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| Saturday, February 10, 2007 |
| China eases regulations that curb operations of foreign travel companies |
China is to ease regulatory restrictions that prevent foreign travel companies from operating in the country as a part of the Chinese government's effort to create a friendlier environment for foreign players.
Shao Qiwei, director of the China National Tourism Administration (CNTA), had announced in January 2007 that foreign travel agencies would be permitted to set up branch offices nationwide from July 1, 2007, as a part of a commitment the country has made to the World Trade Organisation (WTO) to open the tourism sector by 2007.
China's move has been welcomed by both travel experts and foreign travel companies.
Setting up of branch offices had been forbidden to foreign companies except in the cities of Beijing, Shanghai, Guangzhou, Shenzhen and Xi'an.
"The deregulation is meaningful. The foreign companies could strengthen networks, reputation and brand awareness in China," Li Mingde, senior researcher with the Tourism Study Center at the China Academy of Social Sciences, remarked.
"This means that travel industry will then be fully open six years after China's accession to the WTO, as scheduled," according to Liu Zinan, director of sales and account management with Hogg Robinson Group (HRG) China.
HRG, one of the top-three business travel agencies worldwide, entered China in 2004, setting up the only foreign-funded travel management company in the nation with a majority stake when it joined hands with Shanghai Jinjiang International Hotel Group.
However, there are still hurdles on the way to local business expansion. Approval of air ticketing licence is one of them. To run a travel business in China, international travel agencies need air ticketing licences besides travel agency licences.
The General Administration of Civil Aviation (CAAC) has given ticket licensing rights to the China Cargo Transportation Association. Under the current regulations, full ticketing licences can only be awarded to travel agencies that are wholly or mostly Chinese-owned.
"This means that we can neither get tickets for domestic flights nor can we conduct business there even if we set up branch in a city until we rent the air ticketing licence from a local company or take a partner," HRG's Liu Zinan explains.
Yet another problem is the computer reservation system. TravelSky, a monopoly with major domestic State-owned air carriers as equity holders, is the only entity that the CAAC permits to issue tickets for travel agencies and air ticketing companies.
The international computer reservation system -- known as Global Distribution Systems (GDS), which is believed to be more technologically advanced -- is not permitted to issue tickets.
"This is a big problem for international travel agencies because we have a range of well-developed technical systems, such as highly customised self-service reservation engines, traveler tracking and reservation quality checks that could be interfaced with the GDS, but not TravelSky," Liu says.
Most international travel agencies are developing local systems that could be interfaced with TravelSky, but the best solution is deregulation of the CRS sector, according to Liu.
The outbound tourism sector is also a restricted area for international players in China.Labels: Travel |
| posted by a correspondent @ 11:32 PM |
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