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China's First Tourism Law Monitourism

Will China’s First Tourism Law Make The Rest Of The World A Forbidden City For Chinese Tourists?

Much has been said about the potential impacts of China’s new tourism law over the past year. But, after four months under the Tourism Law of the People’s Republic of China, the global travel and tourism market is finally beginning to feel the full weight of the law’s implementation. How has the law affected the outbound Chinese tourism market? And, what effect will the law have on the global travel and tourism industry? The MoniTourism Editorial Team gives an exclusive first look into some of the developing long-term effects, both domestically and abroad, of China’s first-ever tourism law.

After four months under China’s first-ever tourism law, the global travel and tourism market is finally beginning to feel the full weight of the law’s implementation.

Most recently, the Australian Bureau of  Statistics reported a decrease of 18.5% in inbound Chinese tourism growth over the past year, due largely in part to the China Travel Law which went into effect on October 1.

Approved by the China National Tourism Administration (CNTA) in April, the Tourism Law of the People’s Republic of China 1 (as it is formally titled) was put into place to regulate China’s growing tourist industry, primarily restricting outbound Chinese practices and demanding minimum tour standards for outbound Chinese tourists. How has the law affected the outbound Chinese tourism market?

Initially, the law’s implementation resulted in sharp increases in holiday travel prices abroad. Price hikes by tour operators for outbound Chinese tourists helped close the gap between the price of packaged tours and do-it-yourself tours by Chinese travelers, leading to an immediate decrease in the number of ‘zero-dollar’ and cheap package tours abroad.

While tourist organizations across the globe continue to claim that, in the long-run, the law will result in a boon – rather than a bane – for the global travel and tourism industry 2, countries like Taiwan, New Zealand, and South Korea (each huge markets for outbound Chinese tourists) began reporting uncharacteristic decreases – of up to 20% – in visitor numbers shortly after the law’s implementation.

But, what effect will the law have on the global travel and tourism industry? For starters, the China Tourism Law has already begun to stratify the outbound Chinese tourism market in terms of income-level. While the Tourism Law has done nothing to deter those with a high disposable income from spending money to travel early and often, Wolfang Georg Alt, editor of China Outbound Market Intelligence magazine, claims the law will “bolster the already growing segment of … self-organized travelers and … [continue to] make this kind of travel organization [even] more attractive for less affluent travelers.”

Still, the tourism law’s call for less mass tourism practices abroad – like cheap forced-march shopping excursions led by underpaid tour guides – inevitably makes travel and tourism more expensive for low-income Chinese citizens. Thus, countries should expect continued decreases in inbound Chinese tourism across the board in the short-term.

China, on the other hand, should expect increases in the net profitability of their travel and tourism industry. According to the United Nations World Tourism Organization (UNWTO), the global travel and tourism market will be made up of 100 million outbound Chinese tourists by 2015 3. However, the UNWTO also predicts that China will generate 100 million arrivals worldwide well before 2020 4.

Combined with the Tourism Law’s increased restrictions on spending abroad, this move exhibits the growing trend of Chinese emphasis on incoming tourism and could result in net profitability for the country (in terms of travel and tourism) within the next decade.

So, the question remains: Who will feel the pressure of such a long-term shift in the global travel and tourism industry? Is the world paying for China’s rise or will the burden ultimately fall on the shoulders of Chinese tourists?

 

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