to take part in the outbound travel market based on some experimental projects. The CNTA is still trying to work out the “Management of the Foreign Travel Agencies’ Engagement in Group Outbound Tours” to further specify the order of tourism market.
Shao Qiwei pointed out that China is also encouraging international capital to enter the manufacturing of tourism equipment, tourism media industry and tourism education. China has taken measures to level up the manufacturing of the special tourism equipment, like passenger ships, sightseeing helicopters, touring cars and so on. According to Shao, China’s ability of manufacturing these things are still “less developed” and needs “great improvement”.
Reading: High-end Tourism is catalyst to industrial upgrade
The status quo of China’s travel market sends out a global message about a group of people who have formerly been restricted from leisure travel abroad. In current times, this group of people, who have acquired a degree of wealth, have also experienced an improvement the loosening of governmental regulations for visiting traditional “places of interest” with options ranging from ordinary travel packages to the customized and individualized high-end tourism.
A source said that Shao’s words could be understood as the detailed measures of implementing the “Opinions of the State Council on Accelerating the Development of Tourism.” The development of tourism became a priority in the State Council’s agenda at the end of 2009. The Opinions document that was published last year stated the government’s will to foster tourism as a “strategic pillar industry” for China’s national economy. The ultimate goal is directed at elevating the quality and efficiency of the tourism industry to match global standards.
Ai Qihong, general manager of Guangdong China Travel Service Co., Ltd, predicted that customized travel will see its golden age in the coming future. The target population is the growing number of people who can afford the unique travel experiences. The entry of the foreign capital can encourage healthy competition and upgrade the entire management level of national tourism. Previously, the domestic travel agencies only focused on three sectors – inland travel, inbound travel and outbound travel; these traditional sectors have proven to be insufficient. China lags far behind the foreign countries in the tourism market segmentation and high-end tourism products. The traditional travel agencies need to spread their industry chains and change their operation patterns and support reforms that can offer more options to consumers.
Key: Supporting environment as a must
The latest statistic data showed that the inland travel and outbound travel in China went through dramatic increase in the past two years. In 2009, the volume of inland travel market reached 1.9 billion person-trips; the inbound travel market saw 50 million person-trips and the outbound travel market had 47.66 million person-trips. China has already become the largest tourism source of Asian countries. In the first quarter of this year, the inland travel person-trips saw an 8% like-for-like increase to 610 million. This increased the country’s income of 343 billion yuan (USD 50.23 billion) by 20%. In addition, these figures will be increasing in the future. According to the World Travel & Tourism Council’s estimation, the inland travel market volume in China will reach 2.8 billion person-trips in the next five years. The inbound travel market and outbound travel market will both exceed 100 million person-trips.
A source said that China’s tourism is undergoing the fastest growing pace in the world while global tourism has been increasing approximately 5% per year for the past ten years.. China’s growth is attributed to its growing GDP. Meanwhile, in some advanced places, like Guangdong, the GDP per capita is also an important driving factor for the blooming tourism. According to the data from the National Bureau of Statistics, the GDP per capita in Guangdong reached 40,748 yuan (USD 5,967.3) in 2009, showing that Guangdong, with its economic development standing ahead of the whole country, can take the lead in upgrading the tourism industry and exploring the high-end tourism market. The success depends on the construction of related support facilities.
Take the passenger line industry for example. To make a ship is not a problem. The GDP per capital in Guangdong also shows that peoplearebetter able to afford taking travels in luxury ships. However, the appeal both domestic and foreign capital, as well as enterprises depend on the government stipulations and regulations, including taxation. Meanwhile, the other factors, like the targeted customers, should be put into consideration as well. The consumption environment equipped with high-end travel facilities will be quite crucial for Guangdong’s tourism development.
Experts: Joint venture travel agency likely to take the lead
Dr. Liu Simin, contract researcher of the Chinese Academy of Social Sciences, said that the CNTA is busy working out the “Management of the Foreign Travel Agencies’ Engagement in Group Outbound Tours,” which will come out before the end of this year. This document aims at integrating the market resources and promoting the development of this business gradually and orderly.
China has previously allowed the foreign enterprises to get into China’s tourism market. However, their business scope was limited to inbound travel of foreign tourists and inland travel. Capitalizing on this opportunity, the foreign travel companies chose to cooperate with their Chinese peers and set up some joint venture travel agencies in China. With the outbound travel business open to the foreigners, these joint venture travel agencies, especially the established ones, can take the lead in organizing the outbound travel groups.
However, the foreign travel agencies in China may not be equipped with the advantages in outbound travel and inland travel. This could be inferred from the Chinese travel agencies’ development in the foreign countries – they set up numerous branches in foreign countries to attract more customers but in vain, forcing them to work with the local travel companies. Therefore, the cooperation with local partners is a good way for foreign travel companies to see development of their outbound travel businesses. This also brings about a lot of opportunities for the Chinese travel agencies. The well-established travel agencies can choose to cooperate with the famous and powerful foreign travel companies to develop their outbound travel agencies and, more importantly, to learn the advanced management experiences from their partners.
Guangdong-based Travel
Agencies: to prepare for a rainy day
What kinds of influence will be exerted upon the Chinese domestic travel agencies when the foreign agencies become engaged in outbound travel? According to Dr. Liu Simin, Guangdong, which is located close to Hong Kong, Macau and Taiwan, is easily influenced due to its geographical vicinity, cultural similarity and relative ease of information accessibility. The impact mainly comes from the travel agencies in Hong Kong, Macau and Taiwan. Previously, the foreign travel agencies, excluding these ones based in the three regions mentioned above, had difficulties in traveling deep into China due to the culture difference and unfamiliarity. However, such a problem fails to bother the travel agencies from Hong Kong, Macau and Taiwan. These travel agencies in Hong Kong, in particular, can get into Guangdong effortlessly and start their businesses there.
Dr. Liu Simin notes that the businesses of traveling in Taiwan, Hong Kong and Macau of the Chinese travel agencies will be the most influenced by the new policy. For the Chinese citizens, traveling in these places is easier and less costly than traveling to the foreign countries. Meanwhile, due to the specific national conditions of China, traveling in these places is also regarded as outbound travel (and also the investments from these places belong to the foreign investments). The geographical vicinity and the other advantageous factors mean that the travel agencies from these places can take the lead in entering the Chinese outbound travel market.
The fast economic development of China and increasing individual assets will lead Chinese outbound travel to become a large, promising and profitable market.
The National Tourism Administration of China (CNTA) said that the influx of foreign capital into China’s tourism market will be encouraged in order to promote the economy’s share in the “great power of tourism.” Various data and information sources report that the lucrative high-end tourism market is the new up and coming field in which many are hoping to partake.The question arises, however, of how Chinese domestic travel companies will deal with the new foreign competition.
Background – Foreign capital is allowed in
In the 10th World Travel and Tourism Roundtable Conference, Shao Qiwei, head of the CNTA, said that China planned to ease the participant standard of the tourism market. Foreign travel agencies will gradually be allowed to take part in the outbound travel market based on some experimental projects. The CNTA is still trying to work out the “Management of the Foreign Travel Agencies’ Engagement in Group Outbound Tours” to further specify the order of tourism market.
Shao Qiwei pointed out that China is also encouraging international capital to enter the manufacturing of tourism equipment, tourism media industry and tourism education. China has taken measures to level up the manufacturing of the special tourism equipment, like passenger ships, sightseeing helicopters, touring cars and so on. According to Shao, China’s ability of manufacturing these things are still “less developed” and needs “great improvement”.
Reading: High-end Tourism is catalyst to industrial upgrade
The status quo of China’s travel market sends out a global message about a group of people who have formerly been restricted from leisure travel abroad. In current times, this group of people, who have acquired a degree of wealth, have also experienced an improvement the loosening of governmental regulations for visiting traditional “places of interest” with options ranging from ordinary travel packages to the customized and individualized high-end tourism.
A source said that Shao’s words could be understood as the detailed measures of implementing the “Opinions of the State Council on Accelerating the Development of Tourism.” The development of tourism became a priority in the State Council’s agenda at the end of 2009. The Opinions document that was published last year stated the government’s will to foster tourism as a “strategic pillar industry” for China’s national economy. The ultimate goal is directed at elevating the quality and efficiency of the tourism industry to match global standards.
Ai Qihong, general manager of Guangdong China Travel Service Co., Ltd, predicted that customized travel will see its golden age in the coming future. The target population is the growing number of people who can afford the unique travel experiences. The entry of the foreign capital can encourage healthy competition and upgrade the entire management level of national tourism. Previously, the domestic travel agencies only focused on three sectors – inland travel, inbound travel and outbound travel; these traditional sectors have proven to be insufficient. China lags far behind the foreign countries in the tourism market segmentation and high-end tourism products. The traditional travel agencies need to spread their industry chains and change their operation patterns and support reforms that can offer more options to consumers.
Key: Supporting environment as a must
The latest statistic data showed that the inland travel and outbound travel in China went through dramatic increase in the past two years. In 2009, the volume of inland travel market reached 1.9 billion person-trips; the inbound travel market saw 50 million person-trips and the outbound travel market had 47.66 million person-trips. China has already become the largest tourism source of Asian countries. In the first quarter of this year, the inland travel person-trips saw an 8% like-for-like increase to 610 million. This increased the country’s income of 343 billion yuan (USD 50.23 billion) by 20%. In addition, these figures will be increasing in the future. According to the World Travel & Tourism Council’s estimation, the inland travel market volume in China will reach 2.8 billion person-trips in the next five years. The inbound travel market and outbound travel market will both exceed 100 million person-trips.
A source said that China’s tourism is undergoing the fastest growing pace in the world while global tourism has been increasing approximately 5% per year for the past ten years.. China’s growth is attributed to its growing GDP. Meanwhile, in some advanced places, like Guangdong, the GDP per capita is also an important driving factor for the blooming tourism. According to the data from the National Bureau of Statistics, the GDP per capita in Guangdong reached 40,748 yuan (USD 5,967.3) in 2009, showing that Guangdong, with its economic development standing ahead of the whole country, can take the lead in upgrading the tourism industry and exploring the high-end tourism market. The success depends on the construction of related support facilities.
Take the passenger line industry for example. To make a ship is not a problem. The GDP per capital in Guangdong also shows that peoplearebetter able to afford taking travels in luxury ships. However, the appeal both domestic and foreign capital, as well as enterprises depend on the government stipulations and regulations, including taxation. Meanwhile, the other factors, like the targeted customers, should be put into consideration as well. The consumption environment equipped with high-end travel facilities will be quite crucial for Guangdong’s tourism development.
Experts: Joint venture travel agency likely to take the lead
Dr. Liu Simin, contract researcher of the Chinese Academy of Social Sciences, said that the CNTA is busy working out the “Management of the Foreign Travel Agencies’ Engagement in Group Outbound Tours,” which will come out before the end of this year. This document aims at integrating the market resources and promoting the development of this business gradually and orderly.
China has previously allowed the foreign enterprises to get into China’s tourism market. However, their business scope was limited to inbound travel of foreign tourists and inland travel. Capitalizing on this opportunity, the foreign travel companies chose to cooperate with their Chinese peers and set up some joint venture travel agencies in China. With the outbound travel business open to the foreigners, these joint venture travel agencies, especially the established ones, can take the lead in organizing the outbound travel groups.
However, the foreign travel agencies in China may not be equipped with the advantages in outbound travel and inland travel. This could be inferred from the Chinese travel agencies’ development in the foreign countries – they set up numerous branches in foreign countries to attract more customers but in vain, forcing them to work with the local travel companies. Therefore, the cooperation with local partners is a good way for foreign travel companies to see development of their outbound travel businesses. This also brings about a lot of opportunities for the Chinese travel agencies. The well-established travel agencies can choose to cooperate with the famous and powerful foreign travel companies to develop their outbound travel agencies and, more importantly, to learn the advanced management experiences from their partners.
Guangdong-based Travel
Agencies: to prepare for a rainy day
What kinds of influence will be exerted upon the Chinese domestic travel agencies when the foreign agencies become engaged in outbound travel? According to Dr. Liu Simin, Guangdong, which is located close to Hong Kong, Macau and Taiwan, is easily influenced due to its geographical vicinity, cultural similarity and relative ease of information accessibility. The impact mainly comes from the travel agencies in Hong Kong, Macau and Taiwan. Previously, the foreign travel agencies, excluding these ones based in the three regions mentioned above, had difficulties in traveling deep into China due to the culture difference and unfamiliarity. However, such a problem fails to bother the travel agencies from Hong Kong, Macau and Taiwan. These travel agencies in Hong Kong, in particular, can get into Guangdong effortlessly and start their businesses there.
Dr. Liu Simin notes that the businesses of traveling in Taiwan, Hong Kong and Macau of the Chinese travel agencies will be the most influenced by the new policy. For the Chinese citizens, traveling in these places is easier and less costly than traveling to the foreign countries. Meanwhile, due to the specific national conditions of China, traveling in these places is also regarded as outbound travel (and also the investments from these places belong to the foreign investments). The geographical vicinity and the other advantageous factors mean that the travel agencies from these places can take the lead in entering the Chinese outbound travel market.