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China to return part deposits to travel firms amid weak market

The China National Tourism Administration (CNTA) will return up to 70 percent of the deposits of travel agencies to help them cope with the fall of tourist numbers because of the global financial crisis, the China Daily reported on Tuesday.


China's inbound travel firms usually have to deposit up to 100,000 yuan (14,598 U.S. dollars) with the CNTA, while the amount for outbound agencies is 1.6 million yuan (233,576 U.S. dollars).


The CNTA uses the deposits to compensate tourists who suffer losses or meet with accidents during tours because of travel agencies' faults. Travel agencies across the country can get back 50 to 70 percent of their deposits before the end of January, the newspaper quoted the CNTA as saying.


The provincial or municipal bureau will decide the exact percentage of the deposit an agency would be returned. The CNTA said travel agencies could keep the refunded amount till the end of 2010.


"Since 2008 has been a difficult year for tourist agencies hit by the winter blizzard (during Spring Festival), the May 12 earthquake and the global economic slowdown, we're trying to help them through these trying times," the CNTA said.


"Getting back some of the deposit would be extremely helpful," said Hao Zhigang, manager of the Beijing-based Nature Travels. The firm specializes in organizing tours to India and claimed to have suffered "huge losses" because of the recent terrorist attack in Mumbai.


"Many groups heading to India cancelled their trips after the attacks. We now need money to refund them," Hao said.


But Zhan Jungyu, marketing manager of China M&R Special Tours, said the deposit refund would not be of much help.


"We don't need money. We need tourists," he said. "The government has cut down its plans for the travel industry and reduced funds for business travel. This is a hard time for us."


Liu Ping, general manager of Beijing Xinxin Travel Services, echoed Zhan by saying: "I don't even want to bother claiming a deposit refund."


The CNTA offered to refund the deposits in 2003, too, when the country's tourism industry was hit by the SARS fear, she said.


"Even back then, it was the small travel agencies, lacking cash flow, which claimed their deposits, not us so instead of returning deposits, it would be better if the government slashed our business tax," she added.


(Xinhua News Agency December 9, 2008)