China’s symbol for tourism is taken from a famous Han Dynasty
sculpture of a galloping horse overtaking a flying sparrow.
The emblem, used by the China National Tourist Office, is a
design that represents strength and speed. And it is an apt
illustration for the rapid changes that are opening the country’s
Recognizing the economic potential of travel and tourism, China
has begun loosening its hold on the tourism market, allowing more
foreign investment in the industry and easing travel policies for
The moves have prompted a flurry of new projects by foreign
companies intent on tapping the country’s growing $62 billion
tourism market, and an emerging Chinese middle class that is now
taking to the road.
Top of The World
By 2020, the World Tourism Organization predicts China will
receive 130 million tourists, propelling it to the No. 1
destination in the world.
To cope with the influx, a new freeway network is being built to
crisscross the country. A high-speed railway system is planned to
reduce travel time between Shanghai and Beijing. And 50 airports
are to be built over the next five years for the domestic air
market, reaching some of the country’s most inaccessible areas,
including the Tibetan plateau.
“China is preparing for an onslaught of tourism,” said John
Koldowski, the managing director of the Strategic Intelligence
Center for the Pacific Asia Travel Association. “As with other
things in China, it happens very quickly and with numbers that
stagger the imagination.”
While China’s tourism industry took one of the biggest hits
during the SARS outbreak losing nearly 12 percent of its
international visitors and 42 percent of its U.S. visitors for the
first half of this year experts say the crisis actually helped
accelerate reforms in an effort to stimulate investment and
Winds of Change
In parts of the southern Guangdong province, Chinese citizens
can travel to Hong Kong without having to join a tour group.
Shanghai and Beijing residents also can travel independently to
The loosened travel restrictions have sent tourists flooding
into the city, forcing many overbooked mid-range hotels to turn
people away. After the travel restrictions were eased, Hong Kong
had 36,000 visitors from the Guangdong region alone in just the
first three days of July.
“Tourism has rebounded far more than anticipated or expected,”
said Lillibeth Bishop, a publicity manager for the Hong Kong
Tourism Board. “There has been talk about using vacant government
housing buildings or floating hotels to keep up with
And outbound travel from China prohibited until just a few years
ago is expected to be the next biggest growth segment in Asian
The World Tourism Organiza-tion predicts that, with the loosened
visa restrictions and increasing disposable income, more than 100
million Chinese will travel abroad by 2020, with increases of 12.8
percent each year.
Japan, the Philippines and Vietnam, in particular, have received
more visitors from China this year compared with 2002, according to
the Pacific Asia Travel Association. And Chinese travelers now are
the largest group of visitors to Thailand, according to the World
“In the short term, in the next half decade or so, we expect to
see increases in northeast Asia, Japan and Korea, and Southeast
Asia certainly; and the South Pacific will gain substantially,”
Kinks in The System
Still, China’s outbound tourism market faces challenges and has
been one of the slowest sectors to open to foreign investment.
In 2001, after joining the World Trade Organization, China made
its first commitment to loosening industry rules, making it easier
for foreign investment in travel agencies.
“The Chinese government, in many sectors, is going WTO-plus,”
said Chris McNally, a research fellow at the East-West Center, a
research center in Hawaii focused on the Asia Pacific region.
Still, foreign-owned agencies are limited to selling inbound
foreign travel and domestic Chinese travel, reflecting China’s
primary purpose of attracting foreign visitors and stimulating its
own domestic market. However, “it will bring more understanding of
the demands and the needs of foreign travelers,” said Yan Wang,
director of the China National Tourist Office in Los Angeles.
“Quality needs to be improved.”
Jalpak International Co., a subsidiary of Japan Airlines, was
the first foreign-owned travel agency approved by the Chinese
government. German-based TUI AG and Business Travel International,
a U.K. corporate travel firm, have announced majority-interest
partnerships with Chinese organizations in recent weeks.
Meanwhile, as China’s need for management expertise and improved
service has created more opportunities, companies that have had
business relationships in China for some years also are finding new
U.S. travel management firms American Express and Carlson
Wagonlit recently benefited from their partnerships with Chinese
organizations that regulate airline ticketing.
This summer, Carlson entered the hitherto tightly regulated
outbound ticketing market by starting a first-of-its-kind business
travel venture with China Air Services.
Last year, American Express was granted the first license for
domestic ticketing through a venture with the Civil Aviation
Administration of China and the International Air Transport
With more foreign businesses seeking to enter other sectors in
China, the U.S. travel management giants, with their Chinese
counterparts, have become well-positioned to benefit from the
burgeoning corporate travel both in and out of China.
Late last month, United Airlines and Air China signed a
code-sharing deal that marked the first time a large Chinese
airline agreed to extensive cooperation with a foreign carrier.
Marriott International Inc., Starwood Hotels and Resorts,
InterContinental Hotels Group and Shangri-La Asia Ltd. are
substantially increasing their luxury properties in China.
Marriott will open three new hotels in Shanghai this year, one
in Tianjing, one in Wuhan and a new resort on Hainan Island.
InterContinental Hotels wants to double the number of properties it
operates in China, to 80, by 2005. And Starwood intends to open 45
hotels over the next three years.
But amid the progress there is caution: Although SARS has been
contained, any new cases would almost certainly threaten the
“We try our best to prevent it,” said Grace Zhu, an assistant at
the China tourism office in Los Angeles. “Of course, there is worry
but we hope it will be fine.”