Prospects For China's Tourism Industry In 2009

At a recent press conference held by the China Tourism Academy and Sohu.com's travel channel to mark the publication of their report "2008 China Tourism Economic Operation Analysis and Development Forecast in 2009", Dai Bin, the vice director of the CTA, reviewed 2008 and looked forward to 2009.

Development trends for 2009
According to Dai, China’s tourism industry experienced a hard time in 2008 due to natural disasters and the global financial crisis. Looking ahead, the structural adjustment will probably show up in market demand of this year, inbound tourism might shrink, while travel agencies focusing on inbound tourism, hotels and scenic spots that mainly depend on inbound tourists will have to reposition the market and to develop new products. For the international market, since China’s major source markets such as the USA, Japan, and South Korea have suffered a lot in the financial crisis, it will be necessary for China’s inbound tourism market to focus more on neighboring countries and regions such as Russia and East Asia, and also look to other countries and regions which are less affected by the financial crisis for example: Australia, the Middle East, and Latin America.

The government will encourage the development of the domestic tourism market to stimulate domestic demand, which suggests domestic tourism will maintain a certain growth. For outbound tourism, the state has already make clear that it won't intervene in that area but because of operating conditions, companies will decrease business expenses, and spending on MICE and outbound exhibition, which means the growth of outbound tourism will slow down. However new destinations might show a relatively big increase especially in Taiwan. Moreover, products and types of operation that suit China’s mass tourism consumption will expect better business in 2009.

Development for travel agencies In 2009
Dai pointed out that although they are strong operationally, Chinese travel agencies are quite weak in innovation. Inbound tourism, tour groups, shopping, and discounts are the first things that come to people’s mind when talking about travel agencies in China. A company should perform its basic functions such as financing, cost control, and product development. On the whole, the management philosophy of China’s travel agency cannot keep up with the the expectations of their younger customers.

In 2009, travel agencies should make certain adjustments to their products, which means they should focus more on domestic tourism and short distance tour products. The rapid development of independent travel will bring more business volume and more market space. If established travel agencies don’t make the necessary adjustment in their traditional management philosophy, methods and business model, they will probably lose their leading position in travel market. The new, innovative travel agencies, however, will bring a vital force to the industry when they finish the initial accumulation of capital and begin to look for new strategies and business models.

What should travel agencies do to make adjustments in 2009?
Dai’s answer is that they should try in the following three aspects. First, it is easier to make small amounts from many people than to make large amounts from one person. Second, make the most of modern information technology, and focus on the youth’s demand to discover potential markets and benefits. Third, dare to break old habits and try new things.

Development ideas for high-end hotels In 2009
In 2009, high-end hotels will suffer more than low-end and middle-range hotels. Despite price agreements, it is necessary for hotels to lower their prices. Besides, due to the decrease of inbound guests, hotels can take full advantages of their dining, banquet, meeting, fitness, and spa facilities to attract local guests. As a mixed product, high-end hotels should manage the problems of price and strategy for development and put more attention on domestic travel market.

New highlights for 2009
When talking about the new highlights for the tourism market in 2009, Dai pointed out that development of tourism products should generally suit the mass market; and two markets need to be positioned: the youth market and the non-traditional tourism resources such as South Gong And Drum Lane, and 798 Art District.

High-level Adjustment In 2009
Wei Xiaoan, a member of the China Tourism Academy, concluded that 2007 was the developing year for China’s tourism market, after the decline of 2008 and an adjustment in 2009, the industry will make great progress in 2010. Influencing factors of 2009 will be less than 2008. The current downturn is an opportunity for China’s tourism industry to make the necessary adjustments to take advantage of the upturn. Currently the industry is still in its traditional development model; if new models don’t come out this year, it will be a poor prospect for 2009. However with proper adjustments in 2009, the year 2010 will be a prosperous one.