[photopress:tourists_01.jpg,full,alignright]At the moment it is not easy for a foreign operator to sell on the China market. This may change somewhat. A China National Tourism Administration (CNTA) official has said foreign tour agencies will be treated on par with domestic counterparts when it comes to registered capital.
Currently, they are required to have a minimum of RMB2.5 million ($328,000) in registered capital, compared to RMB300,000 yuan for domestic tours and RMB1.5 million ($197,000) for outbound and inbound tours for Chinese counterparts.
The CNTA now also allows foreign-funded travel agencies to set up subsidiaries in China. This is ahead of the November 11 deadline set by the World Trade Organization (WTO ).
However, there will still be some restrictions. There are probably around 29 solely-funded or joint-venture foreign tour operators. But, and this is the important bit, foreign tour agencies cannot handle outbound business. Inbound and domestic travel only. And that is not where the money is.
A CNTA official said outbound tourism — the most lucrative part of the market — will remain closed to foreign tour agencies for now, because ‘it is not part of China’s promise to the WTO’.
The World Tourism Organization estimates China will become the world’s fourth-largest source of outbound tourists by 2015.
An industry insider said, ‘It is the potential of the outbound market that has attracted so many foreign operators in the first place. We are looking forward to the day when the outbound market opens.’
One positive signal is that the CNTA recently allowed Hong Kong and Macao-funded tour agencies to cater to mainland tourists in eight provinces and regions bound for the two special administrative regions.
Takashi Ota, president of the splendidly named Kinki Nippon Tourist, Japan’s second-largest tourism company, suggested the CNTA consider allowing collaboration between foreign and Chinese tour operators in the outbound market as a start.
Large domestic agencies are simply not interested. They have said, understandably, they prefer current policies that bar access to the outbound market for foreign firms. Whether the WTO will force through such a change is open to debate because there is a large amount of other, more pressing, subjects.
Source: China View