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Earthquake shakes tourism industry
By Lu Haoting (China Daily)
Updated: 2008-05-27 07:07 Local impact Analysts said Sichuan's local tourism industry's agents would suffer greater losses than national tourism companies, such as Shanghai Spring International. Tourism plays a fundamental role in the province's economic development, accounting for more than 8 percent of its gross domestic product. Last year, the province's tourism revenue was 121.7 billion yuan, the seventh highest among the provinces. Sichuan received 185.7 million domestic travelers in 2007, accounting for 11.5 percent of the country's domestic travelers. Popular destinations included Jiuzhaigou Valley, giant panda sanctuaries and Emeishan Mountain. Shares of Emeishan Tourism Co, Sichuan's only listed tourism firm, suspended trading for two days after the earthquake. The company generated 465.93 million yuan in revenue last year, a 24.68 percent year-on-year increase. But the earthquake would "significantly" impact its 2008 performance, analysts said. Emeishan Mountain's peak seasons are usually in the second and third quarters. Last year, second-quarter revenue alone accounted for more than 60 percent of the company's total sales. "At best, if Emeishan Tourism Co's business was to return to normal levels in three months, the firm would still suffer a 20 percent year-on-year drop in the number of 2008 customers," a Ping An Securities report said. Ping An Securities has downgraded Emeishan Tourism Co to "neutral" from "buy". Looking ahead But despite the recent setbacks, analysts and industry insiders remain confident in the Chinese travel industry's long-term prospects. "The negative impact of natural disasters is temporary," Guojin Securities' Tang said. "Over the long term, China's travel industry would still undergo fast growth driven by rising incomes. We would not change our long-term ratings of the industry." (For more biz stories, please visit Industries)
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