Discuss about the Travel and Tourism Sector in China for Development Trends.
The travel and tourism industry has emerged to be one of the critical sectors in the Chinese economy. With the overproduction of the manufactured goods and in line with the low demand for the same products, the service industry had to intervene to bridge this gap. One of the service industry that rose was the travel and tourism sector. This paper analyzes the development trends in the travel and tourism sector. It continues to analyze the future business potential of the same industry.
China is the most populous country in the world with over 1.4 billion people. Besides that, it is haphazardly becoming one of the largest markets for international tourism. A closer study to the economic situation in China attributes the development of China’s domestic tourism to three factors. These factors include structural adjustment of the country’s economy, the increment of leisure activities especially in the China cities and the increase in per capita income. There was a steady growth of China’s economy in the 1990’s. According to statistics, the GDP per capita increased from US$400 in 1990 to US$700 in 1996. This trend resulted in an increase in income to the citizens living in the urban areas stipulating mass tourism in the country (Koldowski & Yoo, 2006). The saving rate has steadily increased at a given rate of approximately 30% since 1999. This has seen the continuous increase in the GDP per capita income to the people living in the urban areas and consequently growing of the tourism sector. This trend has been boosted by the successful handling of the regional financial crisis that arises in Southeast Asia. This has seen the steady growth of the GDP per capita income which has continued to increase the amount of disposable income in the pockets of citizens. The results can be traced to the growth of domestic tourism in the country. To reaffirm this trend, statistics have pointed travel as one of the three major consumption hotspots on a Par together with real estates and cars.
The Chinese government introduced a five-day week system and a new national holiday system in 1995 and 1999 respectively. This enabled the Chinese citizen and especially those in urban areas to get much more free time. The seven- day spring festival holiday, international labour day, the two-day weekend, the national day and some other short time holidays sum up to one-third of the whole year (Koldowski & Yoo, 2006). This means that the Chinese people have at least four months in a year set for a free time which can be utilized for leisure. This has greatly contributed to the growth of travel and tourism sector in the country. Most of the Chinese people utilize this free time by traveling to various destinations on a family tour, picnics, groups tour and so on. During those holidays and weekends, one will find many Chinese are on the road traveling, and an impact of the same is felt in the tourist destination sites which are characterized by an influx in the number of visitors. The number of visitors to the various hotels and hospitality facilities increases during the weekends and holiday times.
The third major trend is the unbalanced Chinese economic structure. The unbalanced nature of the economic structure in China has called for a greater need for adjustment. The economy was flooded with manufactured goods as a result of overproduction. This was also occasioned by the deficiency of domestic demand for the manufactured goods. An adjustment had to be made so that the imbalance had to be fixed (Du, 2014). This gave rise to the growth of a service sector. Travel and tourism is an integral part of the service sector are entering a new period of development as the century continues to turn. The overproduced manufactured goods have been partially assimilated by this service industry. This has been marked as one of the adjustment need which has been adopted to curb the imbalance in the Chinese economic structure.
Chinese domestic tourism emerged as one of the growth points to other sectors in the country. Besides making a positive contribution to the promotion of regional economic growth, it has greatly contributed to the promotion of local economic structures (Highbeam.com, 2017). Additionally, it is through the travel and tourism sector that other economic sectors have been developed. It has been the driving point of related industries. This has positively enhanced the employment activities together with activating the much-needed domestic demand. It is through the diverse aspect of Chinese tourism that has attracted various authors whose research majorly focusses on market segmentation and the existing relationship between distance decay and resource areas with reference to the unlimited growth in domestic tourism.
When one shifts focus to external tourism in China, it is critical to note that in 2014 only about 5% of the population had a travel passport. This indicates that there is an immense potential for Chinese to travel abroad. Over the last decade, there has been an increase in foreign travels which was influenced by speedy urbanizations, eased restrictions on foreign travel by the government through the various policies and the increase in disposable incomes as a result of increased GDP per capita (Downey, 2003). Apart from the foreign travels, the Chinese tourism is thriving at a considerate rate. The UNWTO data ranked China at number four globally with reference to the number of international arrivals who visited the country. In 2014 alone, China recorded a whopping 55 million international travelers. This shows that the tourism sector is growing at very high momentum.
In the contemporary statistics, China is marked to generate over 13% of the global tourism receipts. This has a significant positive impact on many other destinations around the globe with a special focus on the Asia Pacific destination. This calls for the Chinese travel and tourism industry leaders to comprehend the rising needs of the Chinese travelers. Similarly, they have to create an enabling environment for the world so that other countries may be ready to receive them. Going by the report published by Oxford Economics and InterContinental Hotels Group (IHG), it is estimated that by the year 2023, the global annual arrivals from China will total to approximately 97 million.
The rapid world economic growth is set to see more than 400 million people entering the middle class. Many of these new entrants are predicted to originate from the Asia Pacific region. Considering that tourism is a key focal point in driving the economic growth and creation of employment opportunities, there exists a strong incentive to attract the new entrants to the middle class in other countries. In the global ranking, Chinese travelers are ranked among the top spenders on both per trip parameter and on the number of nights parameter. This means that there is a universal believe and expect that the position of Chinese households regarding classes is directly proportional to their spending. Thus, as the Chinese households move from low class to middle and upper class, the demand for long-haul leisure trips and luxurious accommodation and shopping increases (Fu, Cai & Lehto, 2015). According to reports and statistics by IHG, the primary destinations for Chinese travelers remain to be major cities. A survey conducted by IHG indicates that 85% of Chinese travelers chose cities as their destination of choice.
Considering the booming outboard travel in China, the travel and tourism industry possesses potential in transforming into a competitive destination. Looking at the 2015 report compiled by the travel and tourism competitiveness, it can be revealed that China was ranked at position six on Asia Pacific regional level and position 17 at a global scale. Since China is rich in cultural resources where it is ranked 4th globally and also rich in natural resources with a worldwide rank of position 3 in world heritage of natural sites, the country has a massive strength to expand and grow its tourism sector (Schröder & Widmann, 2007). China is considered as one of the rapidly growing economies where is believed to be the world’s economic superpower competing closely with major economies like the USA.
China is emerging as the worlds powerful economy. Its has initiated mega infrastructural structures while others are contained in the country’s blueprints. Her continued investments in infrastructure will attract more visitors including investors into the country. Tourists will flock to the country to view the skyrocketed skyscrapers and other mega infrastructures. One of the major strength to the growth of the tourism sector in China is the implementation of the planned improvements in air infrastructure which had a global rank at position twenty-five in the 2015 report (Wang, 2016). To position the country in the global competitiveness as far as travel and tourism sector is concerned, the government should focus more on developing policies which creates an enabling environment to do business. The Chinese government should consider increasing the international openness more so by relooking at the travel restrictions. The government should ensure that there is ease of travel so as to attract visitors and also reduce the turn around time while processing passports and visas.
Recent research has pointed out that simplifying access to travel for a Chinese traveler increases the influx of arrivals by an estimated value of 20%. It is therefore important for the travel and tourism industry leaders and all the stakeholders concerned to consider simplifying the access policies (Vogel, 2016). This would include relooking at the demanding visa application and processing procedures.
In conclusion, it is notable that the developing trends in China’s travel and tourism industry are influenced by four major factors including an adjustment in the country’s economy, availability of more leisure time, changes in government policies to support the industry, and the existence of unbalanced economic structure. However, the future of the industry is enshrined in its potential to realign with international industry changes. The sector will thrive with the utilization and implementation of the planned infrastructural projects. The travel barriers characterized by complicated travel requirements and procedures need to be relooked.
References
Downey, K., (2003), Report Details Travel, Tourism Industry Woes; SARS Is Adding to Post- 9/11 Slump. The Washington Post. Available at: https://www.highbeam.com/doc/1P2-264049.html?refid=easy_hf [Accessed July 1, 2018].
Du, J., (2014), Travel facilitation, tourism, and growth. OECD Tourism Trends and Policies 2014 OECD Tourism Trends and Policies, pp.47–70.
Fu, X., Cai, L. & Lehto, X., (2015), A Confucian Analysis of Chinese Tourists’ Motivations. Journal of Travel & Tourism Marketing, 32(3), pp.180–198.
Highbeam.com, (2017), Philippines: PH Participates in 13th Strait Travel Fair and China Leisure Tourism Expo 2017. Mena Report. Available at: https://www.highbeam.com/doc/1G1-494125277.html?refid=easy_hf [Accessed July 1, 2018]
Koldowski, J. & Yoo, J.J.-E., (2006), Seven Dominant Forces Affecting Asia Pacific Travel and Tourism Industry. Journal of Travel & Tourism Marketing, 20(2), pp.75–78.
Schröder, A. & Widmann, T., (2007), Demographic change and its impact on the travel industry: Oldies — nothing but goldies? Trends and Issues in Global Tourism, pp.3–17
Vogel, H.L., (2016), Tourism. Travel Industry Economics, pp.233–255
Wang, S., (2016), Examination of tourism undergraduates’ industry commitment, in the context of China. Journal of Teaching in Travel & Tourism, 16(2), pp.101–115.
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