Future shock

China’s travel and tourism industry’s prospects are undoubtedly amongst the most promising in the world. According to the World Travel and Tourism Council’s (WTTC) annual league tables, which rank the fastest growing and the highest performing countries around the world, China figures in the top four each year. From the pattern established over the past few years, it would seem that China‘s high ranking is here to stay.

In the WTTC’s projections for China’s travel and tourism industry in the decade to come, travel and tourism demand was forecast to grow at 14% in 2006 and by 8.7% per annum, in real terms, between 2007 and 2016.

Total demand for China’s travel and tourism products in 2007 represents 6.2% of world market share. This several year-long robust and sustained growth curve indicates little need to doubt China’s growth prospects.  

However, China now finds itself in a position where current decisions will have significant and far-reaching effects on its travel and tourism.

We presented a second edition of our report, China, Hong Kong and Macau: The Impact on Jobs and the Economy to the Chinese government last April, with the backing of a 40-strong steering committee, mostly comprised of WTTC global members who have an interest in China.

Taking into consideration the vast growth and potential waiting to be tapped, a revised series of policy recommendations were put forward to help optimize the opportunities that lie ahead.

In brief, the report outlined the following areas for attention:

The three Golden Weeks (week-long national holidays) currently skew the demand for travel and tourism in China. The introduction of two weeks in additional paid vacation would help spread demand over the working year, providing a more stable year-long industry.

Budget hotels

The budget hotel sector at the moment is underdeveloped. This could be stifling the growth of domestic tourism. The separation of hotel management and ownership would be a step towards making the sector more efficient.

The skies should be opened and certain barriers to growth need to be addressed. This includes the limited capacity of air traffic control and the relative lack of Chinese pilots. As has been happening, easing restrictions on low fares is important to encourage price competitiveness and to make travel and tourism affordable for more segments of the population.

The creation of a time-share sector is currently hampered by a regulatory framework that’s insufficiently rigorous. Establishing such a framework would protect the consumer and help the industry flourish.

The English-language abilities of China’s travel and tourism personnel should be improved. To enable this, English-language courses should be made compulsory for all new hires in the travel and tourism industry.

Access to capital resources and capital investment opportunities should be improved to bolster investor confidence. International companies often encounter problems regarding the repatriation of revenue and this should be countered with appropriate legislation.

Environmental concerns

In tune with current concerns regarding climate change and preserving our planet and its natural resources, WTTC sees it as a priority that the principles of ecological preservation as outlined in Agenda 21 and developed for the travel and tourism industry after the 1992 Rio Earth Summit by WTTC, the United Nations World Tourism Organization and the Earth Council be adopted.

WTTC advocates responsibility in natural, social and cultural environments by establishing clear procedures and guidelines that preserve the destination and to be a good ambassador for the industry.

Overall, China finds itself in a stage of its development which is well aligned with the theme of the WTTC annual summit this year, which is due to take place in Lisbon, Portugal in May.

The summit’s theme is “Breaking Barriers, Managing Growth” and its aim is to engage world leaders in the industry, across both the public and private sectors and the media in a debate on how to tackle these challenges. Issues like balancing security and passenger flow, investment and infrastructure, and human capital and planning are all pertinent to the discussion.

To download a full copy of the WTTC 2006 China, Hong Kong and Macau report please go to www.wttc.travel. Projections for 2007 were published March 8; they reveal a continued and augmented growth curve over the next 10 years.