China's tourism experience has changed dramatically in the last few decades —for the better
by Chase Poffenberger and David Parry, China Business Review
The January issue of China Business Review, the official magazine of the US-China Business Council, noticed the travel heat of China. Here are some excerpts. For full text, please click here.
Beginning with a trickle of intrepid pathfinders in the late 1970s, foreign tourists have been making China a "must-see" destination in rapidly increasing numbers. In 1979, China hosted only 5.7 million foreign visitors, nearly all of whom were from Hong Kong, Macao, and Taiwan. By 2005, China received 120.3 million foreign visitors, more than 80 percent of whom were from Hong Kong, Macao, and Taiwan. Like the rest of its economy, China's tourism sector has changed dramatically in the last 20 years.
According to the World Travel and Tourism Council's April 2006 report on China, the country's travel and tourism industry generated $353.7 billion in 2006 and is expected to grow to $1.3 trillion in 2016, or roughly 8.7 percent per year on average. In 2006, foreign visitors were expected to spend $75.1 billion and account for 7.4 percent of China's total exports. The travel and tourism industry was expected to account for 2.9 percent of China's total GDP directly (13.7 percent when indirect effects are included). Tourism provides 17.4 million jobs in China, or 2.3 percent of total employment in 2006, and is forecast to support 20.4 million jobs, or 2.5 percent of the total, by 2016. In total, 10.2 percent of all jobs, or 77.6 million, in China depended on travel and tourism in 2006.
Most tourists to China still go on a package tour. The most common itineraries visit Beijing; Guilin, Guangxi; Shanghai; Xi'an, Shaanxi; and the Yangzi River over 12-14 days. Tourists are rushing to see the Three Gorges area before the reservoir created by the Three Gorges Dam floods it completely. With a new fleet of luxury river vessels available, the Yangzi River has become a centerpiece of many mainstream itineraries. Hotels for these tours tend to be joint ventures and range from three to five stars.
New demand for luxury
The US Baby Boomer generation is far more sophisticated and educated than its predecessors, and the same characteristics are true of boomers in other Western countries. These characteristics, combined with the trend among mid-market consumers in the United States to selectively purchase luxury goods and experiences that used to be reserved for the wealthy, are creating a broader market of travel buyers who are willing to pay a premium for an upscale travel experience to China. (Luxury tours often start at $500 per day. These tours also last about 14 days on average.)
Better service
Chinese tourists with increasing amounts of disposable income have helped raise China's service levels dramatically in a relatively short time. In many cases, Chinese tourists spend more per capita than Hong Kong tourists in China, although Hong Kong tourists still have higher incomes.
Another welcome change stemming from China's focus on the economy is the increased openness of the guides. For the most part, tourists are no longer subject to a closely scripted delivery of information, and many foreigners unfamiliar with China are surprised when their local and national guides speak their mind. The approach of local guides tends to fall along generational lines. Older guides who remember the Cultural Revolution often share stories of survival and tend to view Chinese history since the 1970s as positive, in contrast to the hardships they endured earlier. On the other hand, guides who are too young to remember the Cultural Revolution tend to be more critical of China.
