NEW YORK -- The expected passage of the China trade bill -- in
tandem with a gradual economic recovery of the Asia region's
economy -- may signal the start of a travel boom and the end of a
period of the most affordable travel to Asia in memory, according
to Asia specialists.
When the Asian economic crisis of three years ago forced prices
down, tour operators warned that bargain prices would not last
Now Asia tour operators are predicting that the approval of the
China trade bill will boost business travel to China, forcing
prices to rise.
"Hotels and airlines will prefer to accept business clients
rather than the leisure market," said Benny Kokia, managing
director of New York-based Orient Flexi Pax Tours. "Definitely,
prices will pick up. This is the end of an era of three years of
very affordable travel to China."
Kokia said the fact that China may soon enter the World Trade
Organization is one of the reasons to expect a good season for
business travel to China.
"China is in the news, things are positive," he said. "Last year
we had the accidental bombing [by the U.S.] of the Chinese embassy
[in Belgrade, Yugoslavia]. This year, touch wood, the indications
from hotels and airlines are that they all expect small increases
Most operators agree that increased demand will force up
"Free trade is driving up business trade to China and driving up
occupancy, making hotels more expensive," said Bob Drumm, president
of Keene, N.H.-based TBI Tours. "It's a signal that the recession
is over in the Orient, and over the next couple of years we are
going to see an increase in prices to Asia."
The increase in business travel may push up leisure travel as
well. Bill Hastings, the Pacific Asia Travel Association's
director-Americas, said growth in leisure travel in Asia is often a
direct result of increased business travel.
"When the destinations receive business travel, discretionary
travel often follows. Travelers realize Asia is not as expensive as
they might have thought, and they find they love it and want to see
According to PATA figures, travel to Japan, the most popular
destination for U.S. travelers in Asia, declined in the past
decade, while the Philippines, Singapore, China and Taiwan have
been the fastest-growing destinations with Americans.
Much of the traffic, however, to the Philippines and Taiwan are
U.S. residents visiting friends and relatives.
But although it may not be good news for budget travelers,
business overall looks good for the industry.
"When the commercial business comes in, that's where the profit
is," said Bob Whitley, president of the U.S. Tour Operators
Association. "Prices may go up, but the positive exposure of China
to more Americans will make them want to go."
Travel to China from the U.S. was up 11.35% during the first
quarter of 2000, compared with the same period in 1999. Some
254,000 Americans visiting mainland China from January through
April, said Yaying Li, deputy director of the China National
Tourist Office in Glendale, Calif.
At this rate, Chinese tourism officials expect 2000 to beat
1999's total arrivals of 736,000 American visitors.
Li said the strong U.S. economy, combined with more effective
marketing from the Chinese tourism agency and the strengthening
business climate, has contributed to the increase in arrivals.
The CNTO does not have a breakdown of business vs. leisure
travelers, but Li said she believes the biggest increase is in the
business sector -- and suspects it will be boosted even further
with the passage of the trade bill.
On the leisure side, increased capacity on U.S.-China routes by
United and Northwest has led to more competition and lower package
prices, making China more attractive, particularly by increasing
the number of Americans who are interested in seeing the country on
FIT programs, she said.
The upward pressure on prices to China has not yet begun to show
in the marketplace, according to Hima Singh, president of Asian
Pacific Adventures of Los Angeles.
"Our prices are the same as last year," said Singh. He said
prices in China and India have held, and demand has picked up.
Along with other operators, Singh is experiencing especially
strong demand for China, India and Vietnam.