Tourism companies see sunny days ahead

Vendors play traditional musical instruments for tourists at the International Bazaar, the world's largest, in Urumqi, capital of the Xinjiang Uygur autonomous region, on May 8. [Zhu Xinxing/China Daily]

Investment in China's tourism industry will exceed 1 trillion yuan ($161.2 billion) this year, up from 705.3 billion yuan in 2014, the China National Tourism Administration revealed on Friday.

Despite the national economy entering its "new normal" of more sustained but slower growth, the CNTA's Chairman Li Jinzao insisted the tourism sector expects stronger growth during 2015 and beyond.

The term "new normal" gained ground in China in May 2014, and it is used to describe the need to remain cool-headed as economic growth slows.

"The next 20 years will be a golden period for Chinese tourism development, with the industry becoming a main engine for economic growth," Li said.

Last year saw a 32 percent rise in tourism investment on 2013, about 15 percentage points ahead of overall growth in the whole service sector, according to an investment report released by the industry body.

Private capital played an increasingly important role in that growth, contributing 56 percent of spending during 2014, according to the CNTA figures.

"Private capital investment has been mainly focused on developing the leisure industry in the eastern regions," said Wu Wenxue, deputy director of the CNTA.

Wu said that the administration expects major tourist industry companies, particularly, to accelerate their spending in the coming year, which would drive the rest of the sector.

Macrolink Group, for instance, a Beijing-based conglomerate covering various industries including real estate, petroleum, mining, chemical engineering and finance, has already revealed plans to spend more than 20 billion yuan on tourism-related projects over the next five years, according to its chairman and president, Fu Jun.

"Privately owned companies should consider investing more in the country's tourism industry," said Fu, as the group revealed it was bringing its investment plans forward two years.

A recent report claimed the combined market value of all China's listed tourism companies has soared ten-fold over the past decade to 539.36 billion yuan.

Analysts also expect investment to increase, as the industry's overall profitability continues rising.

Li Mei, president of Shenwan Hongyuan Securities Co Ltd, said the country's main domestic scenic spots have a target income of 9.5 billion yuan in 2015, a 17 percent year-on-year rise.

"The capital market's pursuit of strong tourism industry investment targets is increasing every year," she said.

Li Jinzao from the CNTA said the government's macroeconomic policy also promotes ongoing support for the sector.

"Tourism is a priority industry, which has created a huge driving effect," said Li, adding the central government has already highlighted policies to encourage more regional projects.

Local governments have also increased their investment in travel-industry related infrastructure, the CNTA chairman said.