The “all-for-one tourism” initiative, as a long-term national strategy and policy, will be further strengthened and solidified, and relevant authorities will increase policy and financial supports for all-for-one tourism, according to the all-for-one tourism development report 2017 released by China National Tourism Administration (CNTA) on August 3.
CNTA chairman Li Jinzao said that the traditional tourism model based on single tourist attraction cannot meet the development needs of modern tourism. China should accelerate the shift to all-for-one tourism model and promote the development of the modern tourism industry.
Analysts expect that 2017 will be a year for the “all-for-one tourism” initiative to implement. China has now announced over 500 counties, cities and provinces the demonstration areas for all-for-one tourism. If each of them has an average investment of about 2 billion yuan, the market will reach one trillion yuan in the future.
All-for-one tourism becomes investment hotspot
The report shows that in 2016, the 500 national all-for-one tourism demonstration areas received a total of 1.8 billion tourists from home and abroad, accounting for 40.5 percent of the total tourists around the country, up 20 percent from a year earlier, bringing a total tourism revenue of 1.76 trillion yuan, up 28 percent from a year earlier.
Investment in all-for-one tourism has expanded against trend, and has become a hot area for social investment. According to statistics, all these demonstration areas added 7,043 projects, with an actual investment of 324.9 billion yuan, accounting for 25 percent of the total tourism investment. Private investment in all-for-one tourism reached 111.8 billion yuan, accounting for 34.4 percent of the total tourism investment.
Tourism infrastructure, tourism public service facilities, tourist attractions and hotels are main areas of investment. Investment in recreational resort has increased significantly. The growth rate is much higher than that in traditional sightseeing tourism. Most investment concentrates on business travel, parent-child tourism agricultural tourism and industrial tourism, showing a diversified and compound development trend.
Multiple tourism enterprises report growth in mid-year report
Data from Wind Info shows that as of August 3, among the 33 listed companies in CITIC catering and tourism sector, 22 have announced or made projections on their 2017 interim earnings. Beijing Orient Landscape & Environment Co., Ltd. (002310.SZ) has released its mid-year report; Lijiang Yulong Tourism Co., Ltd. (002033.SZ) and Huatian Hotel Group Co., Ltd. (000428.SZ) have released preliminary earnings estimate. Another 19 companies have made earnings preannouncement.
Among the 19 listed tourism companies that have made earnings preannouncement, based on the upper limit of growth forecast for net profit, 13 expected growth in earnings; while 6 expected decline. 8 companies, including BTG Hotels (Group) Co., Ltd. (600258.SH), Guilin Tourism Corporation Limited (000978.SH), Beibu Gulf Tourism Corporation Limited (603869.SH), Shenzhen Tempus Global Business Service Holding Ltd. (300178.SZ), expected a growth of over 100 percent in mid-year report. BTG Hotels forecast a year-on-year increase of 1600-1650 percent in net profit for the first half of this year. Guilin Tourism Corporation forecast a year-on-year increase of 527 percent in net profit to 29 million yuan. Shenzhen Tempus Global Business Service forecast a year-on-year increase of 90-120 percent in net profit to 148-172 million yuan.
As for the reason for earnings growth, Guilin Tourism Corporation said that the number of tourists it received in the first half of this year increased by about 24 percent over the same period last year. Its operating revenue added up about 28 percent year on year, and its investment income added about 6.99 million yuan.
5 companies, including Utour Group Co., Ltd. (002707.SZ), Guangzhou Restaurant Group Co., Ltd. (603043.SH), Xi'an Qujiang Cultural Tourism Co., Ltd. (600706.SH), forecast a growth of 15-50 percent in mid-year report. Utour Group expected its net profit at 75.2503 -113 million yuan, a year-on-year increase of 0-50 percent. Songcheng Performance Development Co., Ltd. (300144.SZ) expected its net profit at 497-562 million yuan, a year-on-year increase of 15-30 percent.
Under the context of the “all-for-one tourism” initiative, Anhui Jiuhuashan Tourism Development Co., Ltd. (603199.SH) recorded a growth in earnings in the first half of this year. The company said in its mid-year report released on July 14 that it gained operating revenue of 245 million yuan in the first half of this year, an increase of 12.22 percent year on year; the net profit attributable to shareholders recorded 59.5415 million yuan, an increase of 17.28 year on year.
Jiuhuashan Tourism Development noted in the mid-year report that 2017 is an important year for the implementation of the 13th Five-Year Plan as well as for the deepening of the supply-side structural reform. China's tourism market has steadily expanded, and taken the lead in economic growth. In the first half year of 2017, driven by industrial policy like “mass tourism” and “all-for-one tourism”, the tourism industry continues to see new hot spots. The industry continues to transform. With the rapid development of the Internet and transportation systems, tourist’s demands are become more high-end, differentiated and personalized. Owing to the good momentum of the tourism industry and he rapid development of the transport network, Jiuhua Mountain and the surrounding areas of Chizhou city where Jiuhua Mountain is located are embracing important development opportunities.
Low-valued scenic spots draw attention
As early as September 2015, the CNTA came up with the idea of “all-for-one tourism”, aiming to promote the tourism industry to upgrade from “tourism in scenic spot” to “all-for-one tourism”. The CNTA said that counties, cities or provinces that are selected as all-for-one tourism demonstration areas will have the priority to get investment support within central and local budget.
Consumption upgrading has driven the tourism industry into a rapid development period. Some securities companies said in their research report that excursions, self-driving tour and leisure tour have become first choices for people’s short vacation. Rare scenic spots or those with cultural background can better meet tourists’ needs. With the gradual improvement of high-speed rail network, the scope of excursions has expanded. And traffic improvement will continue to make more people travel around.
Analysts said that with various bullish news in consumption upgrading, policy support and the supply-side reform, the tourism industry is expected to continue to boom. In the short run, they are bullish on scenic spots companies that are involved in the mixed-ownership, have low valuation and better-than-expected earnings in the short run. In the long run, they are bullish about leading tourism companies that record stable earnings and are able to integrate resources and industries. They recommend focusing on listed companies like China International Travel Service Corporation Limited (601888.SH), China CYTS Tours Holding Co., Ltd. (600138.SH), Emei Shan Tourism Company Limited (000888.SZ) and Huangshan Tourism Development Co., Ltd. (600054.SH).
(Translated by Coral Zhong)
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