Boeing Frontiers
November 2003
Volume 02, Issue 07
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Industry Wrap

China banking on tourism boost, despite SARS fallout

The tourism industry in China is set for rapid growth in the coming years, despite lingering fallout from the SARS epidemic earlier this year, according to a report released last month.

According to The New York Times, the World Travel and Tourism Council report predicts the number of tourists and business travelers visiting China will grow 22 percent a year from 2004 through 2013, with the flow of Chinese tourists and travelers going abroad growing even faster. Council representatives and travel industry executives warned, however, that China must overhaul its tourism administration and accept more foreign involvement if it is to manage the expansion.

"China has the potential to become one of the world's greatest tourism economies, but the scope of effort needed is staggering," said Council President Jean-Claude Baumgarten.

The Council issued the report a few days after the end of China's weeklong National Day holiday, which saw a resurgence in domestic Chinese tourism after the SARS epidemic forced the cancellation of travel during the May Day holiday and halted most long-distance travel.

"It was the most dramatic shutdown of tourism we've ever seen anywhere in the world in recent history," Richard Miller, the vice president for research and economics at the council, said of SARS. The council report estimated SARS reduced growth by the tourism and travel sector by 25 percent, costing it $7.6 billion and 28 million jobs. And using techniques to quantify the overall economic contribution of tourism and travel, Miller estimated SARS-inflicted damage cost the entire Chinese economy $20 billion.

Industry analysts said, however, China's domestic tourism and business travel sectors revived faster than many had predicted. David Yates, president of 4oceans, a British company that provides booking for Chinese hotels and travel agents, noted that non-Chinese business travelers began returning to the country soon after the government ended travel restrictions in June. Tourists are returning now, too, though more warily and in fewer numbers than before.

Many industry analysts expect the sharp growth in the number of Chinese traveling abroad for pleasure or business will more than cancel out fallout from SARS. "Over the last few years, outbound spending by Chinese tourists has exploded," Miller said. "There are very few countries growing faster than China."

In recent years the Chinese government has eased restrictions on Chinese tourists traveling to selected countries, including Thailand, Australia and Germany, according to The New York Times article. Last year, Chinese people made almost 16 million trips abroad. Miller expects similar growth over the next decade, pushing China into the top ranks of international travelers.


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