Final Report - Asian Development Bank

24 Main Report
monitors marketing trends. A further division provides tourism information, consulting assistance and
assistance with tour guide management. The Xian Administration has in total about 60 employees.
51. The government previously carried out all tourism certification; however, certifications for
hotels and restaurants are currently done by the Shaanxi Tourism Association. The Association
operates at arm’s length from government, but its leaders are often from the Tourism Bureau. The
Association membership includes hotels, travel and tour agencies, tourism sites and the larger
standards that attract a large number of tourists. The Association includes three branches: (i) hotels
and restaurants including hotel suppliers; (ii) travel and tour agencies, and (iii) tourism sites. The
Association also has a training school that provides training for tourism managers, guides and other
tourism services.
52. There are a number of reasons for the limited involvement of the private sector in Shaanxi
tourism. First, the private sector generally plays a smaller role in investment and production in the
Shaanxi Province economy than in the more highly developed PRC provinces on the east coast.
Second, the private sector in Shaanxi and other parts of western China has more limited access to
commercial financing at reasonable terms than the SOEs and other government entities. Third, high
quality tourism attractions require significant capital investments that can be slow in generating major
returns. (The private sector in China generally prefers investments in property that generate quick
returns, have short pay-back periods and provide returns on investment in the area of 15% to 20% or
more.) Fourth, as noted earlier, many tourism attractions in Shaanxi involve historical sites, cultural
relics and ancient buildings that need to be managed and protected by government. The expectation
is that eco-tourism and other resource-based tourism will provide greater opportunities for private
sector ownership and management in the future.
53. While tourism is an important source of economic strength, jobs, investment and business
development in Shaanxi, the Province’s (including Xian) tourism sector is losing ground to other PRC
destinations in attracting and lengthening the duration of stay of the higher spending international
tourist. Tourism officials recognize that the industry has been too dependent on a narrow range of
products that are associated with the Qin dynasty (especially with respect to the Terracotta Warriors).
Product diversification and the development of more specialized higher value products that appeal to
higher income market niches in both China and other countries is needed to attract greater numbers,
increase the duration of stay, and increase the spending of each visitor to Shaanxi.
54. More specifically, Shaanxi needs to capitalize on its potential for tourism development that
would be related to the unique collection of plants, animals and birds that live in and around the part
of the Qinling range which is located within the Xian tourism region. There is an outstanding
opportunity to promote conservation-based tourism linked to the growing domestic and international
demand at sites such as the Terracotta Warriors, and to create employment and wealth in the Qinling
Mountains for the future promotion of sustainable conservation. The Shaanxi Tourism Bureau is
currently preparing a strategy to support eco-tourism and other resource-based and cultural tourism in
the Qinling Mountains.
55. The switch to high value tourism requires not only appropriate product development and
marketing but also to remove the threat of current land degradation and biodiversity losses that
contradict the potential value of ecotourism in the Project Area and the Qinling Mountains. Further it
will require the preparation and enforcement of appropriate tourism standards and the training of local
people living within or near the Project Area to fully participate as workers in, suppliers to, and/or
owners of the tourism facilities established in the ex-situ area and the much larger CDA part of the
Project Area.
56. Over the past decade, Shaanxi has made major advances in improving the management
and quality of its traditional tourism products. Major investments have been made in tourism facilities,
the Shaanxi Tourism Group Company was formed in 1998, and in 1999 the commercial aspects of the
Terracotta Warriors site was placed under the management of a state-owned tourism enterprise
called the Qin Dynasty Terra-Cotta Tourism Corporation Limited (which is a subsidiary of the Shaanxi
Tourism Group). However, more work is needed to further improve the quality of the Province’s
tourism attractions and other products and to attract new enterprise investments (including from the
private sector) as well as new skills, ideas, energy, and market and product development expertise