More Chinese tourists are expected to travel to overseas destinations such as Hong Kong with the appreciation of the yuan against the US dollar, those in the tourism industry have said.

The central parity rate of the yuan breached the psychological mark of 7 against the US dollar earlier this month and stood at 6.98 yesterday.

For Chinese travelers, it means stronger purchasing power in the United States and other countries and regions that use US dollars or peg their currencies to it.

Since Chinese tour groups are still unable to organize trips to the US, it is destinations such as Hong Kong, with its currency pegged to the US dollar, that attract tourists from the Chinese mainland.

"More people have called to inquire about our Hong Kong tour packages than usual," said Guo Guang, manager with ctrip.com, an online travel service.

So far, the number of customers who purchased Hong Kong tour products from ctrip.com has increased by 70 percent year-on-year, he said.

At present, HK$100 can exchange for 89 yuan, down from nearly 100 yuan last January.

"It is a bargain to shop in Hong Kong now, not to mention that many things in Hong Kong, such as imported cosmetics and luxury watches, are already much cheaper than on the mainland," said Zhang Liangyu, 28, a Beijing resident who plans to visit Hong Kong during the coming May Day holiday period.

Guo said that, in the long run, even more will travel to Hong Kong and other overseas destinations, driven by the yuan's appreciation.

The yuan, however, has not appreciated much against the euro or the Australian dollar.

"The yuan's appreciation against the US dollar has not influenced tour groups to go to these two destinations," Lin Kang, deputy general manager of China International Travel Service's outbound tourism department, said.

"In all, the yuan's appreciation has rather limited impact on the whole outbound market," he said.

Dun Jidong, marketing director of the China Travel Service's overseas tourism department, agreed.

"The current yuan appreciation can only serve as an auxiliary factor to the booming outbound tourism market. If it is to prompt much more people to travel overseas, the appreciation has to be so significant that it leads to a huge drop in the price of outbound tour products," he said.

As for the inbound market, experts have suggested that industry operators work harder on their product design and promotion.

Li Xinjian, associate professor with the school of tourism management under Beijing International Studies University, said that while many foreign tourists have prepared themselves for the appreciation of the yuan against the US dollar, some foreign tourists might still drop their plans to visit China.

"Domestic travel services must design better routes and strengthen the promotion of their products to maintain growth in the inbound market, in order to offset the negative influence of the appreciation on the inbound tourism market," he said.

(China Daily April 24, 2008)