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May 19, 2014

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City comes off overseas travelers’ itinerary

SHANGHAI residents continue to flock overseas for holidays, but the number of visitors coming in the opposite direction has been on a steady decline in the three years since the 2010 World Expo.

Last year, the city hosted 7.57 million visitors from overseas, the Shanghai Statistics Bureau just reported. That figure was down 5.4 percent from 2012 and translated into a 4.4 percent decline in tourism spending to about US$5.34 billion.

By contrast, the number of Shanghai residents traveling offshore last year rose by a quarter to 6.87 million. About a third of that outbound tourism involved packaged tours.

So why are overseas tourists shunning Shanghai?

Travel industry analysts cite a number of possible reasons including political disputes and the global economic downturn.

Then, too, China is no longer the cheap destination it once was for overseas travelers, according to Hou Zhigang, associate professor of tourism at Fudan University. That’s particularly true for visitors from Asian neighbors who once viewed China as a bargain destination.

Not only have hotels and restaurants increased prices, but China’s first tourism law, which came into effect on October 1, has pushed up cost of packaged tours. The law bans practices such as coercing visitors to shop at certain stores or charging for activities not originally announced as part of the itinerary, Hou said.

As a result, tour operators who relied heavily on extra charges and kickbacks from shopping spots, have raised prices by as much as 50 percent.

Travel agencies need to rethink their promotion strategies, said Hou.

Sightseeing has long been the major promotion point for travel agencies in the city, but many overseas visitors don’t want to spend their time being carted from one tourist spot to the next. They prefer more leisure holidays with time on their own, he said.

Japanese and South Koreans remain the largest group of foreign tourists, but political considerations have affected those markets, particularly tensions arising from an islands dispute between Japan and China in the South China Sea.

Europeans and Americans tend to visit Shanghai more for business reasons.

The Shanghai China Youth Travel Service, a local travel agency, said the number of overseas tourists it handled last year fell to a third of the 2010 peak, with numbers of visitors from Japan falling the most.

Shanghai has traditionally attracted visitors who were born in the 1970s  or earlier. Younger people haven’t shown the same keen interest in traveling to China. The tourist industry needs to retool its marketing strategies to appeal to the young crowd, Hou said.

Inbound travelers staying overnight in Shanghai stayed an average of 3.3 days last year and spent an average US$854.

Visitors to Shanghai peaked at 8.5 million in 2010, the year of the World Expo, before starting to decline. Last year, visitors from Hong Kong and Macau dropped 5.5 percent to 598,400; those from Taiwan fell 3.9 percent to 999,700; and those from countries abroad plummeted 5.6 percent to about 6 million, the statistics bureau said.

Promotion campaign

The Shanghai Tourism Administration is trying to reverse the decline by stepping up overseas advertising.

It sponsored a “visit Shanghai” campaign at a department store in Seoul in late April that included a photography exhibition, a lucky draw and folk music performances. Similar campaigns will be held in other countries this year.

Meanwhile, major Chinese airlines have complained that the new policy allowing visitors to enter the city for 72 hours without a visa has fallen short of expectations.

Pudong International Airport, where about 1,500 passengers transfer to other flights every day, reported only about 50 transit passengers a day — mostly business travelers — applied for visa-free entry, according to Ma Xulun, general manager of China Eastern Airlines.

The policy, which came into effect for major Chinese cities on January 1, 2013, is open to citizens from 45 countries.

Amid fanfare, China Eastern, Air China and China Southern launched special travel packages to allow overseas transit passengers to make a quick stopover in major Chinese cities, but few took the bait.

Ma said that 72 hours is too short for a stopover.

“If passengers could travel around the Yangtze River Delta region and spend a few nights there, or even take a train to Beijing, more visitors would be interested,” he said.

Furthermore, the current policy requires foreign travelers to stay in the city of transit and leave from the same port.

The policy needs to be more flexible, according to Ma.

Of the 15,000 airline passengers who have taken advantage of 72-hour, visa-free entry since the policy began, 2,300 were Americans, followed by Australians and Germans, according to the Shanghai Exit and Entry Frontier Inspection.

Officials said the figure is expected to grow with the development of the Shanghai pilot free trade zone and with the opening of the Shanghai Disney Resort in 2015.

Still, it’s not all bad news for Shanghai tourism. The statistics bureau reported the number of inbound visitors is starting to show signs of a pickup. In the first quarter of this year, the city received 1.82 million offshore visitors, up 3.4 percent from a year earlier.

The tourism industry will be holding its breath to see whether that trend holds.

And tourism agencies can take heart from outbound business. For the 6.87 million Shanghai residents who traveled offshore last year, the top destinations were Thailand, South Korea, Taiwan, Hong Kong and Japan.


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