Chinese Market Offers Challenges

(5/3/2002)

Once seen as having the potential of producing upwards of 800,000 visitors a year, the Chinese market is proving to be more troublesome to serve than originally anticipated.

$10,000 Deposit

On the heels of restrictive rules imposed by the Indonesian Government limiting the number of agencies allowed to serve the mainland Chinese market, the 46 national travel agents officially authorized to sell travel to the PRC are now being asked to pay a US$ 10,000 deposit to their Chinese counterparts. The deposit, serving as a performance guarantee, must be paid within 90 days in order to continue to qualify to handle Chinese tourists.

Fixed Rate Tariffs

In order to counteract demands from overseas Chinese agents using their market force to demand very low prices, the Indonesian Chinese Travel Commission (ICTC) - a consortium comprised of Indonesian agents licensed to sell travel to China, is endeavoring to set minimum selling rates for 3 star hotels in Jakarta at US$ 35 a night, Medan at US$25 a night, and Bali at US$30 a night.

Getting Paid Sometimes a Problem

Existing currency control rules enforced by the Chinese Government make it difficult for Indonesian agents to be paid for services provided to Chinese visitors. Present Chinese banking rules impede the outgoing transfers of money, necessitating Indonesian agents travel to China to collect their payments or set up complicated payments procedures via banks in Hong Kong (SAR). These same regulation also limit to US$2,000 the amount of money Chinese citizens are allowed to bring with them when traveling abroad.

Plans are currently under consideration to loosen foreign exchange controls, allowing Chinese travelers the opportunity to bring US$5,000 on trips abroad.

Flights and Visa Problems

Added to all these many problems impeding the promised "boom" in Chinese travelers to Indonesia, is the continuing problems presented by a lack of air service between China and Indonesia and bureaucratic delays in processing visas to Chinese tourist via the sole issuing office - the Indonesian Embassy in Beijing.