The 13th Five-Year National Tourism Development Plan has been approved by the expert panel recently. Sources from the China National Tourism Administration (CNTA) say this plan will be determined as an important national special plan during the 13th Five-Year period.
Industry insiders indicate that tourism has become a powerful engine driving the economic growth. With impetus from consumption upgrading and policy prop-up, tourism consumption and investment boomed in the first half year, and the tourism market is expected to maintain steady growth in the second half year. As the industrial upgrading and integration advance, “tourism plus” business types enriched, and tailor-made tourism products are on the rise. Relevant listed companies in the tourism industry have also launched varied products targeting different customers.
Listed companies in tourism sector realize strong performances
The results of listed companies in the tourism sector for the first half year have been gradually disclosed. Wind’s statistics as of August 23 show that nearly 40 percent of listed tourism companies forecasted over 50 percent net profit growth in the first half year. Both the high growth of listed tourism companies and rapid development of the industry were attractive.
In the first half year, the tourism economy develops soundly, with both consumption and investment in the industry boom. According to the statistics released by the CNTA, China’s tourism market has expanded steadily in the first half year, continuing to outperform the macro economy. Specifically, domestic travel recorded 22,360 million person-times, up 10.47 percent from the same period last year; inbound and outbound travel witnessed 127 million person-times, up 4.1 percent. The gross revenue of tourism industry in the first half year amounted to 2.25 trillion yuan, increasing by 12.4 percent.
Listed companies in this sector also achieved strong performances. Among the listed companies that forecasted over 50 percent net profit growth for the first half year, Chongqing New Century Cruise Co., Ltd. (002558.SZ) and Xinjiang Yilu Wanyuan Industrial Investment Holding Co., ltd. (600145.SH) expect 10 times growth; Xi'An Catering Co., Ltd. (000721.SZ), Shenzhen Quanxinhao Co., Ltd. (000007.SZ), Guilin Tourism Corporation Limited (000978.SZ), Yunnan Tourism Co., Ltd. (002059.SZ), Xi'an Tourism Co., ltd. (000610.SZ) and Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. (000613.SZ) estimate 1 to 6 times growth; other five companies such as China CYTS Tours Holding Co., Ltd. (600138.SH) and Hna-caissa Travel Group Co., Ltd. also expect more than 50 percent net profit growth.
Officials from the CNTA indicate that the tourism industry has become a powerful engine that drives economic growth, promotes transformation and upgrading, and boosts innovation and entrepreneurship.
Data shows that China’s tourist number reached 4.12 billion person-times in 2015. Both outbound travel and demostic travel performed well. In the first half of 2016, the growth rate of domestic travel increased, while outbound travel declined. Listed companies involved in the operation of scenic spots achieved strong performance due to rapid development of domestic travel.
Take China CYTS Tours Holding for example, the company realized revenue and net profits attributable to shareholders of the listed company of 4,976 million yuan and 318 million yuan respectively, up 4.26 percent and 92.17 percent year on year. The company indicated that as the aoyou.com, a website under the company, sticks to the principle of “seek improvement in stability”, the company’s scenic spot business developed smoothly and the performance achieved rapid growth; the CYTS Shanshui Hotel expanded steadily, and its strategic investment has contribute continuous and stable profits to the company.
Analysts believe that in the context of consumption upgrading, tourists’ willingness for travelling and power of consumption enhanced. Besides, the improvement of transportation around scenic spots is also a driving factor. Therefore, listed companies involved in scenic spots realized rapid performance growth. Since 2014, the Huangshan Mountain, Mount Emei, Jiuhuashan Mountain, Guilin’s tourism and Fanjingshan Mountain have all benefited from the connection with high-speed railway, with significant increase in the tourist number of more than 15 percent in general.
Tailor-made tours are on the rise
Officials from the CNTA say that China’s tourism market is expected to maintain steady growth in the second half year thanks to the summer break, the National Day holiday and the Mid- Autumn Festival. And it will also promote the development of a number of sub-sectors.
Industry insiders indicate that varied tourism products have sprung up in the market, which target different customers. Various themes, such as rural tourism, sports tourism, medical cosmetology tourism, study and travel, tourism for providing the aged and cultural tourism, will embrace huge opportunities.
According to statistics from CNTA, there were 9,944 tourism projects under construction across the country in the first half with actual investment amount of 421.15 billion yuan, up by about 30.5 percent from a year earlier. Tourism products tend to have transformation and upgrading and vacation-oriented products, rural tourism and cultural tourism become popular investment points. Rural tourism completed investment with 122.13 billion yuan, representing a year-on-year growth of 62.3 percent.
Industrial insiders point out that urban residents love rural tourism out of pursuit of life quality and are pleased to experience natural environment and the lifestyle in countryside in recent years. Both investment and consumption in rural tourism, particularly rural tourism surrounding cities, see rapid development
Due to benefit from policies, sports industry enjoys rapid development and sports tourism gradually become popular in public life. Officials from Utour Group Co., Ltd. told China Securities Journal that price of sports tourism products is about 30 percent higher than that of normal tourism products, and match-watching products are different from the tourism destination and path of conventional products. This is part of reason why sports tourism products target high and medium-end consumer group.
As there are more and more tourism consumption population, there are new requirements for tourism products; hence, customized tourism products spring up. Hna-caissa Travel Group said to China Securities Journal that there are mixed routes and also combination with tickets of hot games and rare starred hotels. Demand for personalized customization of tourists occupies higher proportion. Officials from China CYTS Tours Holding indicated that customized products of aoyou.com service extensive groups and cover travel on business, wedding ceremony, training and rehabilitation with vacation.
In terms of cultural tourism, theme park industry develops rapidly. Among 6 AAAAA-grade scenic spots recently approved by CNTA, Fantawild tourist resort, built by Fantawild Holdings Inc. which is listed on the New Third Board, is a comprehensive leisure tourist resort with integration of theme park, hotel and catering, and entertainment.
Officials from CNTA expressed that China’s tourism economy is expected to keep booming in the second half and a series of tourist activities promoted by tourism regulators are expected to bring sustainable and stable development of inbound tourism. On the whole, national tourism investment will keep rapid development trend, the leading position of private investment will be more solid, investment in West China will accelerate, and tourism products tend to have transformation and upgrading. Vacation-oriented products, rural tourism and cultural tourism become popular investment points.
Translated by Vanessa and Adam
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