With rising amounts of disposable income and more time off from work, Chinese people are clogging the railways, roadways, and airports like never before, and in a relatively short time, this has become one of the largest tourism markets in the world.
For many years, what little time that counted as holiday was spent catching a precious few quality days with family – for millions of workers, the annual journey home was as close as it came to a vacation. But now the concept of leisure travel has taken hold and, as incomes continue to rise and travel restrictions ease, more and more Chinese travelers are able to venture overseas for their holidays.
Between 1999 and 2004, for example, the number of Chinese traveling overseas more than doubled from 9.23m to 23m, according to figures from the China National Tourism Administration (CNTA).The World Tourism Organization (the other WTO) has forecast China's domestic travel market will be the world's biggest by the end of the decade.
At the same time, China is becoming such a major business and leisure destination in its own right that by 2020 – boosted by such events as the Beijing Olympics and the Shanghai World Expo – it is expected to become the most visited country on the planet. By then, China is forecast to be playing host to around 180 million overseas visitors annually. In 2004 China welcomed 109m tourists and expects 112m in 2005.
Overall, China is currently estimated to be a US$60-70bn annual tourism business with big growth forecasted for the years ahead.
Across the country, gleaming new airports are going up, new rail lines are being laid, and new highways are being paved. China's hotel scene has also seen furious activity with new hotels under construction in almost all the major cities. In some cities, an eagerness for prestige has led to an over-supply of trophy-style, five-star hotels, resulting in bargain prices for travelers (and squeezed profits for operators).
In the big economic centers such as Shanghai, Beijing, Guangzhou and Shenzhen, the appetite for hotels shows little sign of abating. Beijing's Olympic Committee, for example, plans to more than double the city's portfolio of 392 star-rated hotels in time for the 2008 Games. Shanghai also plans to double its tally of 342 hotels in time for the opening of the 2010 World Expo.
Domestic travel has been given a boost in recent years with the introduction of the so-called "Golden Weeks,? three week-long national holidays at Chinese New Year, May Day and National Day, first introduced in the wake of the 1997 Asian financial crisis as a means of encouraging consumer spending. In the National Holiday week of May 2005, for example, Chinese tourists spent US$5.6 billion on travel and related expenses, up 20% year-on-year state media reported.
With the recent growth in the number of destinations with ?approved destination status' (ADS), countries and regions that ordinary Chinese are permitted to travel to for leisure, overseas tourism industries have started to realize the impact a flood of Chinese tourists could have on their market. Cities like Shanghai are festooned with billboards promoting tourism from Europe to Singapore. Australia, for example, hopes to quadruple the number of Chinese tourists it receives to almost 1m a year within 10 years. It foresees an annual tourist income from Chinese visitors of US$4.5bn by 2014.
Another recent development that has international tourist destinations seeing dollar signs is the relaxation of some regulations limiting the conversion from RMB into foreign currencies. For example, a Chinese person who plans to spend six months abroad used to be limited to US$5,000, but now can exchange the equivalent of US$8,000.
A more unique niche tourist market that has evolved in China recently under the nurturing of the government is so-called ?red tourism.' Red tourism is designed to develop interest in Chinese communist history by encouraging trips to locations of significance in the rise of the Chinese Communist Party to power. The government hopes that red tourism will also boost the economies of the generally poor locations.
From the bookings and travel agency perspective, China's travel market is highly fragmented with 11,522 travel agencies registered across the country. Of those 1,349 are capable of planning and booking international vacations.
Since July 2003, the government has allowed the establishment of wholly foreign-owned travel agencies – a reform made a full four years ahead of China's World Trade Organization obligations. To date, however, few investors other than a small number of Japanese agencies have taken up the opportunity.
One of the fastest growing sectors within the industry, however, is online booking, with companies such as Ctrip.com and eLong offering a range of services from flights to hotel bookings and car hire over the Internet. Such companies are rapidly coming to challenge the traditional high-street travel agent. NASDAQ-listed Ctrip currently offers part of its online service in English and has plans to extend that side of its service to cover flight bookings in the near future.
As for the travel infrastructure itself: to date, China's domestic transport services – the railway, inter-city bus services and airlines – have been overwhelmingly state-owned.
Boeing and Airbus, the world's civil aviation giants, have both forecast that China will become the world's second largest buyer of commercial aircraft (after the United States), spending more than US$197bn on around 2,400 new planes by 2020.
For those travelers hoping to scrimp on airfare, 2005 saw the arrival of China's first low-cost airlines. More significantly, Spring International and Okay Airways are the first privately operated airlines in China. Most Chinese travelers will have to wait a while for low-fare air travel to become available, however; Spring International started with only one route from Shanghai to Yantai in Shandong, and Okay Airways began only a route from Tianjin to Kunming via Changsha. Due to the limited reach of these airlines, the main state-run airlines are currently not concerned about losing market share.