Tourism in China

Alan A. Lew, PhD

Northern Arizona University

Lawrence Yu, PhD

The George Washington University

John Ap, PhD

The Hong Kong Polytechnic University

Zhang Guangrui
The Chinese Academy of Social Sciences

Editors

The Haworth Hospitality Press An Imprint of The Haworth Press, Inc. New York London Oxford

Published by The Haworth Hospitality Press, an imprint of The Haworth Press, Inc., 10 Alice Street, Binghamton, NY 13904-1580. 2003 by The Haworth Press, Inc. All rights reserved. No part of this work may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, microfilm, and recording, or by any information storage and retrieval system, without permission in writing from the publisher. Printed in the United States of America. TR: 5.21.03 Cover design by Lora Wiggins. Library of Congress Cataloging-in-Publication Data Tourism in China / Alan A. Lew ... [et al.]. p. cm. Includes bibliographical references (p. ) and index. ISBN 0-7890-1281-2 (hard : alk. paper) ISBN 0-7890-1282-0 (soft) 1. TourismChina. I. Lew, Alan A. G155.C55 T68 2002 338.4'79151046dc21 2002068768

CONTENTS
About the Editors Contributors Foreword Harsh Varma SECTION I: INTRODUCTION AND HISTORICAL DEVELOPMENT Chapter 1. Introduction: Chinas Tourism Boom Zhang Guangrui Alan A. Lew Chinas Tourism Environment International Tourism Environment The Chapters Chapter 2. Chinas Tourism Since 1978: Policies, Experiences, and Lessons Learned Zhang Guangrui Tourist Movement Tourism Infrastructure The Context of Chinas Tourism Policies Experiences and Lessons Conclusion Chapter 3. China in the Eyes of Western Travelers, 1860-1900 Xiaolun Wang Background Routes and Modes of Travel Travelers and Travel Narratives Implications 3 xi xiii xvii

3 5 9 13 14 20 23 29 33 35 36 37 40 48

Chapter 4. Chinese Vernacular Heritage As a Tourist Attraction: The Case of Beijing Ning Wang Introduction Vernacular Architecture As a Sign of Identity Quadrangles and the Cultural Identity of Beijing Urban Modernization versus Vernacular Quadrangles Turning the Quadrangle into a Tourist Attraction Conclusion SECTION II: RESEARCH AND IMPACTS Chapter 5. Tourism Research in China Zhang Guangrui Tourism Research Institutions Outline of Tourism Research Development Dissemination of Research Findings Trends and Problems Recommendations Conclusion Chapter 6. Economic Impact of Tourism in China Xu Gang Claudia Kruse Tourisms Export Contributions to the Chinese Economy The Economic Contributions of Chinese Domestic Tourism Tourism, Jobs, and GDP Tourism and Chinese Regional Development Tourism and Poverty Alleviation Look to the Future: Challenges and Policy Options Chapter 7. Ecotourism in Chinas Nature Reserves Kreg Lindberg Clem Tisdell Dayuan Xue

51 51 52 55 58 60 62

67 68 71 74 76 79 81 83

84 88 90 90 95 98 103

Nature Reserves and Ecotourism: Context and Policy Issues 105 The Role of Ecotourism in Reserve Finance 107 The Role of Ecotourism and Local Development 111

Infrastructure and Environmental Management Staffing Issues The Visitor Experience and Interpretation The Example of Jiuzhaigou Biosphere Reserve, Sichuan Province Summary SECTION III: INDUSTRY AND DEVELOPMENT Chapter 8. Critical Issues in Chinas Hotel Industry Lawrence Yu Chinas Hotel Industry Consolidation and Brand Development Development Strategy by Global Hotel Companies Analysis of Hotel Financial Performance Conclusion Chapter 9. Travel Agencies in China at the Turn of the Millennium Qian Wei Overview of the Development of Chinas Travel Agencies Chinas Travel Agencies Today Major Problems Faced by Chinas Travel Agencies Today Conclusion and Recommendations Chapter 10. Chinas Tourist Transportation: Air, Land, and Water Barry Mak Air Transportation International Tourist Land and Water Transportation Domestic Tourist Surface Transportation Transportation Issues in Chinas Future Chapter 11. An Assessment of Theme Park Development in China John Ap Theme Park Development Elements of Success

114 117 118 121 122

129 130 132 136 137 139 143 145 147 154 159 165 167 173 176 183 195 196 200

Reasons for Failure Prospects Facing the Theme Park Industry in the Twenty-First Century SECTION IV: TOURISM MARKETS Chapter 12. Tourism Marketing in the Peoples Republic of China Suosheng Wang John Ap Current Market Situation Tourism Marketing at the National Level Tourism Marketing and Promotion Issues Affecting the Development of Chinas Tourist Markets Summary Chapter 13. Short- and Long-Haul International Tourists to China Xiaoping Shen Foreign Visitors in China Growth of Long-Haul Foreign Visitors Characteristics of Long-Haul Visitors Spatial Concentration and Changes Conclusion Chapter 14. Leisure in China Honggen Xiao Characteristics of Leisure in China Leisure Products in China Conclusion: Toward the Emergence of a Leisure Industry Chapter 15. Mainland Chinese Outbound Travel to Hong Kong and Its Implications Zhang Qiu Hanqin Carson L. Jenkins Hailin Qu Chinas Outbound Travel Destination Hong Kong

202 209

217

218 220 224 229 233 237 238 241 244 251 259 263 264 266 273 277

278 280

Mainland Tourists Policy Implications for Hong Kong Conclusion SECTION V: CONCLUSION Chapter 16. World Trade and Chinas Tourism: Opportunities, Challenges, and Strategies Lawrence Yu John Ap Zhang Guangrui Alan A. Lew Opportunities Challenges Strategies Conclusion Appendix: Acronyms and Glossary Index

286 290 292

297

297 299 304 306 309 315

Chapter 1
Introduction: Introduction: Chinas Tourism Boom

Chinas Tourism Boom

Zhang Guangrui Alan A. Lew

Travel and tourism has become a strategic industry in Chinas development toward a socialist market economy. Two decades of development have yielded both positive experiences and hard lessons. The country is still probing better ways of developing a strong travel and tourism industry that can compete successfully in regional and global markets. China faces many opportunities and challenges in developing its tourism in this new century, although they may be quite different from those in the decade before. Chinas tourism has a bright future, although arduous efforts will be required to develop it effectively. The compilation of chapters in this book presents the diverse opportunities and challenges that China faces, as well as some of the strategies that help to bring about more successful future development.

CHINAS TOURISM ENVIRONMENT China is rich in tourism resources. An incredible diversity of landscapes and cultures stretches across the vastness of the country. Every type of tourist will find something: densely crowded cities with modern skylines and old traditional structures, UNESCO-recognized natural and cultural heritage sites, agricultural villages nestled in lush tropical vegetation, nomadic horse riders galloping across open grasslands and deserts, snow- and ice-covered mountains offering challenging adventures for new tourists, and quality resorts with world3

TOURISM IN CHINA

class golf and other entertainment activities. Most of the many cultures are old and very traditional. There is great potential in China for specialized tourism, focusing on ethnic groups and colorful cultures, as well as environmental adventure. The growing market in ecotourism in the developed world will find considerable opportunities in China, as well. Sound economic growth supports the tourism industry. Further deepening of the recent economic reforms and increasing openness to the outside world have helped Chinas economy grow quickly. The countrys gross domestic product (GDP) was RMB 8940.4 billion (bn) yuan in 2000 (US$1.00 = RMB 8.30 yuan), and China experienced an annual growth of 8.3 percent in the latter half of the 1990s (Zhu 2001). It is expected to grow at 7 percent per year in the first five years of the new century. The stronger economy will afford further improvement in infrastructure for tourism development and, at the same time, will foster more Chinese tourists, both domestic and outbound. Positive government policies advance tourism. The Chinese government first made clear that tourism was an important part of the tertiary (service) industry in the 1980s. Tourism was further designated as a growth point of the national economy in the late 1990s. So far, over two-thirds of the provincial governments have committed to making tourism one of their pillar industries. In the national campaign for the development of western China, tourism has also been made a priority among industrial sectors. In his report on the 10th Five-Year Plan for the National Economy and Social Development, Premier Zhu Rongji stressed that the development of the service sector should be sped up, and more efforts should be given to the service industries directly related to resident consumption such as real estate, community service, travel and tourism, catering, entertainment and recreation, and health (Zhu 2001). Therefore, more preferential government policies have been, or will be, worked out to support tourism development at both central and local levels. For example, the central government has increased public holidays, and purposely made three weeklong holidays per year (one each during the Spring Festival, May Day Festival, and the National Day holiday, which starts October 1) to give residents more leisure time. Indeed, this practice has proved that domestic tourism can be a driving force for increasing domestic consumption, and further stimulating production.

Introduction: Chinas Tourism Boom

INTERNATIONAL TOURISM ENVIRONMENT Chinas entry into the World Trade Organization will expand tourism. China joined the World Trade Organization in November 2001. This may provide other opportunities for its tourism development, including:

fewer formalities and barriers for cross-border travelers, reductions in traveling costs as a result of global competition, removal of some protectionist policies, and upgrade of communication, financial, and information facilities.

China will remain more open to the outside world, and more international management practices will be introduced. The removal of barriers to trade and travel will enhance Chinas position as a country for financial investment, international business, and business and leisure travel. The international climate is improving for Chinas tourism development. China is located in the rapidly growing Asia Pacific realm. Both economies and tourist travel are expected to grow faster in this region than in the rest of the world, although the unexpected financial crisis cast some shadows on the regions economy in the late 1990s. According to the WTO, the worldwide average growth of international tourism during the 1990s was less than 5 percent, while growth in the Asia Pacific region was over 8.3 percent in the first half of the decade, and 2.7 percent in the latter half due to the financial crisis (WTO 2000). China is the largest country in the Asia Pacific region and an active member of the Pacific Asia Travel Association (PATA). In terms of international tourism, China enjoyed the fastest growth in arrivals in the region in the last decade, and such trends will develop in the years to come. In addition to Japan, which is expected to continue to be a major tourist market for China, other countries in the region, and the close neighboring countries in particular, are expected to bring even more leisure tourists and business travelers to China. According to the WTO, Chinas top ten markets will include Japan, the Republic of Korea, United States, the Russian Federation, Mongolia, Singapore, Malaysia, the Philippines, the United Kingdom, and Germany by 2020, and Chinas annual growth rate from 2000 to 2010 will be 9.5 percent (WTO 2000). The return of Hong Kong and Macao to their motherland

TOURISM IN CHINA

has been a success, making movements of people easier and more frequent. As a unique and interesting destination, China will be a major factor in the future development of regional tourism throughout Asia, as well as throughout the world. According to the forecast by WTO, China will be the top international destination country in the world with about 137 million international arrivals by the year 2020, and with over 1 million outbound visitors a year, China will rank fourth on the list of countries generating tourism (Tables 1.1 to 1.4). The success of Chinas market-oriented reforms has drawn attention worldwide, from politicians to business circles and the general public. Chinas rapidly developing business environment is already responsible for a major part of the growth in tourism in recent years. Not only are foreign investments flowing into the country, but they also are increasing the numbers of entrepreneurs, who typically combine pleasure with their business trips. This component of the visitor market will likely increase in the coming years. There is little doubt that, barring any unpredictable upheavals, China will soon be as successful in the tourism business as any competitor in the international marketplace. Based on the WTOs bright forecasts, and adjusted for the specific goals and conditions, the China National Tourism AdTABLE 1.1. Worlds Top Ten International Tourism Destinations (2000) Intl Tourist Arrivals (millions) 74.5 52.7 48.5 41.2 31.2 24.9 22.8 20.4 20.0 18.9

Rank 1 2 3 4 5 6 7 8 9 10

Country France United States Spain Italy China United Kingdom Russian Fed. Canada Mexico Germany

Growth (%) 2.0 8.7 3.7 12.8 15.5 15.5 23.2 4.9 5.0 10.5

Source: World Tourism Organization (WTO) (2001). Tourism Highlights 2001. Madrid: WTO.

Introduction: Chinas Tourism Boom

TABLE 1.2. Worlds Top Ten International Tourism Earners (1999) Intl Tourism Receipt (US$ million) 74, 881 32, 497 31, 507 28, 359 20, 223 16, 730 14, 098 12, 533 10, 171 7, 223 Annual Growth (%) 5.0 8.9 5.3 5.0 3.6 0.2 11.9 0.8 8.2 3.6

Rank 1 2 3 4 5 6 7 8 9 10

Country United States Spain France Italy United Kingdom Germany China Austria Canada Mexico

Source: World Tourism Organization (WTO) (2001). Tourism Highlights 2001. Madrid: WTO.
TABLE 1.3. Top Ten World Tourism Destinations in 2020 Intl Tourist Arrivals (thousands) 137,100 102,400 93,300 71,000 59,300 52,900 52,800 48,900 47,100 44,000 708,800

Rank 1 2 3 4 5 6 7 8 9 10 TOTAL

Country/Region China United States France Spain Hong Kong, SAR, China Italy United Kingdom Mexico Commonwealth of Independent States Czech Republic

Market Share (%) 8.6 6.4 5.8 4.4 3.7 3.3 3.3 3.1 2.9 2.7 44.2

1995-2020 Growth (%) 8.0 3.5 1.8 2.4 7.3 2.2 3.0 3.6 6.7 4.0

Source: World Tourism Organization (WTO) (1997). Tourism: 2020 Vision. Madrid: WTO.

TOURISM IN CHINA
TABLE 1.4. Top Ten World Tourist-Generating Countries in 2020 Outbound Tourist Departures (thousands) 163,500 141,500 123,300 100,000 96,100 37,600 35,400 31,300 30,500 29,700 788,900 Market Share (%) 10.2 8.8 7.7 6.2 6.0 2.3 2.2 2.0 1.9 1.9 49.2

Rank 1 2 3 4 5 6 7 8 9 10 TOTAL

Country/Region Germany Japan United States China United Kingdom France Holland Canada Commonwealth of Independent States Italy

Source: World Tourism Organization (WTO) (1997). Tourism: 2020 Vision. Madrid: WTO.

ministration (CNTA) developed the 10th Five-Year Plan and LongTerm Goal Outlines up to 2015 and 2020 for Tourism Development in China (CNTA 2001). Over the next twenty years, according to this ambitious plan, China will move from being a big tourism country to becoming a powerful tourism country. Specific quantitative goals set in the plan include the following:
By 2020, China will have 210 to 300 million inbound tourist ar-

rivals, 2.5 to 3.6 times greater than the figure of 2000. Among them, foreign tourist arrivals will reach 31 to 45 million, 3 to 4.4 times greater than that of 2000. International tourism earnings will be US$58 to 82 billion, 3.6 to 5 times above the figure of 2000. During the same period, domestic tourism revenue will reach RMB 2100 billion yuan, 6.6 to 9.4 times that in 2000. Therefore, the total output of both inbound and domestic tourism will be RMB 3600 billion yuan, 8 times of that of 2000, equivalent to 11 percent of Chinas GDP by 2020. Indeed, the tourism industry will become the pillar of the countrys economy.

Introduction: Chinas Tourism Boom

For the first five years in the new century, the foundation stage, international tourism revenue will grow by 8 to 10 percent annually, while domestic tourism revenue will grow by 8 to 9 percent. The second five years will be an upgrading stage, with international tourism revenue growing by 6 to 8 percent, and domestic tourism revenue growing by 10 to 12 percent. The third five years, from 2011 to 2015, will be a stage of consolidation. International tourism revenue will reach US$43 to 56 bn with an annual growth of 6 to 8 percent, while domestic tourism revenue will grow by 10 to 12 percent. The last five years of the plan, from 2016 to 2020, will be the stage of perfection. By 2020, the total tourism output will be RMB 2500 to 3600 bn yuan, accounting for 7.9 to 11.4 percent of Chinas GDP. The plan has been approved, and detailed implementation measures have been developed by the CNTA. THE CHAPTERS The contributions in this book describe many of the forms and challenges of tourism throughout the modern history of China. In Chapter 2, Zhang Guangrui provides an overview of the key period of modern tourism development in China, which essentially began in 1978. Comparisons to the earlier Maoist Communist period show the remarkable changes that were unleashed in that year. In Chapter 3 Xiaolun Wang then takes us back in time more than a century to examine how international tourists from the West viewed China at that time. Interesting corollaries with modern tourists show how some aspects of the human travel experience transcend time and space. The introductory section of this book concludes with Ning Wangs (Chapter 4) look at the modern vernacular landscape in Chinaa landscape that seems to be rapidly disappearing in the modernizing city of Beijing while it also becomes a tourist attraction. The tension between modernization and traditional values and places are evident throughout this introductory section. Section II addresses some of the more empirical impacts of tourism in China. In Chapter 5, Zhang Guangrui provides another insightful overview with a look at the state of tourism research in China and the variety of agencies and levels at which this takes place. Xu Gang and Claudia Kruse focus in Chapter 6 on the economics of tourism

10

TOURISM IN CHINA

that have been so important in driving this growing sector in China. In Chapter 7, Kreg Lindberg, Clem Tisdell, and Dayuan Xue provide insight into ecotourism in China and its sometimes problematic role in the management of Chinas nature reserves. The chapters in the third section of the book assess major segments of Chinas tourism industry. Lawrence Yu (Chapter 8) describes the development and challenges of Chinas accommodations industry, which has struggled over the years to meet the needs of growing tourist demand. Even more of a challenge has been the complex development of travel agencies in China, which Qian Wei so well describes in Chaper 9. In Chapter 10, Barry Mak gives a comprehensive overview and analysis of the development of the varied forms of transportation that tourists and other long-distance travelers use in China. Each form has had its own distinct development history through Chinas transition from communist to market orientations. John Ap (Chapter 11) provides several case studies in his description of the occasional successes, but more common failures, in rapid growth of theme and amusement park development in China. He provides a detailed and useful description of how China, and its investors, might improve the success of future man-made attractions. The chapters in Section IV explore the tourists themselves, both international and domestic. The tremendous growth in Chinas tourism has actually occurred with limited organized marketing on the part of the Chinese, as Suosheng Wang and John Ap describe in Chapter 12. They explain how China has tried to manipulate the tourism market, in a rather basic manner so far. In Chapter 13, Xiaoping Shen describes the number and characteristics of international tourists to China. She notes the distinct market segments that exist, especially the difference between short-haul (mostly from Asian countries) and long-haul visitors. In Chapter 14, Honggen Xiao looks at leisure in China, providing insight into the lifestyle of contemporary Chinese, for whom domestic and outbound travel have now become major life goals. Outbound travel is described in Zhang Qiu Hanqin, Carson L. Jenkins, and Hailin Qus contribution (Chapter 15), with a focus on Hong Kongs role in the development of this potentially huge market for Asia and the world. The editors of this book combine their collective expertise with the insights that the contributing authors provided to lay out the challenges that Chinas tourism faces and the future development strate-

Introduction: Chinas Tourism Boom

11

gies that could enhance its success in Chapter 16. No one can predict the future, but much can be learned from the past. That being said, tourism is a huge phenomenon in China, and not all of its facets are covered in this book. This book was intended to be a second edition to Tourism in China (Lew and Yu 1995.) However, reflecting the many changes that Chinas tourism has undergone since the earlier book was published, this volume contains mostly new chapters and has a distinctly different focus. One major difference is that this new effort focuses primarily on the core region of Chinas tourism development, which is situated in the Han Chinese area of eastern China. Due to space limitations, the non-Han Chinese regions of Chinas southwest, north, and west were intentionally omitted, even though they have very important roles to play in Chinas overall tourism economy. With the exception of Chinese outbound travelers to Hong Kong, the compatriot Chinese regions of Hong Kong, Macao, and Taiwan were also intentionally omitted, as was border tourism along Chinas enormous international land boundary. These are all key areas in the future development of tourism in China and Asia, but their inclusion would have easily doubled the length of the current book although it may justify a future sister volume. Despite these limitations, we hope you find the book useful in your efforts to understand Chinas tourism. REFERENCES
CNTA (2001). zhongguo lvyouye fazhan shiwu jihua he 2015/2020 nian yuanjing mubiao gangyao (The 10th five-year plan and the long-term goal outlines up to 2015 and 2020 for tourism development in China). Beijing: China Tourism Publishing House. Lew, Alan A. and Yu, Lawrence, eds. (1995). Tourism in China: Geographical, Political, and Economic Perspectives. Boulder, CO: Westview Press. World Tourism Organization (WTO) (1997). Tourism: 2020 Vision. Madrid: WTO. World Tourism Organization (WTO) (2000). Tourism 2020 Vision East Asia and Pacific. Madrid, Spain. World Tourism Organization (WTO) (2001). Tourism Highlights 2001. Madrid: WTO. Zhu Rongji (2001). Report on the 10th five-year plan for the national economy and social development on March 5, 2001. Peoples Daily (Beijing), March 17.

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