The China Outbound Travel Education Series – part 3 (Approved Destination Status Policy)

6 July 2009 // Filed under China Outbound Education

The emphasis of the Chinese government is clearly on developing inbound and domestic travel. The holiday economy is focused on promoting consumer spending within the country. Inbound tourism has priority as it brings in foreign currency.
As for outbound private travel (tourism), the policy is chiefly concerned with controlling and regulating the travel trade and maintaining a sustainable gradual development of this sector
ADS was first introduced in the early nineties for destinations in Southeast Asia such as Singapore, Thailand and Malaysia. Prior to ADS, travelling abroad was only allowed for business purpose and official visits with government approval needed for every single visit. ADS policy was created to account for the growing interest of Chinese citizens in foreign travel and the fast increase in disposable income.
ADS is granted to overseas destinations through a bilateral government agreement. The ADS only concerns tourism groups handled by assigned Chinese local travel agencies. Business and official travel to overseas destinations are not included in ADS agreements.
The purpose of ADS is to have a control mechanism on the organising parties on both sides (local travel agencies and international tour operators) in order to guarantee safe and reliable tourism services for the Chinese customers.
An important issue within ADS is to avoid possible illegal immigration through tourism channels. All tourism groups travelling within the ADS framework are supposed to be monitored by both Chinese and foreign authorities to ensure they return to China. Embassies and consulates apply different methods to monitor the return of the Chinese tourists. Whenever a tourism group member does not return to China, the local travel agency is held responsible and sanctions are applied.
Only certified ADS travel agencies are allowed to promote and organise tourist groups including visa application and payment of foreign currency to foreign parties. Each of the certified travel agencies must assign special couriers to handle the visa application procedure.
Countries without an ADS agreement are not allowed to receive tourism groups from China or to promote their destination in China for tourism and are restricted to business and official travel groups only.
CNTA keep a list of approved tour operators for outbound travel and publish it on their website in Chinese for every destination country (www.cnta.gov.cn). When listed with CNTA it might simplify the procedure regarding guarantees, payments and visa application. Each country in Europe has differing methods of selecting approved inbound operators to submit to CNTA. The online directory is not updated regularly and is normally several months behind.
135 different countries and territories have signed an ADS tourism agreement with the Chinese government and 100 countries were actively engaged in tourism promotion as of December 2008 . The reason for this discrepancy is that after signing the agreement, the two countries then negotiate the fine details of operating and monitoring the tourist groups and agree on an implementation date.
?    All the EU member states are included in the ADS agreement as concluded in 2004. The United Kingdom was the last EU member state to sign an ADS agreement with China in January 2004 and began operation from end of July 2005.
?    Switzerland, Norway and Iceland have separate bilateral ADS agreements with China as non-EU members.
?    The USA finally signed a bi-lateral tourism agreement (akin to ADS) in December 2007 which took effect in July 2008.

Requirements for local travel agencies to handle ADS groups
?    Certified travel agencies for international travel with at least a one-year track record of incoming tourism.
?    No previous violations of travel related laws and regulations.
?    International and national travel agencies have differing insurance obligations to resolve disputes (such as compensations or fines), 600,000 RMB and 300,000 RMB respectively.
?    Licensed outbound travel agencies must have an additional insurance fund of one million RMB, or 1.6 million RMB in total.
Tour leaders and group size
?    Contained in the ADS agreement is a stipulation that a Chinese certified tour leader must accompany the tourism group. The certificate of a tour leader is reassessed on a yearly basis by CNTA.
?    The minimum size of a group is five people including a tour leader.
?    China has 17,400 certified tour leaders.
?    Travel groups with less than five people do not fit into the ADS agreement and therefore need to apply for business or official visa and justify their travel using invitation letters of receiving parties. They can also apply for a normal visa on an individual basis directly with the consulate without the intermediary services of the travel agent.
?    The FIT market is not regulated through any tourism agreement. It is up to each consulate to issue visa for individual tourists.
?    The German embassy has been the most accessible for FIT visa applications. They have issued over 20,000 individual visas for tourism.
?    Most other EU embassies shun individual applications fearing possible illegal immigration.

The China Outbound Travel Handbook 2008 in blog post sized chunks for easy reading. The posts are abridged versions of the book to give a general overview of China’s tourism industry, the marketing and sales approaches that work, case studies from different destinations, tips on hospitality and more. At any point you can go to our website to read the full version or join the ChinaContact Tourism Network and download the PDF version for free. A license to print the handbook can be purchased from our website as well.

Next week: Part 04 – Wholesale and retail travel agencies

2009-07-06  ::  Roy Graff