How Will China’s New Tourism Law Impact Your Business?

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Tourists take a photo near the Eiffel Tower in Paris. (AFP)


Posted on September 4, 2013


If you talk to anyone in China’s tourism industry today, the top item of discussion is the upcoming implementation of the new Tourism Law, which is set to begin on October 1st, 2013. The law is designed to protect the rights of Chinese consumers as they travel, covering both domestic tourism within China’s borders and outbound tourism, and can be viewed in its entirety in English here.


Chinese tourists have long complained about poor experiences and deceptive practices during group tours, and this law is designed to combat tactics such as unannounced changes to the itinerary, coercion to shop in illegitimate or substandard shopping locations, which often carry either counterfeit goods or products priced above the market rates, and unexpected add-on fees for visiting certain destinations.


Many Chinese tour operators (especially on the low end of the price spectrum) sell a portion of their package tours at a loss, expecting to boost their margins via commissions from shopping, as well as add-on fees for popular destinations during the trip. As a result, many trip prices are extremely affordable, making group travel an attractive option for Chinese travelers, due to the high discrepancy between group travel prices and the equivalent cost for self-purchase.


Depending on whom you ask, this law will either completely upend the Chinese tourism industry and change trip prices, tour guide behavior and itinerary norms—or it will have no effect whatsoever. The reality will likely fall somewhere in between.


As is typical with most new laws in China, many potentially affected parties are taking a wait-and-see approach to evaluate how stringently the law will be upheld and how exactly the government will enforce the law. Often the government will make an early example out of someone in violation of the law—most tour operators are working hard to make sure they are not the chosen sacrificial lamb.


No matter the reaction from the government, one thing is clear: many widely accepted practices in the Chinese tourism industry will change to some degree and the new regulations will increasingly favor the consumer, with respect to overall satisfaction with travel experiences.


The law goes into effect on the first day of China’s October National Holiday, a mandatory weeklong break that is a traditional driver of outbound travel and a peak shopping season for Chinese tourists.


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