A Rise in Chinese Tourism

Robert Hsu, October 06, 2009

In this Issue:

China's National Day Holiday Boosts Tourism
China's Growing Domestic Tourists
The Expedia of China
Asia's Vastly Different Tourism Industries

China's Growing Domestic Tourists

Now, the boost in Chinese travel and tourism isn't just limited to the National Holiday celebrations. If you've been reading Asia Insider for a while now, then you know that Chinese have been spending more and traveling more in recent years.

I observed this firsthand over the summer when my family and I traveled to many of China's tourist destinations. Two of the popular tourist destinations that we visited included Xi'an, home to the fabled terra cotta museum, and Sanya, the Hawaii of the Orient.

In both cases, I was impressed by the amount of Chinese displaying their newly acquired buying power. The five-star hotels that we stayed at in both cities -- Xi'an Shangri La and Sanya Hilton Resort -- were brimming with Chinese clientele. That's a sharp contrast to just five years ago when the majority of customers at these high-end hotels were foreigners from the U.S. and other parts of Asia.

The increase in Chinese travel and tourism this year is a direct result of the country's $586 billion stimulus package, massive bank lending and huge savings pool. These three factors coupled together have enabled the Chinese to grow wealthy and continue to spend despite the global economic slowdown.

And, as I've observed, a lot of this spending is falling into the hands of the travel and tourism industry. In fact, the number of domestic tourists in China is expected to jump 10% this year. In the first six months of 2009, there were already one billion tourists in China, representing an 11.7% increase over the first six months of 2008. According to the China National Tourism Administration, China's domestic tourists are expected to clock in at more than 1.9 billion.

So, there's no denying that China's tourism industry is booming, and it's an incredible trend in the country today. And as investors, there are incredible ways to profit in some of China's leading travel companies. Let me tell you about one of my favorites now -- Ctrip.com (NASDAQ: CTRP).

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