Bangkok--Feb 1--eTurbo news
Tour operators have been advised not to get too excited about a new deal to open the Chinese tourism market. Reacting to news, reported in eTurboNews last week, that the United Kingdom and China had signed an agreement to allow Chinese visitors to make leisure trips to the UK, the European Tour Operators Association (ETOA) has issued advice that projections of the benefits to the tourism industry may be over-optimistic.
China has granted "Approved Destination Status" to the UK, bringing it into line with several other European countries, which will allow the UK to open a tourist office in China and promote vacation trips in addition to business travel and study tours, which were already permitted.
"We have campaigned long and hard for this," said Tom Jenkins, executive director of ETOA. "It is excellent news that the UK has gained ADS status and is now open to tourists from China. But this is not the beginning of a bonanza. Chinese consumers are not affluent and are extremely price sensitive."
One of the price sensitivities is the cost of a visa to visit Britain. It is at least one-third higher than a visa to visit some other European Union countries. And a visa for Austria, France or Italy, for example, would allow a tourist to go also to any of the mainland Europe countries signed up to the Schengen pact that allows free passage across national borders inside European Union territory. The UK is not a Schengen country, which is part of the reason for a bilateral agreement on approved destination status.
The ETOA believes there is a strong incentive for cost-conscious Chinese visitors and their tour companies to prefer mainland European countries over the UK. "The cost of a standard UK visa is UK?36; by comparison, the cost of a single entry Schengen visa ranges from UK?17 for Austria and Germany to UK?24 for Finland, France and Italy. As these visas can be used throughout continental Europe, they have a low per-country cost," the ETOA said.
"Consequently there will be an incentive for tour operators to exclude the UK from itineraries on the basis that if the UK is included it will require clients to gain two visas with all the additional cost and hassle that entails. By contrast, a tour that excludes the UK will be significantly cheaper and require less effort to organize," it added.
According to the tour operators group, while the agreement now opens the way for Chinese people to visit the UK as tourists, the Chinese government still controls the overseas travel of the vast majority of its citizens. For destinations that have entered into ADS agreements with China, a one-trip visa is issued and Chinese nationals must travel as part of an organized tour arranged through approved tour operators both in China and in the destination country.
The ADS agreement does not permit independent leisure travel, and a Chinese tour operator could lose its license if one of the parties does not return home at the end of the organized tour.
Outbound travel by Chinese nationals to approved tourist destinations is handled by travel agents in China that have been authorized by the Chinese National Tourism Administration (CNTA). The destination country recommends to the CNTA a number of creditable and competent travel agencies as land operators for handling Chinese tour groups when they arrive. In 1999, only one million Chinese nationals, out of a population of more than 1.3 billion, possessed a passport. This number rose to 4.5 million in 2004 and is projected to reach 7 million by 2006.
While the potential of the Chinese outbound market is considerable, the granting of approved destination status does not guarantee instant riches for destination countries. "Competition is generally only on price, with the result that most tours stay in poor hotels, travel on poor buses and dine in low quality restaurants. It is expected that most ADS trips to Britain and Europe will be to see the most countries in the quickest time at the least cost," said the ETOA's Tom Jenkins.
"To realize the tourism potential of this new inbound market will require the UK to make significant promotional investments. There is a lot of work to be done," he said.
This is not to say that Chinese visitors do not spend. Figures from the International Passenger Survey show that on average, a Chinese visitor to the UK spends UK1,250 per visit. While costs are cut on accommodation and travel, Chinese visitors are very keen on shopping and taking gifts home for family and friends. Until the market matures to a more quality-based approach, this is one area where there could be significant benefits for European tourism businesses.
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