China Power

For National Day, China Cracks Down on Tourism Industry

In time for the National Day holiday, Beijing is getting tough on a corrupt tourism industry.

Tuesday marked the 64th anniversary of the founding of the People’s Republic of China and one of China’s biggest holidays: National Day.

Commemorating the event, last Sunday, Yu Zhengsheng, chairman of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), addressed a reception for the upcoming holiday in Beijing. In his speech, delivered to 2,800 representatives from Hong Kong, Taiwan, Macau, and other overseas Chinese communities, he noted that China’s central government will continue supporting both Hong Kong and Macau’s development and will continue to encourage the peaceful development of relations with Taiwan.

National Day is one of China’s most important holidays and is considered one of the country’s two “golden weeks,” the other being China’s Lunar New Year Holiday. The term "golden weeks" refers to the fact that citizens usually get three days off in addition to a long weekend, giving them a full week of vacation. Most Chinese people take this time to travel, whether to see their family and visit their hometowns, or simply for their own leisure.

With many of China’s 1.3 billion people traveling across the country at the same time, things can get very hectic, very quickly. And if massive crowds, traffic jams and waiting in line after line to see tourist sites like The Great Wall weren’t bad enough, tourists also have to watch out for opportunistic travel agencies who want to rip them off.

In fact, China’s National Reform and Development Commission just recently released a report (Chinese link) which has exposed some of the bad practices that Chinese travel agencies, tourist hotels and other tourism-related businesses have been implementing in order to maximize their profits. Such companies have cheated customers by raising prices unfairly, faking discounts, forcing customers to purchase products on shopping trips as part of the tour, and signing monopoly agreements with other companies to dominate the market. The NDRC even has a hotline for tourists to call if they feel they have been cheated by a company while traveling during the National Day holiday break. Most of these issues have occurred with agencies located in some of China’s hottest southern tourist spots, including Hainan, Sanya and Yunnan province’s Lijiang City. In Hainan and Yunnan province alone, the NRDC report mentioned that 39 companies have been fined 18 million yuan (US$2.94 million).

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Fortunately, in response to these problems, China’s central government has decided to implement new tourism laws effective this week, which should address some of these issues and help upgrade the tourism industry overall. The new laws will ban tourism groups and agencies that offer tours at rock bottom prices only to recoup their losses by forcing customers to spend their money on shopping trips or other hidden fees. The laws will require these agencies who use such “zero- or negative-fare tours” to be more transparent with the costs of their packages and include the full price of the tour upfront to prevent tricking customers into paying more than they bargained for.

Aiming to provide some consumer protection for tourists traveling to and within the country, these new tourism laws will help address some of the issues between tourists and agencies, crack down on “black” or illegal tourism services, and enforce safety measures at scenic sites to keep tourists’ behavior in check. This is particularly important since there has been an increase in complaints about general Chinese tourist behavior, not only overseas, but at home as well.

Despite the advantages that these laws will bring for travelers, many tourists are skeptical about how they will be affected while traveling over the National Day holiday break. Not surprisingly, travel agencies also have mixed opinions about the laws. Some indicate that ticket sales and bookings have not been affected, however others have noted that having to raise tour package prices to reflect their real cost has resulted in significant drops in demand. For example, He Shixin – an assistant to the president of Shenzhen’s Junnan International Travel Service – told The China Post that bookings to Taiwan with her company have decreased 50 percent compared to 2012.

Considering the NDRC report’s findings, reforms addressing China’s increasingly corrupt tourist industry are sorely needed. And it is better to have reforms implemented sooner rather than later, before the industry expands too much for the government to handle. The government couldn’t have chosen a better time to implement these laws. Besides currently being one of China’s busiest traveling seasons, analysts expect China’s tourism industry to increase by 16 percent annually for the next few years.

Elleka Watts is an editorial assistant for The Diplomat.