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The first Sino-foreign joint venture business travel service company debuted yesterday in Beijing, marking the formal opening of China's travel market after the country's accession to the World Trade Organization (WTO).
The joint venture, named CITS American Express Travel Services Ltd, was co-established by the China International Travel Service Corporation (CITS) and the US-based travel management company American Express, with CITS holding a 51 per cent stake.
Scheduled to start operating in April, the joint venture will provide business travel management services to clients from multinational corporations, large-scale Chinese mainland enterprises and companies in China's Hong Kong, Taiwan and Macao areas, CITS President Li Lu'an said at yesterday's inauguration ceremony.
Specific services will include getting visas and booking international and domestic flights and hotel reservations. The joint venture can also arrange business leisure travel for foreign staff with overseas-funded companies in China, said Zhang Jianhua, CITS vice-president.
Tim Johnson, senior vice-president at American Express, said the joint venture is "exceptionally well positioned to capitalize on the growth potential of China's business travel industry.
"We estimate that business travel expenses in China stand at US$4.2 billion a year, about 17 per cent of the total business travel volume in Asia," he said.
Business travel service providers abound in China, but the market is very underdeveloped, he said.
The largest tourism agency in China, CITS, made only 200 million yuan to 300 million yuan (US$24 million to US$36 million) in revenue from business travel services each year, Li said.
"We plan to increase our revenue from business travel services to between US$300 million and US$500 million in the next three to five years with the joint venture," Li said.
Johnson said he expects the firm to become an industry leader by securing more than 10 per cent of market share. Industry officials said another large Chinese tourism agency is talking with an established US travel management company about launching their own joint venture in China.
Gu Chaoxi, vice-director with the National Administration of Tourism, said yesterday that more travel service joint ventures will be approved soon, following the one set up by CITS and American Express.
(China Daily January 29, 2002)
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