Is Tourism Approaching a Low-price Era?

时间:2022-07-08 04:01:54

Under the influence of the international financial crisis, the price of many hotel rooms, scenic spots, and flights have been sharply reduced in an attempt to stimulate demand. Travel is suddenly costing about half what it did in the past, starting a “low-price era” of tourism.

SINCE Spring Festival, many low-price tours have been listed by Beijing travel agencies, many at half the price advertised before the holiday. These are just a few of the hot deals on offer: “Harbin four-day snow tour with snow sculptures, ice lanterns and Yabuli ski stops, RMB 760 per person; Guilin Yangshuo four-day return flights, RMB 1,690; Jiangxi spring outing six-day package including stops in Lushan Mountain, Jingdezhen and Wuyuan, RMB 1,690.”

“We had been to travel agencies many times, but finally gave up due to the unaffordable prices. But during the Spring Festival holiday this year, we finally got the chance to travel, since all our family had time and the price of hotels and scenic spots fell,” said Li Yuan, who visited Guilin with her husband and parents. She got the idea of taking a trip after hearing the fuel surcharge on domestic flights would be cut after January 15.

As well as domestic price wars, there is fierce competition in the outbound travel market. The average cost of European trips has always been above RMB 10,000 in recent years. Beijing Caissa International Travel Service, which specializes in European tours, has taken the lead in price reductions, offering a “German eight-day happy tour” for just RMB 7,999.

Huayuan International Travel Co., Ltd. has updated its European tour costs, and now offers a package encompassing eight European cities and a “Free Trip to Paris,” costing only RMB 5,799. Packages to London, Rome, Frankfurt, Munich and Athens are all less than RMB 6,500.

“Because of the international financial crisis, many Western currencies have slumped, meaning the exchange rate of the RMB has improved greatly. The fuel surcharge has also dropped, meaning the cost of outbound tours has declined rapidly,” explains Wang Yanguang, assistant to the president of the Head Office of the China International Travel Service (CITS). “The current financial storm has made high price routes unpopular, so agents have had to adjust prices to attract tourists. This year will be a low-price year for the tourism industry.”

Big Challenges

“We would not lower prices if the financial crisis hadn’t happened,” says Chen Yating, a staffer at the Ganjiakou branch of the China International Travel Service. According to her, the inbound tour market had its gloomiest year in 2008 since the SARS crisis of 2003. Affected by many aspects, numbers dropped and many tours were cancelled. Furthermore, the 2008 Beijing Olympics pushed up hotel prices and vehicle hire, shrinking the profits of tour-related businesses.

In general, autumn is the peak season for inbound tours. It was assumed that China would be more popular with overseas tourists after the Olympics, but last October, the number of overseas visitors actually dropped by 5.94 percent compared to the same period in 2007. Domestic tourism also suffered grim problems because the Chinese stock market and real estate industry all plummeted sharply in value.

“The global financial crisis led to a perceptible reduction in the number of tourists coming to China,” comments Wang Yanguang. “The tourism industry is very sensitive and easily affected by the global economic situation. In a period of global recession, it’s hard to know how the industry will fare in 2009.” To make matters worse, 2009’s Spring Festival came earlier than usual, while the seven-day Labor Day holiday in May has been cancelled, creating a prolonged low season from the beginning of February.

Many developed countries have either plunged into recession, or are teetering on the brink. The International Monetary Fund estimates that economic growth in Japan, the United States and the Euro zone will be non-existent in 2009. “Demand for inbound tours may continue on a downward trend,” Wang comments gloomily.

Zhu Li, a department manager of the Guizhou Overseas Travel Corporation (GZOTC), is concerned that in order to save money, many tourists have changed their travel plans from outbound to domestic tours. This change has stimulated the provincial tour market. Statistics show that at the beginning of 2009, demand for domestic tours rose by 20 to 30 percent, in stark contrast to the lack of growth in outbound tours.

As the global financial crisis bites, low-price tour packages have become the best way to stimulate the declining market. “Low-price promotions are a method of pulling potential tourists back, but the competition is not as vicious as in the past,” says Wang Yanguang. “The question is whether demand can be substantially increased simply through low-price deals.”

National Leisure Program

“The financial crisis lessened our business, so the company leadership tries to reduce expenditure. Last year our annual bonuses were much less than previous years, and payrises were hopeless. My boyfriend and I were planning a tour to Sanya in Hainan, but we have changed our plans and will join a provincial tour,” says Liu Ying, a foreign trade dealer at a Guangdong toy factory. In the past she had to get straight back to a busy work schedule when the seven-day Spring Festival finished, but this year she took a 15-day break.

“To expand domestic tourism, the National Leisure Program will be launched to promote inbound and outbound tours, to stimulate consumption and inject vitality into the domestic tourism market,” remarks Shao Qiwei, chairman of the National Tourism Administration.

The National Leisure Program involves a series of measures designed to give different groups a chance to travel, including free trips for outstanding staff in various enterprises, and government-sponsored trips for low-income groups, students and retirees. The program aims to increase people’s travel opportunities and raise the annual number of outbound tourists to 100 million by the end of 2016. On February 21, Guangdong Province took the lead in this project, and migrant workers like Liu Ying are now able to get preferential prices at certain local scenic spots by showing their temporary residence permit.

During Spring Festival, tourists to Shandong Province enjoyed various preferential measures and colorful tourist activities. Nearly 50,000 free tickets for local 3A scenic spots or higher were distributed. Moreover, star-rated hotels in 10 major tourist cities offered 1,000 free rooms as a reward for tourists going to Shandong.

Similarly, other provinces and cities have made efforts to stimulate tourism. During Spring Festival, the Beijing Tourism Bureau handed out 50,000 free tickets nationwide to the city’s major scenic spots, while the Hunan Provincial Tourism Bureau awarded RMB 1 million to Hunan citizens through a lottery, in order to encourage locals to explore their province. After arriving at their destination, tourists go shopping and enjoy local cuisine, helping to expand domestic demand and stimulate the tourist market.

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