Long-term mainland outbound travel will remain strong as more young people go abroad: China Travel

Although last week's nearly 4-percent depreciation of the yuan would dampen the mainland's outbound tourism business in the short term, China Travel International Investment Hong Kong Ltd is optimistic about the industry's long-term prospects.

China Travel's profit attributable to shareholders rose 1 percent to HK$937 million in the first half of this year. Excluding non-recurring items, the profit surged by 27 percent to HK$590 million, with the company recommending a 2.5 Hong Kong cents interim dividend and a 2.5 Hong Kong cents special interim dividend per share.

"The renminbi's depreciation will affect the desire of mainland people for outbound travel in the short run. The pace of strong growth in terms of outbound travel may slow down," said Jeremy Xu Muhan, executive director and general manager of China Travel.

But, in the long term, mainland travelers will still remain the business growth engine for the Hong Kong-listed company.

"The mainland's outbound tourism industry promises strong growth potential, with the number of outbound travelers reaching 110 million last year. Besides, mainland outbound tourists will spend more money when they go overseas," Xu said on Thursday when announcing the company's first-half results.

"This is because there're still many mainland people who have not traveled abroad. And, currently, there's a new class of young people on the mainland who like to go overseas. China Travel will devote more resources to expanding the mainland outbound travel business," he said.

Domestic travel should also not be neglected, Xu said, noting that 3.6 billion people traveled on the mainland last year as the central government has granted more paid holidays for workers.

For the second half of 2015, China Travel will push forward its Zhuhai Ocean Spring Resort Phase 2 project, the Anji Lingfeng Mountain Resort in Zhejiang province, the Songshan Travel Town project in Henan province, the Shapotou Tourist Service Centre in Ningxia Hui Autonomous Region and scenic projects in Yunnan, Sichuan, Guizhou and Shandong provinces.

On Hong Kong's tourism market, Xu said mainland visitor arrivals have slumped after the protests against parallel traders.

"Following the protests, mainland tourists have switched to other Asian destinations ... The occupancy rate of hotels operated by China Travel has fallen slightly during the July peak period compared to last year," he said.

However, Xu noted that the SAR's tourism industry has modified its business strategy to lure more visitors from the mainland's inland provinces to come to Hong Kong.

China Travel's share price dropped 2.27 percent to close at HK$3.02 apiece on Thursday.

oswald@chinadailyhk.com

Industry insiders believe that the devaluation of renminbi would slow the pace of the mainland's outbound travel, but the mainland's outbound tourism industry promises strong growth potential. Tyrone Siu / Reuters

(HK Edition 08/21/2015 page11)