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Thu 15 Jul 2010 04:00 AM

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A view from Beijing

Bench Events chairman Jonathan Worsley reports from the 10th Global Travel and Tourism Summit and explains why China's market has unrivalled potential for growth and profits.

A view from Beijing

Bench Events chairman Jonathan Worsley reports from the 10th Global Travel and Tourism Summit and explains why China's market has unrivalled potential for growth and profits.

If first impressions count, then few experiences match those offered by Beijing International Airport. Gateway to what will become the biggest global economy, it is the largest and most advanced airport building in the world. It claims to be technologically unique, and without peer in terms of passenger experience, operational efficiency and sustainability. Its aerodynamic roof and quintessential dragon-form symbolise the money now flooding into China and demonstrates the belief of the Chinese people: we are better than anyone else.

This optimism was matched in almost perfect harmony by delegates at the recent 10th Global Travel and Tourism Summit, where the theme was ‘reaching new frontiers'.

Listening to the speakers and talking to the attendees, it became clear that China is going to be a big player in travel and tourism. The Chinese Government understands that its economy cannot solely rely on manufacturing and exports and has recently placed travel and tourism as a strategic pillar of the economy.

There were discussions covering the reordering of tourism, opportunities, technology, sustainability, people, experiences and innovation. The figures, charts and statistics were eye-watering and here I'm highlighting two areas in particular that perhaps best demonstrate why China will become so dominant.

Belief in growth

Tony Tyler, CEO of Cathay Pacific and president of IATA, gave his perspective on the state of the industry, acknowledging that we are still in the middle of a "difficult time" and that the international economic climate remains "uncertain and spooked". However, Tyler highlighted the fact that we have globalisation to thank for bringing people across the world closer, which has led to an insatiable appetite to travel. But in a thinly-veiled attack on governments and regulators (particularly those in Europe), Tyler warned that we must work closer together to bring about positive change to the way the travel industry, and aviation in particular, operates; for example, making travel easier, and more convenient, cost-effective and pleasurable.

"Too often, travel infuriates rather than inspires," he protested.

Citing a lack of continuity in global airport security, airport expansion rejections and poor air traffic control in Europe, Tyler called upon authorities to do more to make travel hassle-free. Criticising Europe, he had nothing but praise for China: its eagerness to impress and belief in growth.

"The outlook in Asia is very different to that in other parts of the world" he asserted.

And it's an argument that is difficult to disagree with. China, said Tyler, exemplifies the mantra that development is a catalyst for growth:

• The number of civil aviation routes in the country has increased fourfold compared with 1990 to more than 1500 in 2008.

• There are currently 190 airports in China, a figure that will increase to more than 270 by 2020.

• In 1990, there were 17 million airline passengers in China. This year, the number will be 260 million; in 10 years' time it will be 700 million; and by 2030, the figure will be a staggering 1.5 billion.

Jerry Noonan of Spencer Stuart complemented these impressive figures:

• Compared with figures today, in the near future we will see 10-15 million more hotel rooms in China.

• There will be two billion more customers for the Chinese travel and tourism industry.

• The travel and tourism industry in China will employ 65 million.

To put the last figure in perspective, that's more than the population of France.

Staff investment

Clearly, the Chinese market offers unrivalled potential for growth and profits. But both Noonan and Barry Diller, CEO and chairman of IAC/InterActiveCorp, attached health warnings to those who think that successfully plundering China is a forgone conclusion. First, you need to have the right people working for you. They need to be motivated and engaged to come and work in such a complex industry, and they must be prepared for eventual leadership.

"Businesses that fail in China are those with preconceived ideas of how to do things. Local people have more [know-how] than foreigners," warned Diller. Second, invest in technology; improve web presence and embrace mobile technology.

As Diller remarked: "Social networking is already changing this industry. People will make a decision on where to travel based on the opinions of thousands of people they've never met; not because of a piece of marketing." And they want to access information at a time and location convenient to them, not you.

Whilst the air of optimism was refreshing given the fragile global economy, you do wonder if everything you hear can be true. Certainly, one would never insult one's Chinese host by saying so - not if you want to do business in the country. Only time will tell, but with airstrikes, ash crisis, European economic and political malaise and the meltdown of the banking sector, I would put my money on China and encourage my children to head east!

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