Terracotta ‘Worriers’ Join Exporters to Urge for RMB Devaluation

Xi’an hotel and tour operators recently held an end of year meeting to discuss ways in which the tourism industry can counter economic deceleration in China.

During the meeting, currency devaluation was discussed as businesses consider effective measures to counter the economic doom and gloom.

Hundreds of thousands of tourism industry employees in Xi’an have been left unsure as to whether they will still be in business this time next year.

“We certainly hope the Government will consider realigning our currency more accurately to account for the severe reductions in foreign countries” said Mrs Lie, China Operations Manager for Xi’an Travel Service. “Like exporters, we are taking a pounding with current rates”.

Home of the Terracotta Warriors and well-known as one of China’s hottest tourists destinations, Xi’an has experienced a sharp decline in international visitors in a year that was supposed to capitalize on the Olympics to boost revenues.

Tourism contributes approximately 40% of the North Western City’s GDP, and it is a major driver in the government’s development strategy for Western China.

Mrs Lui said the expected Olympics boom never eventuated because of stringent visa restrictions, and the Earthquake in Sichuan.

She continued to express hope that 2009 would herald an increase in International visitation, “we are optimistic but certainly government intervention at this stage would be appreciated”.

Statistics released by China Daily 2007 (http://www.chinadaily.com.cn/china/2007-07/04/content_909249.htm) showed that international visitors stayed in Xi’an for an average of 2.9 days and spend approximately $180.

“Traditionally we have managed to differentiate our products sufficiently to achieve our share of the market. Now we are forced to compete solely on price. We have responded to this challenge by drastically reducing the cost of our packages. Fantastic bargains are now available. We hope to attract more visitors but it is tough.”

 Hq Guesthouse Xi’an, www.hqhostelxian.moonfruit.com which offers centrally located apartments added to the sentiment.

“We are managing to stay afloat, but even considering it is the low season things are eerily quiet. We do not normally adjust our prices seasonally but this year we are offering our newest two bedroom apartments for only 300rmb / night ($US43), a nearly 50% price reduction. We have seen several operators disappear over the last 6 months as competition eats away at the cake” said Manager Mei.

In recent years the Chinese government has rolled out a swathe of investments in Xi’an tourism infrastructure.

Government contributions have been invested into developments such as the city’s airport expansion which is well under way to re-establishing Xi’an’s status as a western hub.

Direct flights are now available from Thailand and Japan from Xi’an’s airport, with many more countries to be added in the future.