China Tourism Report Q4 2008

Tepid January-May Arrivals Growth Preliminary figures released by the China National Tourism Administration in July 2008 indicated that tourist arrivals growth increased by 3.87% y-o-y from January to May. Tourist arrivals totalled 5.47 million, with arrivals in May alone totalling 1.08 million, a rise of 1.39% m-o-m. However, when arrivals from China's Special Administrative Regions of Hong Kong and Macau were included, tourist arrivals grew by 9.28% y-o-y, indicating that domestic tourism is flourishing.

Foreign arrivals growth of 3.87% is somewhat disappointing, given that we are forecasting full-year arrivals growth of 10%. However, we expect that many tourists have delayed planned visits to China in order to coincide with the August Olympics, when we expect tourist arrivals to increase significantly.

This boost to tourism arrivals should offset lacklustre performance in the first half of the year, with tourism arrivals from outside the region having been deterred by rising global fuel prices.

Olympics Triumph Improves Tourism Potential The Beijing Olympics, held between 8-24 August, proved an opportunity for China to demonstrate both its political and economic success to the world. The impressive Olympics opening ceremony was a showcase for the country's culture and achievements, and provided a welcome spotlight on the country's potential as a tourist destination. To enhance this potential - and to ensure that the tourism boost provided by the Olympics feeds into long-term tourism industry growth - the National Tourism Administration organised complementary events in different regions, as a means of attracting tourism beyond Beijing and the coastal areas.

Initial reports indicate that China's aim of attracting 0.5 million visitors to Beijing for the Olympics has been achieved, although the aim of 2.4 million domestic visitors appears to have been a little optimistic, given rising transport costs. While August tourist arrivals figures are not likely to be released until some months after conclusion of the Olympics, we expect to see indications of strong arrivals growth.

Olympics Infrastructure Legacy Even once the Olympics are over, China will continue to reap the benefits of holding the world's most prestigious sporting event for some years to come. Quite apart from increased publicity for the tourism industry, the infrastructural investment benefits will improve the country's long-term potential as a tourist destination. For example, from 2002 Beijing invested a total of US$1.1 billion on improving infrastructure in the city, with the result that two new ring roads have been built, the metro system extended, more than 318 km of street refurbished and, most impressively, a new airport terminal that during the Games proved capable of handling the influx of visitors. Such infrastructure improvements, alongside environmental investment to reduce Beijing's notorious air pollution, will encourage further tourism in future, with Beijing authorities anticipating arrivals growth of 8-9% in the two years following the Olympics.

• Executive Summary
  • Table: China Tourism Industry SWOT
  • China Political SWOT
  • China Economic SWOT
  • China Business Environment SWOT
• Market Overview
  • Tourism Outlook
  • Table: China's Tourism Industry, 2004-2012
  • Tourism Business Environment
  • Table: Asia Travel And Tourism Business Environment Ranking
  • Government Monetary And Exchange Rate Policy
  • Monetary Policy
  • Table: China Monetary Policy, 2005-2012
  • Exchange Rate Policy
  • Travel
  • Airlines
  • State-Run Airlines
  • Private Airlines
  • Oil Price Forecasts
  • Table: BMI's Long-Term Fuel Price Assumptions, 2004-
  • Cruises
  • Hospitality
  • Hotels
  • Table: Structure Of China's Accommodation Market
  • Budget Hotels
  • Gaming
  • Key Risks To Accommodation Forecast Scenario
  • H5N1 Virus Update
  • Special Report: The Olympics
• Company Profiles
  • Air China
  • Melco International Development
  • Shangri-La Asia Ltd
  • Jinjiang International Holdings
• BMI Forecast Modelling
  • How We Generate Our Industry Forecasts
  • Tourism Industry
  • Tourism Ratings Methodology
  • Table: Tourism Business Environment Indicators
  • Table: Weighting of Components
  • Sources