CATERING TO NEW DEMAND
China’s tourism is struggling out of the mire caused by COVID-19
The past two springs, Chen Xianghong tried cheering up his team, saying the worst for tourism had passed and better times were coming soon. But, given the current pandemic situation, they’d just have to hang in there a little longer.
Chen is vice president of the China Tourism Association (CTA). He is also president of Dingdu Group, a tourism management company that runs t wo scenic spots—one is Wuzhen in Zhejiang Province, the other WTown in Beijing. Over the past two years, COVID-19 resurgences have forced the destinations to close from time to time, making it impossible for Chen and his team to predict when they will reopen to tourists.
However, the end of the pandemic is still not in sight. Faced with decreasing tourist numbers and revenue, as well as the inevitable loss of human resources, he is increasingly filled with anxiety.
Although Wuzhen is one of China’s top 10 ancient towns, just 3.68 million tourists visited it in 2021, down 60 percent from 2019. As for WTown, tourist visits plunged by 50 percent in the same period.
“Although we did not suffer any losses last year, revenue declined dramatically,” Chen said at a symposium hosted by the CTA in mid-January. So did the incomes of its employees. Consequently, many employees quit to find better-paying jobs to support their families. “It’s very difficult to keep a stable work force in the sector now,” Chen said.
A common difficulty
Not only tourist destinations have been hit hard by the pandemic, but also hotels, travel agencies, as well as the civil aviation industry.
Take the New Century Hotels & Resorts (NCHR), one of China’s leading hotel groups, for example. Among its over 400 hotels nationwide, only two made a small profit in 2021. Recently, one of its hotels was shut down. “We are considering closing several more this year,” Chen Miaolin, NCHR founder and CTA Vice President, said at the symposium.
“The year 2021 was more difficult than 2020,” Chen Miaolin said. The patchy clusters of COVID-19 cases last year resulted in unexpected off seasons during former peak travel time such as the National Day holiday. Some preferential policies for tourism enterprises that applied in 2020, like social security fee reductions, were no longer available in 2021. Consequently, his company suffered from a bigger deficit last year.
The latest data from the CTA shows that 3.43 billion domestic tourist visits were made last year, fetching total revenue of 3.02 trillion yuan ($475.8 billion)—just 57 percent and 53 percent of the respective figures in 2019.
Chen Miaolin predicts many hotels in China will be unable to pay their expenses and 15 percent of the hotels owned by real estate developers will go bankrupt.
Over 56,000 tourism-related companies closed up shop during the period from January 1, 2020, to late 2021, according to preliminary statistics from Qcc.com, an online enterprise credit inquiry platform. “The year 2022 will be the most difficult one for tourism,” Chen Miaolin said.
Micro vacations
While long-distance travel to famous t ourist destinations has dropped, short-distance trips prove resilient.
The latest CTA data show that
the average travel radius for Chinese tourists in 2021 was 141.3 km, a year-on-year decrease of 33 percent. “Local trips featuring short distance and time have become the main demand of tourists as the pandemic has changed their lifestyles and consumption behaviors,” Wu Guoping, a National People’s Congress (NPC) deputy from Jiangsu Province and President of Wuxi Nianhuawan Culture Investment Co. Ltd., said.
Chen Miaolin echoed Wu’s opinion. “Consumer demand has changed. We have to transform to cater to new demand,” he said. The two hotels that turned a slight profit last year managed to do so because they have children’s entertainment facilities, making them havens for family vacations.
Most NCHR hotels are built to serve people on long-distance business trips. Now, Chen Miaolin plans to renovate part of his hotels to meet local needs for short vacations. “I don’t know if it will work or not, but we are willing to try,” he said.
In this regard, Shanghaibased Spring Group has achieved concrete results. The company launched “microtrip services around Shanghai” in early 2020, and specialized city bus tours in Shanghai in September 2021. Both services are new, cheap and popular with tourists, said Wang Yu, Vice President of Spring Group.
Dingdu’s Chen Xianghong has tried other ways. Since 2021, staff members in Wuzhen have offered housekeeping and food delivery services to local families and enterprises. “We often say that tourism is all about poetic tours to distant places. Now, tourism means poetic visits to nearby places,” he said.
“The pandemic will end one day. We can’t reverse the overall situation, but we can change our ways of doing business to tide over the difficulty,” Chen Miaolin said.
The structure of China’s tourism has been unbalanced for a long time. Tourism service providers must transform themselves to meet the new market demands during the pandemic, Wu said.
More buoys
China has set its 2022 GDP growth target at some 5.5 percent, according to the government work report delivered by Premier Li Keqiang at this year’s NPC annual session, China’s top legislature, on March 5 in Beijing.
“Tourism is a key industry which can create many jobs to pump up the economy,” said Wang at the CTA’s mid-January symposium. “The Central Government should roll out a stimulus plan to buoy the tourism industry as soon as possible.”
Wu proposed at the session that preferential policies such as social security fee reductions should be available for tourism service providers in 2022. And tailored tourism bonds should be issued to encourage companies to upgrade their products.
Ji Guifeng, a national lawmaker from Jiangsu Province, advised extending holidays to enable people to enjoy long vacations in faraway places.
International tourism is also under discussion. “China is the largest outbound tourist source in the world,” Huang Xihua, former General Manager of Guangdong Provincial Tourism Holdings and an NPC deputy from Guangdong Province, told Beijing Review. She suggested some outbound tours to designated destinations, organized by competent agencies with strong abilities in pandemic prevention and control, should be permitted; sandbox (quarantine-free) programs for inbound tourists should be introduced in some parts of the country, such as Hainan Island and Zhoushan Island.
Regarding overall international travel, China will take new steps this year. “China will roll out a plan to facilitate safe, unimpeded travel by upgrading ‘fast lanes’ for cross-border travel and health certificates for international travelers, to facilitate safe, healthy and convenient international travel,” Wang Yi, State Councilor and Foreign Minister, said when he met the press on the sidelines of the Fifth Session of the 13th NPC on March 7. BR