Importance of budget hotel in tourism sector
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Budget hotels. In this category our experts agree 100%, unlocking the potential of domestic tourism is directly related to developing this sector. Again, in the 2006 update, WTTC suggests that the creation of hotel chains in China needs to start with the reform of the ownership system, including the separation of hotel management and hotel ownership. There is also significant concern over two specific policy areas: first, policies that favor foreign firms over Chinese companies from other regions for investment opportunities; and second, policies that discourage offshore investment and hamper hotel franchising opportunities.
Meetings, incentives, conventions and exhibition business, which is big business and where China should establish a National Convention Bureau to coordinate, orchestrate and operate the marketing, leads, sales and allocations. We’ve extended this 2003 recommendation to now suggest that the National Convention Bureau should also help to rationalize and organize the development and construction of convention and exhibition facilities throughout China, so over capacity and undesirable development does not take place.
Timeshare, where the time is right for the industry to really begin its long term sustainable growth. Committed industry professionals must work hand in hand with government to assist China in developing a well balanced regulatory framework that will help fuel the future growth of the industry while protecting the consumer’s interests. A sound regulatory framework will assist in building government, consumer, media, and investor confidence.
Human capital, where China will need to exempt the industry from permanent residence requirements and open its doors wider to external expertise that can assist in accelerating information and technology transfer.
Financial services, where reform and liberalization is needed for China to keep pace with Travel & Tourism demand.
Aviation where serious operational issues in China are rising from the tremendous growth in traffic.
Open skies, where China should continue to liberalize aviation agreements and provide for greater commercial incentives and viability, especially on routes where capacity is limited or lags behind growth in demand.
Finally closing our review of issues that have carried over from the first report, financing, where attracting sustained capital investment in China’s Travel & Tourism industry from domestic and foreign sources is key.
The 2006 recommendations go one step further, suggesting that China must also make greater efforts to clarify new laws or regulations, clarify land ownership issues and communicate the central, provincial and local governments role in Travel & Tourism to provide the transparency and confidence needed by the private sector to make even greater investment.
Also, if China wants to achieve its “tourism power” vision, it must provide for and legislate the necessary repatriation of revenues by international companies.
Now, let’s turn our attention to a series of issues which are new in this 2006 report.
Inbound Tourism. As inbound visitor numbers approach 120 million, realizing the full potential of this traffic will require segmenting and customized servicing to satisfy and address the specific needs and objectives of the various markets (budget, mid-class or luxury). Old fashioned and highly structured tourist products no longer suit the demands of contemporary international tourists who are seeking more independence and greater flexibility of choice.
Turning our attention to Macau for the first time, we believe that there are a host of challenges to address including limited direct air access from source markets, customer analysis to guide policy formulation, co-ordination between gaming and tourism, quality service standards as well as increased competition from other upcoming gaming destinations. A PATA Task force has made a series of recommendations that should serve to address these issues and assist Macao in this massive tourism development venture. We back these recommendations and add our support to their swift implementation.
Turning to Hong Kong. In December 2002, the Joint Council of the Travel Industry of Hong Kong submitted a proposal to the Chief Executive on the future development of the Travel & Tourism industry. Although the proposal is now 3 years old, much of what was proposed is still valid today. According to the proposal, significant focus must be placed on developing a long-term tourism policy; increasing air routes and frequencies through a progressive liberalisation policy; improving and expanding tourism infrastructure on land, sea and air; improving Hong Kong’s business environment and competitiveness; providing great product and service support to industry players and visitors thru a broad-range of government services; and communicating and working together with the industry to develop a stronger brand for Hong Kong. Like the PATA Task Force recommendations in Macau, we back these recommendations for Hong Kong and offer our support and assistance in moving them forward.
New airlines, an important new development. China’s first privately-owned carriers have begun operations in an attempt to open the Chinese aviation market to a broader market potential and expand the various service options to the flying public.
Although the CAAC has relaxed the establishment of carriers, it still has not yet liberalized the domestic fuel market, service offerings, flight fares or the import of aircraft that are necessary for the operational economies of a low cost carrier.
Without properly addressing these issues, it will be difficult to effectively establish a low-cost low-frills air sector that will take China’s Travel & Tourism forward to the next level.
Last, the environment.
According to The NewRepublic Online, “Sixteen of the world’s 20 most polluted cities are in China.”.
WTTC recommends that China adopt the principles of ecological preservation as outlined in Agenda 21, developed for the Travel & Tourism industry after the 1992 Rio Earth Summit by WTTC, the World Tourism Organization and the Earth Council. To do any less would be a disaster for China’s Travel & Tourism economy.
Ladies and gentlemen, there you have it, the major recommendations from our report. There is a great deal more detail in the report, and I encourage you to read it when you have some free time.
Let me close by emphasizing one last point and that is engagement.
The Chinese authorities, CNTA, CAAC and the like have been doing a heroic job of transforming this amazing country into a Travel & Tourism market economy unlike any the world has ever seen. However, the job they have before them is staggering. So too are the opportunities, which is why each of you are here today.
WTTC has led the charge for engagement. We began our efforts in China in 1994 and continue to this day with this update of our biggest and most important country report. Our China Steering Committee now numbers more than 50 members and we now have two Global Members who originate from here, Shun-Tak Holdings and Beijing Tourism Group.
I encourage you and your organizations to engage in the process. We’ve got a lot more work to do and can always use more muscle, more brains and more resources to get the job done.
Before I close, I would like to thank HVS for helping us launch this new research today, I can see that many of the industry players are here and will hopefully help us extend the reach of our own WTTC network. We’re building great momentum in China, Hong Kong and Macau and hope that you’ll join us in our efforts. Thank you.