September 4, 2013

How Will China’s New Tourism Law Impact Your Business?

Tourists take a photo near the Eiffel Tower in Paris. (AFP)

Tourists take a photo near the Eiffel Tower in Paris. (AFP)

If you talk to anyone in China’s tourism industry today, the top item of discussion is the upcoming implementation of the new Tourism Law, which is set to begin on October 1st, 2013. The law is designed to protect the rights of Chinese consumers as they travel, covering both domestic tourism within China’s borders and outbound tourism, and can be viewed in its entirety in English here.

Chinese tourists have long complained about poor experiences and deceptive practices during group tours, and this law is designed to combat tactics such as unannounced changes to the itinerary, coercion to shop in illegitimate or substandard shopping locations, which often carry either counterfeit goods or products priced above the market rates, and unexpected add-on fees for visiting certain destinations.

Many Chinese tour operators (especially on the low end of the price spectrum) sell a portion of their package tours at a loss, expecting to boost their margins via commissions from shopping, as well as add-on fees for popular destinations during the trip. As a result, many trip prices are extremely affordable, making group travel an attractive option for Chinese travelers, due to the high discrepancy between group travel prices and the equivalent cost for self-purchase.

Depending on whom you ask, this law will either completely upend the Chinese tourism industry and change trip prices, tour guide behavior and itinerary norms—or it will have no effect whatsoever. The reality will likely fall somewhere in between.

As is typical with most new laws in China, many potentially affected parties are taking a wait-and-see approach to evaluate how stringently the law will be upheld and how exactly the government will enforce the law. Often the government will make an early example out of someone in violation of the law—most tour operators are working hard to make sure they are not the chosen sacrificial lamb.

No matter the reaction from the government, one thing is clear: many widely accepted practices in the Chinese tourism industry will change to some degree and the new regulations will increasingly favor the consumer, with respect to overall satisfaction with travel experiences.

The law goes into effect on the first day of China’s October National Holiday, a mandatory weeklong break that is a traditional driver of outbound travel and a peak shopping season for Chinese tourists.

On September 10th, Jing Daily and China Luxury Advisors will offer an in-depth interpretation of the new tourism law, as well as reactions from Chinese tour operators and tour guides and practical recommendations for retailers, attractions, and hotels, including expected changes from tour operators, effects on the commission model, changes to itineraries, policy changes for retailers and practical tips on how to react to these changes and safeguard relationships with Chinese customers and the Chinese travel trade.

We will also be hosting a live webinar for those who can not join us in New York.

Here are the details for both events:

September 10, 2013: For those in New York, we are hosting an event entitled Best Practices for Attracting and Maintaining Chinese Tourists, where we will provide an overview of the law and our interpretation and recommendation, as well as review best practices for attracting and maintaining Chinese tourists and preview our upcoming research on attracting Chinese tourists. Click here to book tickets.

September 25, 2013: We will host a webinar to discuss the new tourism laws and our recommendations, as well as review best practices for attracting and maintaining Chinese tourists and preview our upcoming research on attracting Chinese tourists. Book tickets here.

For questions on either event, please contact renee@chinaluxuryadvisors.com.

[UPDATE: The Breakfast Briefing has been postponed.] 


Renee Hartmann is co-founder of China Luxury Advisors, a boutique consultancy that helps luxury brands and retailers to develop China-related strategies, ranging from market entry to social media to attracting, converting, and retaining Chinese tourists. Renee has been focused on the China market since 2000, with a specialty in understanding and selling to the emerging Chinese consumer. She has worked as a brand owner, retail operator, consumer researcher, public relations specialist and market entry strategist in China. Follow China Luxury Advisors on Facebook and Twitter.

Business & Finance / Policy
Tag: china, china luxury, Luxury, policy... , More
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