Incentive Travel in China's Tourism Industry

BUSINESS TOURISM AND EVENTS
INCENTIVE TRAVEL IN CHINA’S TOURISM INDUSTRY
Student Number: 20011763
Module Leader: Adrienn Sandor
6BUS1218 Business Tourism & Events
Word Count: 1986
Summary
The incentive travel in the tourism industry has been one of the biggest contributors to China's domestic economy since the market reforms of the early 1980s. Since then, the country has recorded marked increases in tourism revenues until late 2019, when COVID-19 struck. China's tourism industry is yet to reach 2019 levels, although the resumption of economic activity globally is expected to boost both tourist numbers and revenues generated. This report will discuss the tourism industry in China by first providing an overview of market size and a brief historical overview. It will then analyze the current state of China's tourism industry. Afterward, the report will analyze the significant tourism industry trends in the country, including a discussion of the impact of COVID-19. This section will be followed by a stakeholder analysis of the tourism industry in China as well as a discussion of the economic impact of the sector on the country’s economy. Moreover, the report will also provide recommendations for future development and investment opportunities.
Table of Contents
Definitions of The Sector, Overview of Market Size, Brief Historical Overview…..…..….…..4
Analysis of The Current State of The Chosen Sector…………………….…….……………….5
Analysis of Industry Trends……………………………………………………………………..6
Stakeholder Analysis…………………………………………………………………………….8
Economic Impact of The Tourism Industry………………………………...……………………9
Recommendations; Future Development and……..……………………………………………...9
Conclusions……………………………………………………………,………………………..10
References…………………………………………………………………………………….....11
Definitions of The Sector, Overview of Market Size, Brief Historical Overview
Incentive travel refers to trips intended to motivate, engage, and recompense business associates or staff. This essay will discuss Chinese tourism in the context of incentive travel. Tourism has been one of the biggest contributors to China's domestic economy since the early 1980s when the country opened its economy. Since the market reformation, the country has vigorously promoted its inbound and outbound tourism segments to earn foreign exchange. The country’s tourism industry has recorded marked growth year-over-year owing to the country's numerous tourist attraction sites and the expansion of support infrastructure, including transport, accommodation, and entertainment. The country is one of the most visited countries globally: the country is home to 55 World Heritage Sites and abundant natural, historical, and cultural sites (Ren, 2022). China's rugged terrain and long history have left a great number and variety of tourist attractions across the country, such as the Great Wall of China, the Yangtze River, the Forbidden City, the Temple of Heaven, the Terracotta Army, the Silk Road, West Lake, the Yellow Mountains, the Li River, and the Potala Palace among others.
The history of China’s tourism industry can be traced back to 1923, when the first travel agent was opened. However, the sector developed significantly in 1949 when the People's Republic of China (PRC) was established. Initially, tourism was limited to diplomatic work, but the industry recorded its first marked growth after 1978 when the country's borders opened to foreign visitors. The tourism industry became a primary source of foreign exchange towards the end of the 20th century when the growing middle class started developing a traveling culture (Dai et al., 2017). Moreover, the expansion of local and international airline traffic as well as support industries, made foreign travel more convenient. The country had seen its tourist numbers grow rapidly over the last two decades, particularly between 2008 and 2019, when China became an attractive destination for incentive travel programs.
Analysis of The Current State of Incentive Travel
The remarkable development of incentive travel in China is largely underpinned by the steady rise in the country's prosperous middle-class population, who are increasingly interested in travel experiences. Urban tourism in the nation marked the participation of 4.471 billion individuals, while rural tourism captivated 1.535 billion tourists in 2019. Notably, these numbers illustrate an encouraging 8.5% and 8.1% rise, respectively, in contrast to the figures from the preceding year. This growth suggests a dynamic shift in travel preferences and a surge in interest toward incentive travel.
In the context of China's booming economy, its tourism industry has rapidly emerged as one of the most closely scrutinized inbound and outbound markets worldwide. It's worth noting that this thriving sector is not merely a result of the nation's economic progress but a driving force contributing significantly to its GDP.
Prior to the unforeseen disruption caused by the COVID-19 pandemic, China documented as many as 6 billion domestic trips. These trips generated a staggering 6.6 trillion yuan in revenue in 2019, a figure that significantly outpaced the number of trips or revenue generated a decade earlier. To put this into perspective, the per capita consumption of domestic tourism in China amplified from $160.59 in 2008 to $225.11 in 2019, per data from the World Travel & Tourism Council (2023). This substantial escalation underscores the escalating interest in travel experiences, particularly incentive travel, among the Chinese populace.
Globally, China has secured its position as the leading tourism source market. In 2016, expenditures by local tourists grew by an impressive 12% to reach an enormous total of $261 billion (Zhang, 2022). These figures not only underline the economic power of Chinese tourists but also emphasize China's dominance in the incentive travel sector on a global scale.
The domestic tourism industry within China has also been burgeoning. As evidence, domestic tourism in 2019 accounted for 6.01 billion tourists, marking a robust growth rate of 8.4% compared to the previous year (Interesse, 2022). This booming domestic travel industry, along with the country's open stance towards international tourism, offers a promising outlook for the incentive travel sector in China.
Additionally, the rapid expansion of China's incentive travel sector is complemented by the nation's robust infrastructure, extensive transportation network, diverse tourist attractions, and welcoming hospitality industry. This provides a supportive environment for businesses to engage their employees and stakeholders with remarkable travel experiences, thereby ensuring the continued growth and evolution of the incentive travel sector in the years to come.
Analysis of Industry Trends
Technology's transformative impact on China's tourism industry, and by extension, its incentive travel sector, is undeniable. Advents in technology, including augmented reality (AR), virtual reality (VR), and artificial intelligence (AI), have revolutionized the tourist experience by enabling immersive virtual tours. The COVID-19 pandemic has served as a catalyst for digitizing the tourism industry, leading to an upsurge in the use of virtual technology by tourist attractions such as zoos, theme parks, and galleries.
For example, Beijing's Forbidden City, one of the most iconic landmarks in the country, regularly organizes digital exhibitions, enabling tourists to enjoy a deeply immersive experience of historical artifacts without physically being present. Likewise, the Palace Museum has introduced a digital gallery, allowing visitors to virtually explore images of artifacts that are too delicate and ancient to be displayed publicly (Nyíri, 2022).
Innovation has also reached the realm of tour guides, with destinations like Changsha in Hunan province deploying intelligent robot tour guides. These robotic guides not only introduce visitors to the site but also entertain them and respond to their queries. This interweaving of technology into the fabric of tourism is expected to further extend its reach into incentive travel, transforming it into a more engaging and interactive experience.
On the environmental front, a rising wave of activism advocating for increased awareness about the environmental impact of tourist activities has sparked the emergence of ecotourism as a popular trend. More middle-class tourists are turning towards sustainable incentive travel, favoring eco-friendly destinations that promise a minimized environmental footprint (Zeglen et al., 2014).
One example of this is the move from China's Ministry of Culture and Tourism which showed its rising interest in ecotourism activities such as hiking, camping, and bird-watching among both local and international tourists. East China's Zhejiang province, for instance, has expanded its ecotourism sites to 21 in response to this increasing demand for diverse ecotourism experiences.
In an effort to bolster this trend, the government has embarked on constructing tourism-specific roads, facilitating easy access to ecotourism destinations like wetland parks, nature reserves, cultural facilities, scenic spots, rural villages, and forest parks (Ricci & Holland, 1992). This strategic opening of rural provinces, where most ecotourism sites are located, has accelerated the development of China's green tourism industry. Despite the country's carbon footprint challenges, concerted efforts have been made to improve forest coverage to over 23%, contributing significantly to the world's total vegetation growth.
Another emerging trend in China's tourism sector, including incentive travel, is the establishment of numerous tourism associations dedicated to market development. An example of this trend is the China Tourism Academy (CTA), a conglomerate of academic and administrative tourism divisions. The CTA, along with its 12 independent subsidiaries, boasts over 10,000 members comprising large-scale tourism groups, state tourism professional associations, tourism institutions, tourist attraction sites, and other entities linked to the tourism industry.
These specialized institutions conduct comprehensive research into various aspects of China's tourism industry, ranging from marketing strategies, impact analysis, and vocational education (Azevedo et al., 2018). As a representative body for civil tourism in the country, the CTA is instrumental in international communication between China and foreign tourism markets. It also serves as a crucial link between the government, the tourism market, and private enterprises, driving the development of the country's tourism industry and, consequently, the incentive travel sector.
Aside from those mentioned above, China's tourism industry, which encompasses the rapidly growing incentive travel sector, is a prominent pillar of the nation's economy. Projections indicate the sector's contribution is ...