For China's tourism, 2003 is definitely an impressive year. The ups and downs of tourism affected by the happenings of some major events of this year showed that tourism is a very vulnerable industry. Because of the Iraq war and SARS plague, China's tourism output had decreased to zero in a short time in the first half of the year. However, the industry recovered soon and eventually went through the hardest time, regaining its vigor and momentum.

The suffering caused by the Iraq war and SARS
 
In March, the outbreak of the Iraq war hit hard on the desirability of traveling. First of all, inbound tours from the Middle East and Europe were seriously affected, and then the Chinese outbound travelers intending to visit Egypt and Turkey began to withdraw from their planned schedules.

The country's tourism suffered even stronger strike when there was the worldwide spread of SARS and the escalation of the Iraq war. At the end of April, almost all domestic travel agencies suspended their business, while the hotel occupancy rate dropping to less than 7 percent. On April 20, the State Council canceled the weeklong May Day public holiday, which should have provided a good business chance for tourism. According to the estimation of China National Tourism Administration based on the situation of the second quarter, the country's tourism industry may suffer a total loss of 276.8 billion yuan (US$33.35 billion) in revenue in 2003, of which 203.7 billion yuan (US$24.5 billion) were from domestic tourism.

On June 24, Shigeru Omi, the WHO Western Pacific regional director, announced in Beijing that the WHO had removed Beijing from its list of SARS-infected areas and also lifted its travel advisory against the city with immediate effect, saying the risk for travelers to Beijing "is now minimum," and calling the development a "milestone" in the fight against SARS around the world.

In May, the CNTA carried out a series of measures to help local travel agencies to overcome their difficulties. One of these measures was to allow travel service companies to hold a certain amount of money as "quality deposit" until December 31, 2004. This means each of the agencies running inbound travel businesses can receive a fund of 400,000 yuan (US$48,193); those allowed to do both inbound and outbound businesses can receive 1 million yuan, and those involved in domestic tour packages can get 60,000 yuan. This helpful policy immediately drew praise from travel agencies across the country.

At the end of May, the CNTA issued a notice, announcing that local tours within a province might be resumed beginning from June, but cross-province tours were still banned. On July 8, the CNTA lifted all bans on travel business. Since then, China's tourism has been recovering step by step.

Hong Kong and Macao opened to individual tourists

On July 28, 2003, Hong Kong and Macao opened their doors to individual travelers from the mainland of China, with four cities in southern China's Guangdong Province, Dongguan, Jiangmen, Foshan and Zhongshan, as trial issues. Later on, the policy was also carried out in Beijing, Shanghai, Guangzhou, Zhuhai and Shenzhen. As a result, tourists from the Chinese mainland increased rapidly in Hong Kong and Macao, which offered a helping hand to the SARS-stricken tourism in both special administrative areas.

Then, came the weeklong National Day (October 1) public holiday, which, as usual, was the golden week for tourism. It boosted the recovering tourism industry effectively. It was reported that a total of nearly 90 million people were recorded as travelers during the week, which increased 11.5 percent than that of last year, their travel cost totaling 34.6 billion yuan (US$4.17 billion).

More tour destination countries competing for Chinese travelers

On April 1, CNTA approved India, the Maldives, South Africa and Sri Lanka as holiday destinations for Chinese citizens. Then in July, Cuba became the first nation in the western hemisphere to gain the Approved Destination Status from the Chinese government.

On October 20, Jordan was approved as a new tour destination for Chinese travelers. On October 31, China and 12 European Union nations signed the initialing of the Memorandum of Understanding on Approved Destination Status at the EU-China Summit in Beijing.

Recently, at the opening ceremony of the Second Ministerial Conference of the China-Africa Cooperation Forum, Chinese Premier Wen Jiabao announced that the Chinese government will grant eight more African countries the status of approved destination for outbound Chinese tourists. They are Kenya, Ethiopia, Seychelles, Mauritius, Zambia, Tanzania, Zimbabwe, and Tunis.

The number of Chinese travelers going abroad has been rising rapidly in recent years, and surpassed 16 million last year. The World Tourism Organization predicts that China will become the fourth largest tour destination country and the first tourist source nation by 2020.

Chinese tourism market opens ahead of schedule

On July 12, the government began to allow overseas investors to establish foreign-holding or wholly foreign-owned tourism companies in China, much earlier than the required World Trade Organization (WTO) commitment. This news immediately aroused the interests of overseas travel service tycoons.

Within less than a week after the issue of the regulation, JALPAK from Japan was allowed to set up the first totally foreign-funded travel agency in China.

On December 1, 2003, TUI China Travel Company, a joint venture between German-based TUI Group and China Travel Service, announced its establishment, with the visiting Germany Chancellor Gerhard Schroeder attending the opening ceremony. TUI China is the first overseas-controlled joint venture in China's tourism industry.

Last year, American Rosenbluth and China Comfort established a joint venture. American Express and China International Travel Service also followed suit. They aimed at China's business-travel market, which may bring in a total business of US$4 billion annually. Currently there are 13 Sino-foreign joint ventures and one foreign-owned travel agency in China.
 
(China.org.cn translated by Wang Zhiyong December 29, 2003)