China's tourism industry is one of the fastest-growing industries in the national economy, and is also one of the industries with a very distinct global competitive edge.

The total revenue of China's tourism industry reached USD 67.3 billion in 2002, accounting for 5.44% of the GDP. It dropped, largely due to Sars, to USD 59 billion in 2003. Nevertheless, for areas rich in tourism resources, tourism has become the main source of tax revenue and the key industry for economic development.

Domestic Market: China's domestic tourism market makes up more than 90% of the country's tourism traffic, and contributes more than 70% of total tourism revenue. In 2003, domestic tourists reached 870 million, which is 3.6 times for the same period in 1985. Domestic tourism revenue was USD 41.6 billion. The five-hours-per-week work scheme, begun in 1995, and the long vacation scheme, begun in 1999, not only increased leisure time for the Chinese people, but also promoted changes in lifestyle and modes of expenditure of the people. This has spurred market demand in domestic tourism and led to its prosperity.

Hotel: Driven by the flourishing tourism industry, China's tourist hotel sector is expanding rapidly. At the end of 2003, China had a total of 10,093 tourist hotels and more than 820,000 rooms. 773 of these tourist hotels were foreign-funded. The number of foreign-funded (inclusive of Hong Kong, Macau and Taiwan investments) four- and five-star tourist hotels made up 26% and 30.02% of the national total, respectively.

Travel Agencies: In 2003, there were a total of 11,522 travel agencies in China, among which, 1,349 were international ones and 10,203 were domestic ones. While overall tourism market concentration rose, there was a drop in the market position of the traditional three key travel agencies. As competition heightened, China's tourism industry on the whole, had begun to start earning low profits, even while it was expanding its scale of operations.

Tourist Attractions: Currently, there are approximately 15,000 natural, cultural and man-made places of attraction which are above county level. Presently, Hong Kong investors are the main participants in the establishment of tourist attractions in China. In 2001, Sichuan became the first province to propose renting out the operation rights of 10 scenic areas to foreign investors.

This guide is broken into four parts:

• Regulatory Environment
• Market Analysis
• Domestic Market
• Analysis on Industry Sectors

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