Chapter 7 Promotion of Measures by Target Markets and Collaboration with External Entities

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1 Chapter 7 Promotion of Measures by Target Markets and Collaboration with External Entities 7.1 Tourism Markets and Tourism Products Tourism Resources and Tourism Products Master Plan of tourism in Qinghai Province (2000) enumerates and classifies tourism resources in a classical sense. This Study adopts the concept of a tourism product that is generally used in the advanced tourism industry in throughout the world. A tourism resource is an essential element of a tourism product, but it cannot satisfy the conditions of a tourism product by itself alone. The tourism product is an end-product of a process in which unnecessary parts of a gemstone of a tourism resource are shaved off. This gemstone is then cut into a jewel, polished, and made into jewelry that can be sold in the market. In other words, the original stone of a tourism resource is made into a whole that can be understood and appreciated by tourists (in terms of its value, meaning, and background) by attaching various essential facilities, services, tools, explanatory materials, and guides and interpreters, so that they can obtain meaningful and satisfying tourism experiences in a comfortable environment. Whether such a whole can be created depends on the characteristics of the resource, including its history, culture, ethnicity, tradition, geography, flora and fauna, as well as environment. In short, a tourism product is a tourism resource crafted into something that can readily be readily be sold in the market. In Qinghai, not many of these exist. Initial efforts toward creating a tourism product is seen at Bird Island and Ta er Temple, even they have not yet reached international standards Tourism Market Tourists to Qinghai consist of domestic and foreign visitors. Such visitors have been categorized into the following types, based on general trends and statistics from Domestic Tourists: - Qinghai province: Residents (including day trippers); - Neighboring provinces and autonomous regions: Adjacent regions and provinces include Gansu, Sichuan, and Xinjiang. Closeby regions (within a short travel time) include Ningxia and Sha anxi; - Federal municipalities and eastern coastal provinces: Federal municipalities include Beijing, Shanghai, Tianjin, and Chongqing. Eastern coastal provinces include Guangdong, Zhejiang, Jiangsu, Fujian, and Shandong; and 7-1

2 - Other provinces and autonomous regions (besides those mentioned above): These areas include those in Liaoning and Huangnan/Huabei. Foreign Tourists and Expatriate Chinese: - Expatriate Chinese: Hong Kong, Macau, Taiwan, and those in Southeast Asia; - Far East: Japan and Korea; - Southeast and South Asia: Singapore, Thailand, Indonesia, Malaysia, and Philippines (excluding all expatriate Chinese), and India; and - Europe, Americas, and Oceania: Europe (Western Europe and Russia), Americas (USA, Canada, and Latin America), and Oceana (Australia and New Zealand). Applying an often-used categorization in Qinghai regarding market rank (1 st class the most important, 2 nd class - the next most important, and 3 rd class complementary), the aforementioned domestic and foreign tourists may be classified as follows. Table Classification of Markets Market Domestic Tourists Rank 1 st Class Federal municipalities Eastern seaboard provinces 2 nd Class Intra-Qinghai Adjacent/nearby provinces 3 rd Class Other provinces and autonomous regions Foreign and Expatriate Chinese Tourists Expatriate Chinese Neighboring Asians Europe Americas Oceania According to the annual number of tourists by source, the markets were classified into five ranks as follows. Table Classification by Market Size Rank Market Size Market AAA Over 1.0 million Intra-Qinghai Federal municipalities AA million Eastern seaboard provinces Other provinces and autonomous regions A 30, ,000 Neighboring provinces and autonomous regions B 10,000-30,000 Expatriate Chinese, neighboring Asians, and westerners C 2,000-30,000 SIT market Niche market 7-2

3 7.1.3 Tourism Segment and Market Size (1) Tourism Area, Tourism Route, and Tourism Product Modern-day tourism far exceeds the classic activities of simply visiting tourism resources and tourist sites. It has changed greatly in terms of geographical expansion, content, and objective. In general, tourism activities of area, line, and point development can be recognized. Potential of the tourism products of the Greater Xining Area are classified by market segment and size as shown in Table (2) Tourism Products by Theme and by Objective (2005) Modern-day tourism crosses geographic boundaries, generating tourism markets according to interests or objectives, with significant market sizes for each. Importance of this trend increases annually. Table arranges tourism products and activities by theme and objective, together with potential, market segment, and market size for (3) Tourism Products by Theme and by Objective (2010) There are many tourism development plans at the levels of province, prefecture, county, and municipality. Even if a part of them is to be realized, new tourism products of area, line, or spot development will become available to make Qinghai a more attractive destination. Table shows how Qinghai tourism may appear in 2010, when these new products are added. 7-3

4 7-4 Tourism Market Tourism market Domestic Overseas Table Tourism Market Segments and Market Size (Tourism Area, Route, and Product) Tourism Area Xiadu - Xining City Area Qinghai Lake Area Yellow River Area Qilianshan Area Tourism Route Xining City Area Circuit Qinghai Lake Circuit Yellow River Circuit Qilianshan Circuit City and history tourism in Xining Qinghai Lake 151 Diji, Longyangxia, Guide, Beishan Xianmi Forest Tourism Product City, Tu Nationality Village Park, Qinghai Lake Shadao, Kanbula/Lijiaxia, Mengda, Park, rape blossoms in Ta er Temple, Quyun Temple, and Atomic Museum, Jinyin Tianchi, and Tongren - Menyuan, old castle Liuwan Remains Beach, and Bird Island Regong Cultural Village remains, and Zhangye Intra-Qinghai A A A A A A A Neighboring Areas A A B B B Federal Municipalities & Eastern Seaboard Provinces A A A A A A B Other Provinces B B B C Expatriate Chinese B B B C Nearby Asians B B B C Westerners B C B C Table Tourism Market Segment and Market Size (Tourism Product by Theme and Objective: 2005) Tourism Theme Nature Religious/Cultural Ethnic/Cultural Leisure/Resort Conference/Seminar Special Product by Objective Kanbula/ Avoiding the Heat, Conferences, Tibetan Buddhism Tibetan, Tu, Sala, Climbing, Lijiaxia, Bird Highland / Highland Seminars, and Buildings/ Remains Hui, etc. Eco-tourism Island, etc. Recreation Events Intra-Qinghai AA AA AA A A C Neighboring Areas B B B A A B Federal Municipalities & Eastern Seaboard Provinces AA A A AA AA A Other Provinces B B C C B C Domestic Overseas Expatriate Chinese B B C B C C Nearby Asians B B B C C B Westerners C C C N/A N/A C The Study on Comprehensive Tourism Development

5 7-5 Tourism Market Domestic Overseas Tourism Theme Product by Objective Table Tourism Market Segment and Market Size (Tourism Product by Theme and Objective: 2010) Nature Yellow River Cruise (Longyangxia, Guide, Kanbula/ Lijiaxia) Mengda Tianchi and Gansu Route (Mengda Tianchi, Xunhua Sala Nationality Zone, and Gansu Bingling Temple/ Lijiaxia Dam) History/Religion/Ethnic Culture Tibet Buddhism - Gansu Route (Ta er Temple, Mengda, Tianchi, Tongren - Regong art, Gansu - Labrang Monastery) Tuguhun Remains Route Leisure/Resort Dam Lake Tourism (Lijiaxia Dam*) Spring Recuperation Long Stay (Guide) Summer Resort Long Stay (along Qinghai Lake) Summer Capital Xining/Conference and Seminar/Urban Tourism (MICE) Large-scale conference and event at two facilities 8 Urban tourism Special Interest Tourism (SIT) High altitude training (Xining) Yanhu (Salt Lake) Tour Sanjiangyuan Tour Przewalski's Gazelle Tour Intra-Qinghai A AA AA AAA B Neighboring Areas B B A A B Federal Municipalities & Eastern Seaboard Provinces AA A AA AA A Other Provinces B B C B C Expatriate Chinese B C B C C Nearby Asians B B C C B Westerners C C C C C *Lijiaxia Dam Lake Tourism The dam/reservoir is valuable not only for hydro-electric power, but also for tourism. Many examples exist in advanced tourism countries of using a dam/lake as a recreation spot for nearby residents and as a tourism spot for distant tourists. One such example of the former is Tama Lake near Tokyo, while one such example of the latter is Kurobe Dam. If Lijiaxia Dam and Kanbula National Forest Park (Red Mountains - Nanzong Monastery) are developed within a unified concept, it may be a very attractive dam lake tourism product, and become a model development in China. Lijiaxia has considerable advantages over Longyangxia in terms of potential for successful dam lake tourism development because of its better access and closer proximity to a large market. 8 This could include, for example, combination of Xining (main event) and Qinghai Lake (subcommittee, seminar, etc.), or a combination of Xining and Guide. The Study on Comprehensive Tourism Development

6 7.2 Deployment of Marketing Strategy Focused on Market and Product Measures in deploying marketing strategy are discussed below Preparation of Marketing Materials Renewal of Printed Materials The Qinghai Province Tourism, currently produced for the general public in Chinese, Japanese, and English, should continue to be produced. Other printed materials, however, should be completely renovated with the Great New Northwest Tourism Map ( ) 9 serving as a model for the level of quality and content that should be aimed at. New Marketing Materials (Manual for Travel Agents in Tour Planning and Sales Promotion) A manual of tour planning and sales promotion should be produced. A model for such an effort can be the Great Northwest - New Tourism ( ) Sales Promotion Manual produced for the Five Northwest Province, City, and Autonomous Region Common Promotion Campaign. The design, content, and editing of new marketing materials should be at the level of this manual and the tourism industry in Qinghai must participate. Its production should be commissioned to outside companies possessing sufficient experience and know-how. It is possible to reduce costs by charging sponsors. Renewal of Advertisement Posters New full-size posters should be produced, linking with images used in TV commercial messages. Joint production with the airline, railway, and/or tourism industry can reduce costs. Finding sponsors for these ads will also reduce costs. Publication of Tourism Newsletter It is desirable that a newsletter be published with a focus on timely and practical articles, although it depends on the plan and the budget for the magazine, Qinghai Tourism ( ). Production cost would be one-half to one-third of the magazine, yet its applicability and usefulness would be far greater. 9 The Great New Northwest Guidemap ( ) and the Great Northwest New Tourism ( ) Tour Planning and Sales Promotion Manuals, prepared in 2004 for the joint Great New Northwest Campaign by Sha anxi, Gansu, Ningxia, Qinghai, and Xinjiang satisfy international standards in terms of content, print quality, editing, and design. Production was done by Sha anxi Province Western Tourism Broadcasting Company. 7-6

7 Production of DVD for Sales Promotion The majority of advanced tourism provinces produce DVDs for sales promotion. DVDs have become essential features in recent travel fairs throughout the world, and are a must for Qinghai. Original materials should appear in TV films and others visual media, which can then be used to reduce the production cost Sales Promotion Change in Travel Fair Participation Considerably more funding should be allocated towards the two major travel fairs (Guilin and Kunming) to enable the dispatching of a larger delegation (including dance troupes) as well as other attractions so as not to be overshadowed by other provinces and autonomous regions. New participation methods should be introduced to enable concrete commercial deals on the floor, through close cooperation with the tourism industry. Strategic Initial Investment in Inviting Media and Travel Agents in Source Regions 10 Major media and travel agents in source markets should be invited to Qinghai to learn more about new tourism spots and new routes under a regular FAM (Familiarity) tour budget. It is possible to set conditions such as the frequency of media appearances or the number of new tour packages to invite them on, rather than simply giving them free travel. Tie-up/Cooperative Campaign A cooperative promotional campaign should be introduce and executed through the cumulative efforts of the Qinghai Tourism Bureau, the Tourism Association, as well as other related and concerned people and organizations. It is advisable to utilize advertising and media organizations in advanced tourism regions for the planning of the production and implementation of such a campaign Advanced Marketing Creation of Tie-up Products and Collaboration and Synergy In cooperation with travel agents in source market such as Xi an and Lanzhou, Qinghai tour packages should be created with TV advertisement catchphrases such as Qinghai is no longer far away, together with a common logo and travel brochure. These should be released at certain periods after the television showings in Xi an and Lanzhou. At the same time, sales promotion measures should be initiated as well. 10 This is generally called a FAM tour within the travel industry. 11 For example, the Sha anxi Province Western Tourism and Culture Broadcasting Company, which implemented the Great New Northwest Campaign can be a candidate. 7-7

8 Sales Promotion of Tie-up Tour Packages, Based on the Five Northwest Province, City, and Autonomous Region Great New Northwest ( ) Activities similar to those noted above should be conducted for tour packages described in the captioned material above, including the use of common logos and catchphrases. Cooperation with airlines, railways, and bus companies should also be sought. Use of Qinghai Liaison Office in Federal Municipalities and the Eastern Seaboard Provinces A full-time tourism sales and advertisement representative should be placed in each of the Qinghai liaison offices. He/she should collect information on the market and periodically calls existing and potential travel agents. It would be, however, quite difficult to locate such a person in Qinghai, who possesses expert knowledge and a network of related persons in the source market. It is thus better to employ someone of appropriate qualification in the source market. It is conceivable that such sales calls will be done jointly with travel agents/operators in Qinghai Promoting Cooperation with Outside Entities Strengthening Ties with Neighboring Provinces and Autonomous Regions Strengthening cooperative sales promotion campaigns such as the Great New Northwest. Observing, studying, and training in more tourism advanced locations in neighboring provinces and autonomous regions. Supporting neighboring provinces and autonomous regions in their efforts to increase tourists. 7-8

9 Chapter 8 Strategic Development of Priority Tourism Area and Main Points As more than 86% of all tourists visiting the Greater Xining Area come from within Qinghai, tourism development in the province has largely concentrated within this area. For the future of tourism in the Greater Xining Area, the province s tourism sector is expected to be a basic industry and contribute to socio-economic development in the province and expand the tourism sector to outlying areas of the province. Going forward with national and global tourism area development to target the international tourism markets is necessary (involving collaboration with neighboring provinces, metropolitan areas, and eastern coastal areas). The JICA Study Team proposed stepwise development for the short-, medium-, and long-term, corresponding to the progress of tourism market development, in order to produce effective development that meets demands and effectively utilizes limited investment resources. 8.1 Tourism Product Development Strategy (1) Short-term development strategy (up to 2010) To meet a scaled expansion of markets and diversification of needs, the Study Team proposes to: (i) promote tourism facility development in Xining City as a tourism base and in the Qinghai Lake Tourism Circuit, which has already been under development; and (ii) expand and accumulate capacity to satisfy the expanding demands of tourism. At the same time, diversifying tourism and recreation activities is needed to improve facility quality at existing tourism spots. Attracting facility development into new Yellow River Tourism Circuit and Qilianshan Tourism Circuit is also necessary, through the development of routes to establish new circuits. (2) Medium-term development strategy (up to 2015) To meet a scaled expansion of markets and a qualitative shift to medium and high classes, development and diversification of tourism products, utilizing new eco-tourism, historical, and cultural heritages, are desirable in not only Xining City (as a tourism base), but also in the Qinghai Lake Tourism Circuit. This may include facility improvement and service enhancement in tourism bases and the development of spots by the short-term development strategy. On new Yellow River/ Qilianshan Tourism Circuits developed in the short-term, the Study Team proposes forming and providing a group of selective and fascinating tourism products through facility development at tourism spots to promote expansion and the improvement of the functionality of tourism bases. (3) Long-term development strategy (up to 2020) To correspond with longer stays (due to tourism market maturation and higher spending by tourists), the Study Team proposes to: (i) develop high-quality accommodation facilities satisfying the needs of overnight tourists; (ii) enhance the quality of and related services for 8-1

10 tourism products; and (iii) produce various tourism products that also meet the needs of long-stay tourists. At the same time, the development of wide-area tourism routes that are coordinated with the rest of Qinghai (such as Sanjiangyuan) as well as other neighboring provinces, or the formation and/or expansion of tourism bases that contribute to route development along the rail line (for instance the Qingzang Railway), should proceed. 8.2 Identifying the Greater Xining Area Tourism Circuit To meet a quantitative expansion of markets and a diversification of needs, forming circular tourism circuits that can clarify fascinations and characteristics of the area is necessary. This is a method that leads tourism targets from spot to line, and from line to area. Formation of tourism circuits is not simply a matter of the existence of tourism resources. As such, the Study Team proposes forming three tourism circuits (the Qinghai Lake, Yellow River, and Qilianshan Circuits), considering geographic conditions and the existing and planned development conditions of tourism facilities and infrastructure (such as road and railway links). 8.3 Development of Xining City as a Tourism Base and Related Tourism Products Regarding the development of Xining City as a tourism base, the Study Team proposes to: (i) expand transport functions such as roads, railways, and airports; (ii) quantitatively expand and qualitatively improve accommodation facilities concentrated on accredited hotels; and (iii) expand city functions as tourism bases for culture and amenity, by utilizing existing infrastructure/facilities in the city. At the same time, the following should proceed: (i) development and formation of bases for urban-type tourism, cultural, and shopping as a tourism spot of the Summer Capital Xining; (ii) formation of historical tourism spots for Xingyu (the restored official government residence), Mabufang (the official government residence), Hutai, and Wenchao; (iii) formation of landscape tourism spots that can meet the development levels of the green districts at Nanshan and Beishan; and (iv) formation of the new tourism bases in the south of the city. The Study Team also recommends proceeding, not only within the city, but also to satellite tourism sites (such as Datong, Qiaotouzhen, Riyueshan, Ta er Temple, the Huzhu Tu Nationality Ethnic Village Park, Quyun Temple, and the Liuwan Remains (in the Ledu, Huangshuigu Area). These products, all within a half-day range for tourists, will make the Greater Xining Area into a tourism base due to the range. 8-2

11 Figure Xining City as a Tourism Bas 8-3

12 8.4 Development of the Qinghai Lake Tourism Circuit and Related Tourism Products Qinghai Lake, a large salt lake, is located in the upper plateau (at more than 3,200 m) and is surrounded by: (i) the Datong Range of the Qilianshan chain (at about 4,000 m) to the north; (ii) the mountains making up Riyueshan (at about 4,000 m) to the east; and (iii) the Nanshan Mountains (at about 4,000 m) to the south. The lake is an inland lake formed in a huge prairie basin, with a perimeter about 150 km. The Qinghai Lake area has a magnificent view of the grass in the cool summer, with Core Zones such as Niaodao in the Qinghai Lake Nature Protection Zone, which serves as a breeding ground for a variety of water fowl. The area is richly endowed with natural resources for instance the rare Przewalski s gazelle roams the area, while indigenous Huang Fish swim upstream to breed in the summer. In terms of historical and cultural resources, historical heritages such as the Tuguhui remains and mural painting, are scattered to the west of the lake. Tourism resources reflecting various ethnic cultures and their distinct characteristics (such as Tibetan folk singing, dancing, etc.) are also scattered throughout the grass farms where sheep and goats form herds. The utilization of natural and cultural resources should be capitalized upon, especially considering the location of the existing road around the lake and the new Qingzang Railway to Lhasa. The Study Team proposes producing a set of diversified, yet selected tourism products by developing: (i) a high plateau resort in the cool summer; (ii) a, high plateau sports and recreation zone; (iii) eco-tourism of endangered ecosystems; and (iv) cultural tourism displaying historical and traditional cultures and lifestyles. In addition to the existing summer tourism sites, winter sports resorts should be developed. It will support stable tourism volumes throughout the year and will serve as a case study for the development of the winter tourism industry in the province. 8-4

13 Figure Qinghai Lake Tourism Circuit 8-5

14 8.5 Development of the Yellow River Tourism Circuit and Related Tourism Products The areas that the Yellow River passes through are located in relatively warm, low-altitude areas. As such, it passes a variety of landscapes composed of precipitous geological formations, green valleys, other tributaries and branches of the Yellow River, verdant farmlands spreading on both sides of the Yellow River, and precipitous mountains and cliffs with unique rock formations. Beautiful lakes (such as Longyangxia and Lijiaxia) and other ecological jems exist along the river (including the Kanbula National Geological Park (near Lijiaxia), famous for its strange rock formations, and the Mengda National Forest Park (near the border with Gansu), famous for Tianchi. Combined, these locations bring variety and richness to the landscape of the Yellow River s watershed areas. Special local fruits and vegetables are grown in the nearby agricultural zone, while various villages and towns exhibit traditional lifestyles and ethnic minority culture (for instance the unique cultures of the Tibetan and Hui nationalities, as well as the Sala nationalities who converse using a Persian tongue). Furthermore, an ancient corridor of Tibetan Buddhism and culture runs north to south and passes Ta er Temple, Tongren, the Labrang Monastery in Gansu, as well as many temples in Tongren that possess primitive massive Buddhist-style architecture. Cityscapes of traditional religious arts are located there, while Buddha statues, as well as altar and other interior relics are produced and form an important new industry. Also, high-quality Buddhist paintings have been acclaimed by tourists as well as Buddhists alike. The Study Team proposes developing and accumulating accommodation facilities targeting Guide, Kanbula and Lijiaxia, and Tongren as tourism bases. Development of eco-tourism, historical and cultural tourism, landscape tourism, as well as ethnic minority cultural tourism throughout the area is necessary. 8-6

15 Figure Yellow River Tourism Circuit 8-7

16 8.6 Development of the Qilianshan Tourism Circuit and Related Tourism Products The east-west Qilianshan chain, with its nearly 5,000 m altitude, is covered with ever-present snow, runs parallel to the Datong River, and intersects with a southern route of the famous Silk Road just north of the Greater Xining Area. Within the area: (i) a refreshing, leafy, and shaded environment exists in the area; (ii) rape blossom fields near Menyuan are dispersed over 50 km of the Silk Road in the spring; (iii) an abundance of green and alpine plants thrive in Beishan and the Xianmi Forest Park along the Datong River; (iv) various mountain birds and animals thrive in the natural setting; and (v) various Tibetan legends are based on nearby mountains, valleys, and pools. Castles and other heritage sites in the Zhongyuan Civilization are scattered throughout plains and basins along the Datong River, while traditional lifestyles of various ethnic minority groups are preserved (including Hui, Tu, Tibetan, Mongolian, etc.). In regards to Beishan and the vast Xianmi National Forest Parks, the Study Team proposes developing weekend tourism and recreation areas as a place of recreation and relaxation and an oasis for citizens (utilizing the refreshing waterfront and forest environments to target the Xining and Lanzhou metropolitan markets - both with good access in spring and summer). Since the route, which runs from Xining to Gansu Province through Datong, Dabanshan, Qingshizui in Menyuan, and Ebao in Qilianshan, overlaps with the southern route of the Silk Road, developing and forming tourism sites is important, especially those products targeting tourists from outside of Qinghai and from abroad. As for the Dabanshan area, composed of Haomenzhen in Menyuan, around Qingshizui (the intersection of radial and circular roads), and Datong, the Study Team also proposes developing accommodation facilities and historical/ cultural tourism on this circuit, in addition to the Beishan and Xianmi weekend tourism bases along the Datong River. Development of tourism spots around Qilianshan and Babaozhen should proceed as adventure tourism destinations, utilizing mountains and rivers. 8-8

17 Figure Qilianshan Tourism Circuit 8-9

18 8.7 Development Plan of Tourism Related-Facilities and Infrastructure Primary Tourism Products on Tourism Circuits Table lists the primary main tourism products (for both overnight and day trip visitors) for each circuit. The Study Team proposes developing 41 tourism products to correspond with the development of tourism bases and spots on each circuit, and to provide various products to meet the varying needs of the market and tourists. Xining City as a Tourism Base The Study Team presumes that nearly all tourists visiting locales in the Greater Xining Area, the wide area, and in the province will stay in Xining city for transit. Thus jointly-developed tourist products between the wide-area and the interior of the province should be developed, in addition to three products for overnight or day trips, and five products for day trip only. Qinghai Lake Tourism Circuit Lengthening stays is a major issue for existing day trip tourism products of Qinghai Lake. As such, the Study Team proposes developing five overnight tourism products, including the development of lakeside resorts and ecological tourism bases. At the same time, the following would occur: (i) development of a single destination, seven-day trip; and (ii) shift of tourism spot development from single-day roundtrip tours to longer trips visiting each tourism base and spot. As the Qingzang Railway and a national road run on the north and south shores of the lake and intersect with major wide-area tourism product routes, the development of four integrated tourism products is possible. Yellow River Tourism Circuit Though it is possible to take a day trip to each tourism base and spot, the development of overnight tourism products will be extremely valuable (such as products to visit multiple tourism spots, to take Yellow River tours, and to visit historical cultural route), in the lengthening of tourist stays. At the same time, the Study Team proposes developing three products to coordinate with these wide-area tourism products, as Guide and Tongren are located at bases, along the wide-area tourism product route. Qilianshan Tourism Circuit The beginning of tourism to this circuit has begun through weekend tourism along the eastern edge of the Qilianshan Tourism Circuit (comprised primarily of Xining and Lanzhou residents and tourists on the southern route of the Silk Road from National Route 227). The Study Team proposes developing six overnight or day trip tourism products by diversifying and improving the quality of tourism activities of each tourism spot and base. The Study Team also proposes developing a wide-area tourism product coordinating with the southern route of the Silk Road, which aims to develop the circuit for overnight tourism (including accommodation). 8-10

19 Xining City as Tourism Base Qinghai Lake Tourism Circuit Yellow River Tourism Circuit Table List of the Main Tourism Products on Various Circuits Type of Activities Interior provincial area products (day trip/overnight) Interior provincial area day trip products Partnership product between wide-area and interior provincial areas Interior provincial area overnight products Interior provincial area day trip products Partnership products between wide-area and interior provincial areas Interior provincial areas (day trip/ overnight) Partnership products between wide-area and interior provincial areas Product Code X-stay/day-1 X-stay/day-2 X-stay/day-3 X-day-1 X-day-2 X-day-3 X-day-4 X-day-5 X-C-1 Q-S-1 Q-S-2 Q-S-3 Q-S-4 Q-S-5 Q-D-1 Q-D-2 Q-D-3 Q-D-4 Q-D-5 Q-D-6 Q-D-7 Q-C-1 Q-C-2 Q-C-3 Q-C-4 Y-S/D-1 Y-S/D-2 Y-S/D-3 Y-S/D-4 Y-S/D-5 Y-S/D-6 Y-C-1 Y-C-2 Y-C-3 Name of Tourism Products Remains and Cultural Tourism in Datong Tu Nationality Ethnic Tourism in Huzhu Xining Highland Sports (including golf, skiing, etc.) Tibetan Buddhism Tourism at Ta er Temple Liuwan Ancient Remains and Caitaotuqi Tourism Quyun Temple and Shengjiaxia Tourism Xining City Sightseeing (Nan/Bei Chan Temple, Qingzhen Temple, and Wenchao) Qinghai Province Traditional Folk Music and Performance Art Tour Gate to traffic bases and tourism sites need to coordinate with all tourism products Qinghai Lake 151 Plateau Resort Bird s Island; Eco-tourism at Water Fowl Paradise Atomic Museum, Yinjin Beach, and Shadao Shaliuhezhen, Meadows, and Eco-Tourism Qinghai Lake Plateau Circuit Tourism Around Qinghai Lake Tourism (primarily for Bird s Island) Atomic Museum and Jinyin Beach Daytrip Shadao, East Bank Eco-Tourism, Water-Frond Tourism Shaliuhezhen, Meadow, and Eco-Tourism Daytrip Bird s Island Water Fowl Viewing Dulan and Tuguhui Remains tourism 151 Day Trip Ge ermu/caidamu Basin Silk Road Dunhuang Route Qingzang Plateau Tourism Corridor (Road) Qingzang Plateau Tourism Corridor (Railway) Kanbula Park/Lijiaxia Nature Exploration Yellow River- Ethnic Villages and Boat Tours Tongren - Tibetan History and Traditions Mengda Tianchi and Eco-Tourism Minhe Ethnic Tourism Guide - Yellow River, Hot Springs, and History Tangfan Gudao (Old Road) Tourism Corridor Shangri-La Tourism Corridor Tibetan Buddhism Corridor (Ta er Temple Longwu Temple Gansu Province) 8-11

20 Qilianshan Tourism Circuit Type of Activities Interior provincial areas (day trip/ overnight) Product Code Q-S/D-1 Q-S/D-2 Q-S/D-3 Q-S/D-4 Q-S/D-5 Q-S/D-6 Name of Tourism Products Beishan National Forest Park - Weekend resort Xianmi National Forest Park - Weekend resort Menyuan - Bailihuahai (many flowers) and Rape Blossom Fields Datong - Dabanshan and Ethnic Village Qilianshan Base Camp at Snow-Capped Mountains and View of Bailihuahai (many flowers) Qilianshan Ecological Adventure Tour Partnership products between wide-area and interior provincial areas Q-C-1 Southern Route of the Silk Road Notes: S: Overnight; D: Day Trip; C: Wide-area and intra-province cooperation; X: Xining Cityas a Tourism Base; Q: Qinghai Lake Tourism Circuit; Y: Yellow River Tourism Circuit; and Q: Qilianshan Tourism Circuit. Source: JICA Study Team Main Tourism Development Bases Each tourism product has its unique features such as ambient surroundings and landscapes, as well as resource characteristics, tourism activities, average duration of tourist spending, and average length of stay. On the other hand, tourists also have unique characteristics, whether day or overnight tourists, whether from Qinghai, from neighboring provinces, from the eastern coastal areas, or from foreign countries. The Study Team identified 14 major tourism development bases among tourism circuits and areas that satisfy the following conditions, in particular. Areas as a base in circuit formulation Areas with overnight demand of over 1,000 rooms in the short-term Areas concentrated with infrastructure and basic tourism facilities so that they can be developed/used for tourism in the short-term Areas that can contribute to the development of tourism products, such as the areas which cater to the needs of tourists from the eastern coastal area and other countries Areas where major adverse impacts on the environment by development projects are not expected to be made; major adverse impacts on the environment are expected to be prevented by adequate measures Table Main Tourism Development Bases Main Tourism Development Bases Tourism Circuits Development of Xining City as a Tourism Base Xining City as Tourism Base (MX-1) Development of the Huzhu Ethnic Tourism Zone Xining City as Tourism Base (MX-2) Qinghai Lake 151 Diji (MQ-1) Qinghai Lake Tourism Circuit Jinyin Beach (MQ-2) Qinghai Lake Tourism Circuit 8-12

21 Main Tourism Development Bases Qinghai Lake Shadao Area (MQ-3) Rear Niaodao (MQ-4) Kanbula Park/Lijiaxia (MY-1) Guide (MY-2) Mengda Nature Park (MY-3) Tongren Religious and Culture Area (MY-4) Beishan National Forest Park (MD-1) Xianmi Forest Park (MD-2) Around Houmenzhen (MD-3) Around Dabanshan (MD-4) Tourism Circuits Qinghai Lake Tourism Circuit Qinghai Lake Tourism Circuit Yellow River Tourism Circuit Yellow River Tourism Circuit Yellow River Tourism Circuit Yellow River Tourism Circuit Qilianshan Tourism Circuit Qilianshan Tourism Circuit Qilianshan Tourism Circuit Qilianshan Tourism Circuit 8.8 Implementation Steps and Procedures for Projects As for implementation steps and procedures for tourism development projects in Qinghai, the following seven steps are necessary: 1) Developing an effective program; 2) Examining funding procurement methods; 3) Examining implementation policies for programs; 4) Examining the regulatory system; 5) Examining the tender system; 6) Improving the supervisory system (in terms of the development of facilities and infrastructure); and 7) Improving the supervisory system (in terms of management and maintenance). 8.9 Festival and Event Development Plan Festivals and events, listed on the table below, are held in the Greater Xining Area. Table List of Current Festivals and Events Held in the Greater Xining Area Place Name Season Remarks Qinghai Ethnic Art and Culture Tourism June September Festival Qinghai Province Xining City Huangzhong International Exhibition of Tibetan Carpets Summer Capital Ice Festival Qinghai Tulip Festival Round Qinghai International Bicycle Road Race Ta er Temple - Four Big Buddhist Services End of March Starting November 20th May July August 14 th day of new year on lunar calendar 15 th day of new year on lunar calendar 14 th of April on lunar calendar Traditional dance and art/garment exhibition for each ethnic group 2,000-3,000 persons For three months; started in 2005 One week during Golden Week; held in conjunction with other events This is already held on a regular basis. Tiaoqian (bouncing and dancing during Buddhist services) Yak Butter Flower Exhibition Tiaoqian 8-13

22 Place Name Season Remarks 15 th of April on lunar calendar Yukaizhang (exposition of Buddha paintings), Tiaoqian 7 th of June on lunar calendar Exposition of Buddhist painting, Tiaoqian 8 th of June on lunar calendar Circling around the principal Buddha statue, Tiaoqian 22 nd of September Wutitongdi - day service on lunar calendar 23 rd of September on lunar calendar Tiaoqian Datong Huzhu Datong June Sixth Ethnic Songs Festival Tu Nationality Cultural Tourism Festival 6 th of June on lunar calendar July Music and arts festivals for the young; 3,000 persons Youth music and arts festival; Tu Nationality ethnic products exhibition Around 3,000 persons Mengda Tianchi/Young Song Festival 6 th of June on lunar calendar Sala Food Festival July Sunhat Yellow River Crossing August Swim Competition Around 10,000 persons Xunhua Chili Festival September 4,000-5,000 persons Haibei State Photo Contest July Started in 2005 Menyuan Menyuan Yak Butter 50,000 to 100,000 persons July Flower Festival Haiyan Wang Luo Bing Wang Luo Bing Music and Arts July (in Music and Arts Festival; alternating years) Festival Ethnic culture and arts activities Gangcha, Minhe Minhe Guide Tongren Jianzha Sea Festival Qinghai Lake Tourism Festival Yellow River Cultural Tourism Festival Guide Pear Festival New Year s Services (Longwu and Nearby Temples) June Tibetan Buddhism Service Regong Cultural Tourism Festival Tongren Tiger Dance Kanbula Cultural Tourism Festival 15 th of July on lunar calendar July End of April Starting 20 th of April 8 th day of new year on lunar calendar 14 th of June on lunar calendar- July Source: Tourism Bureau of Qinghai Province 20 th of November on lunar calendar May and September Peace memorial ceremony to Tibetan sea-god, on the shores of Qinghai Lake Around 30,000 persons Performance of popular songs (including some famous singers) For 12 days, pear flower watching, product and literature exhibition, and ethnic sport competition For a half month, 11 villages participate; 3,000 persons Around 30,000 persons 3,000 persons in Tibet (supposedly animals) Held twice a year 8-14

23 8.10 Tourism Development Projects by Sector The Study Team classified tourism development projects by sector as follows: Development of historical tourism facilities and spots; Development of religious tourism facilities and spots; Development of natural and ecological tourism facilities and spots; Development of agricultural tourism spots; Development of sports tourism spots; Development of resorts and hotels; Development of ethnic villages; Development of hot spring and nursing spots; Development of facilities for local product development and sale; Development of tourism amenity facilities and bases; and Development of tourism recreation facilities and areas. Development other tourism facilities and tourism-related facilities. 8-15

24 8-16

25 Chapter 9 Promotion of a Competitive Tourism Industry 9.1 Promotion of a Competitive Tourism Industry Key Aspects to Promote a Competitive Industry in Qinghai Promotion of a competitive tourism industry vis-à-vis other provinces is very important for further development of the Qinghai tourism sector. Key aspects include. High level of customer service It is essential that Qinghai provide a high level of service to tourists. Tourists experiencing quality and high-level service will more likely have a positive impression of their trip to Qinghai and more likely to recommend Qinghai to their friends for a visit. Capable, knowledgeable, and skilled employees and management Improved employee and management capacity is also key to improving competitiveness of the industry, not only in terms of service quality, but also in terms of: (i) tourism development planning and market research; (ii) marketing/advertising capabilities; (iii) knowledge of the tourism industry and the unique characteristics of Qinghai; (iv) awareness of the latest tourism trends in the province and elsewhere; and (v) ability to quickly adapt and modify operating and marketing plans to cope with new developments. Competition in the market Competition among tourism enterprises can encourage efficiency in operations, innovations in products and services, as well as better overall service level for tourists. For instance, successful and acclaimed enterprises, with high quality service levels, will force competitors to adopt these new standards, while those that fail to adapt may eventually be forced to leave the market. Profit motive Private enterprises are in the market to earn a profit and repay investors. Public enterprises provide services to the general public and are less concerned with profit and revenue. As such, private enterprises are often the key motivators and catalysts for change and reform in how business is conducted and operations run. Outside investment in the tourism sector With further investment in the tourism industry, the competitiveness of Qinghai vis-à-vis other provinces can be improved through new ideas, innovative operational systems, and effective business models from other regions etc. Enhanced market awareness Better understanding of the tourism market and segmentation in Qinghai will help the industry to be more competitive versus other provinces, especially in terms of the planning and 9-1

26 development of new and innovative tourism attractions and industries, as well as for targeted advertising and marketing for potential tourist groups. Sufficient regulation and governance Adequate supervision and governance from the Qinghai Tourism Bureau, the provincial government, and Qinghai Association of Tourism Industry to ensure high service quality, adequate protection of tourists, as well as adherence to relevant regulations and laws is necessary to improve the competitiveness of the industry in Qinghai Recommendations to Promote Tourism Industry Competitiveness Table identifies recommendations to enhance activities by tourism enterprises and tourism bureaus for a more competitive tourism industry. Relevant tourism laws quoted below are from Regulations on the Management of Tourism in Qinghai Province, unless otherwise noted. Activities suggested by the Master Plan of Tourism Development in Qinghai Province are indicated in bold. 9-2

27 9-3 Table Recommendations to Promote Tourism Industry Competitiveness 1. High level of customer service 2. Capable, knowledgeable, and skilled employees and management 3. Competition in the market 4. Profit motive 5. Outside investment in tourism sector 7. Enhanced market awareness 8. Sufficient regulation and governance Associated Activity Improve internal service quality standards Encourage training institutions and universities to focus on quality service training Adopt international management and staff training standards Send employees to other provinces to intern and to study at management schools Encourage training that focuses on the big picture and medium- to long-term perspectives, rather than just tomorrow s bottom line Encourage the implementation of employee incentive programs Provide government accolades to enterprises with innovative and high levels of service Strengthen tourism laws and regulations to upgrade service quality and tourism safety (applies to Article 13, 17, 22, 25, 27) Revise permit laws to improve management and service functions of the tourism industry (applies to Articles 17 and 24) Require a minimum of proven experience in a given industry before granting entry rights Encourage small operators to cooperate and work together to improve efficiency and service levels Establish a modernization center for corporate systems (the establishment of such a center in Xining has been under consideration) Introduce tourism information system (applies to Article 16) Introduce tourism information system to let potential investors familiarize themselves with the market and its recent trends (applies to Article 16) Encourage private and public enterprises to improve corporate management, internal financial bookkeeping, accounting, and costing systems, so that submitted data to the tourism information system are valid Introduce monitoring and indicator systems to assess industry health, based on the tourist information system (applies to Articles 16 and 28) Introduce system to encourage all tourists to submit feedback surveys directly to the Tourism Bureau Improve market research and marketing capabilities of the Tourism Bureau Th e Study on Comprehensive Tourism Development

28 High level of customer service 2. Capable, knowledgeable, and skilled employees and management 3. Competition in the market 4. Profit motive 5. Outside investment in tourism sector 7. Enhanced market awareness 8. Sufficient regulation and governance Associated Activity Encourage diversity in the marketplace Encourage process innovation (efficiency) instead of product innovation, which can be copied Support the local tourism industry by establishing a specific development fund (people s fund) (applies to Article 14 and mentioned in the Policy Report for Qinghai Province to Encourage Non-Public Investment) Strengthen development policies to promote local community participation and leadership of the tourism industry (applies to Article 14) Improve laws protecting against the inequitable exploitation of the local community, ethnic minorities, women, and other underprivileged groups Re-establish a property rights protection system (intellectual and cultural one) Encourage public tourism enterprises to follow the example of the private sector and to adopt key reforms that improve efficiency and cost savings Encourage small operators to cooperate and work together to improve efficiency and service levels Encourage spinning off of all public enterprises, to make them self-sufficient Actively seek foreign investment by attaching Qinghai officials to foreign delegations to attract investment Expand international and domestic advertising and investment promotion of the tourism industry in Qinghai Provide incentives for investment in unique and indigenous industries in Qinghai (such as salt manufacturing, power generation, and herbal medicines), which have tourism attraction potential Encourage foreign investment through better advertising, promotion, and outreach Continue to improve and expand basic facilities/infrastructure (i.e., transport/utilities) Encourage tourism enterprise to transparently maintain records and truthfully submit key information and operating performance for the tourism information system/database Enhance the capabilities of the marketing research and marketing/advertising units of the Marketing Department of the Tourism Bureau Introduce official Qinghai labeling and certification system for souvenirs/products to guarantee authenticity, quality, and workmanship (this is under consideration by the Tourism Bureau) Th e Study on Comprehensive Tourism Development

29 9.2 Improvement of Market Share and Tourist Base Key Aspects Necessary to Improve Market Share and Tourist Base Key aspects to improve market share and tourist base of Qinghai are as follows. Branding of Qinghai to tourists Qinghai should be advertised and promoted in a manner that focuses on its inherent original and unique tourism products, so that it stands out as a tourism destination on its own right. High quality of tourist sites/events/souvenirs Quality and authenticity of attractions, sites, souvenirs, festivals, performances, etc. need to be maintained to increase the competitiveness of Qinghai. Broad diversification of tourism products To improve potential tourist interest in Qinghai, the type and scope of tourism products and services should be diversified. Unique and indigenous industries, not found outside of Qinghai, should be promoted and developed in particular. Innovation in tourism products and services New ideas (for tours or advertising campaigns), concepts (marketing slogans), and processes (management or operational) can improve the competitiveness of the tourism sector as well Recommendations to Improve Market Share and the Tourist Base Table identifies recommendations to further improve market share and the tourist base in Qinghai. Relevant tourism laws quoted below are from the Regulations on the Management of Tourism in Qinghai Province, unless otherwise noted. Activities suggested by the Master Plan of Tourism Development in Qinghai Province are indicated in bold. 9-5

30 9-6 Table Recommendations to Improve Market Share and the Tourist Base 1. Branding of Qinghai to tourists 2. High quality of tourist sites/ events/souvenirs 3. Broad diversification of tourism products 4. Innovation in tourism products and services Associated Activities Improve the promotion of Qinghai s special and unique characteristics to domestic/international tourists Promote Tu, Sala, and other ethnic minorities more vigorously (as the main focus is on the Tibetan culture) Improve the promotion of Qinghai s special and unique characteristics to potential investors Promote unique and indigenous industries in Qinghai to improve investor awareness Provide incentives for investment in unique and indigenous industries in Qinghai (such as salt manufacturing, power generation, and herbal medicines), which have tourism attraction potential Support the local tourism industry by establishing a specific development fund (people s fund) (applies to Article 14 and mentioned in the Policy Report for Qinghai Province to Encourage Non-Public Investment) Strengthen the development policies to promote local community participation and leadership of the tourism industry (applies to Article 14) Improve laws protecting against the inequitable exploitation of the local community, ethnic minorities, women, and other underprivileged groups (working conditions, salary) Prepare model and standards for agricultural and livestock farmers to participate in tourism (applies to Article 14) Provide government assistance for traditional folk tourism, industrial tourism, farm tourism, and sports tourism, etc. that are unique to Qinghai Promote folk art groups and strengthen their programs Assure local participation in cultural festivals, pilgrimages, etc. to maintain authenticity and heritage value Focus on making souvenirs and folk arts unique to Qinghai Introduce tourism information systems (applies to Article 16) Enhance the capabilities of the marketing research and marketing/advertising units of the Marketing Department of the Tourism Bureau Introduce official Qinghai labeling and certification system for souvenirs/products to guarantee authenticity, quality, and workmanship (this is under consideration by the Tourism Bureau) Provide government accolades to enterprises with innovative and high levels of service Create unique and innovative tourism products (for instance through the promotion of indigenous industries, which have tourist attraction potential) Widen tourism attractions, sites, and products Re-establish a property rights protection system (intellectual and cultural one) Create multi-functional websites (perhaps through the trade association) to give tourists a range of travel choices, resources, and services that allow direct purchase of services with a credit card The Study on Comprehensive Tourism Development

31 Chapter 10 Improvement Plans for the HRD and Regulatory Systems 10.1 HRD Strategy Scaled Expansion of Human Resources in the Tourism Sector Since the tourism industry in Qinghai will grow rapidly up to 2010, large-scale expansion of human resources in the sector is required through expansion of related institutions (adding capacity) and short-term training in various areas. Personnel trained after 2010 will replace retired workers, which will maintain and hopefully improve tourism-related knowledge in the sector. Capacity Expansion Strategies for Training Institutions Four-year program at universities and a master s program Adding capacity to universities offering four-year programs should be gradual since the program has the capacity to train more students than the market expects (for instance by the total capacity could reach 320 students per year - making tourism graduates among the most numerous of all academic fields in the province). The creation of a nature tourism department and a master s program should be included within this expansion program. Three-year program at universities and upper level vocational schools Three-year programs at universities and vocational schools provide practical skills that can be applied to various levels (from frontline staff to managers). Additional capacity expansion is desired to reach some 940 graduates by Intermediate level vocational schools The New Century Vocational School already has a plan to increase its capacity and is currently constructing classrooms. As such, it can serve as a center for the expansion of human resources at the frontline level (up to 800 students annual). Hotel management courses should be included in the expanded curriculum. Short-term Training in Areas with High Tourism Demand All educational institutions with tourism departments are located in Xining City. Ninety-five percent of all tourism sector employees are also located in Xining. Other areas where tourism is expected to grow (such as Haiyan and Gonghe Counties, respectively) can be targeted for human resources expansion as well. This will help to create employment outside Xining. The training will be mainly short-term (around one month) to impart knowledge about basic skills and hospitality at hotels. Trainees will be high school graduates, aiming to be frontline staff. Training should be promoted among unemployed youths from areas collaborating with the Labor Bureau. Dispatched teachers will be from universities or vocational schools. 10-1

32 Advancement of Human Resources in the Tourism Sector The following four points detail the advancement of human resources in the tourism sector: Expansion of educational institutions needs to satisfy quality as well as quantity requirements. For this purpose, improvement of teacher skills is also very important; Advancement of hotel employees is especially important for the tourism industry, since hotel staff accounts for most of the human resources in the sector. When hotel staff welcomes visitors with a high level of skills and hospitality, visitors will be satisfied even if hotel facilities are not perfect; High-level travel guides with qualifications above intermediate levels are very limited in the province. It is necessary to train travel guides to advanced levels; and Interpreters can lead tourists towards a better understanding of environmental protection issues as well as local nature and culture. They can also help to raise visitor awareness of the area and prevent visitors from denigrating the environment. Re-Training of Teachers (Universities and Vocational Schools) This study suggests the sending of tourism teachers (from universities and vocational schools) to hotels and/or travel agencies for one month, with the objective of giving them practical experience in the tourism sector. Teachers can choose which department to work in, given their interests and expertise. Obtaining practical experience, teachers will be able to best revise curricula and training courses in their schools. In addition, teachers are expected to undergo similar training in more advanced tourist areas such as Xi an and Lanzhou (for two weeks). This will enable them to compare training regimes in Qinghai and other areas - thereby giving teachers deeper knowledge and expanded skills to revise the curriculum effectively. Re-training of Hotel Employees It is recommended to implement hotel service and hospitality training from trainers from major accredited hotels from more advanced tourism areas. The purpose of this training would be to teach staff better skills and hospitality awareness. It is also important to offer appropriate incentives to attend and perform well (for instance pay-rise and promotion incentives). Training of Certified Tour Guides Another recommendation is that the Qinghai Tourism Education Center holds a seminar every two months for the primary level of tour guides. The seminar is to be conducted by model guides (over the intermediate level) and is to include practical on-the-job training and role-playing as well as lectures. Practical on-the-job training starts from trainees (travel guides at the primary level) simulated guides, followed by practical advice from model guides. 10-2

33 In addition, this study recommends that voluntary teachers from JICA (JOCV), currently assigned to Qinghai University and the Qinghai Nationalities University, can hold regular Japanese classes for hotel employees and travel guides. This class will include practical curriculum such as role-playing. Training of Interpreters This study recommends travel guides in national parks being trained as interpreters. An interpreter in this sense is a person that can explain the relationship between human beings and the environment, so that visitors can better realize the importance of the environment and its protection. An interpreter can be a messenger from nature. This concept was developed recently (for example, Japan started to use interpreters in the 1980s). At national parks with distinct and unique cultural and historical backgrounds (such as Kanbula), the guides should tell tourists of the local cultures and the inherent nature resources. Locals can also serve as interpreters here (even if they cannot speak Chinese, they can serve as interpreters with the help of a translator). This effort could support locals with additional employment opportunities. Training curricula should be developed by the Qinghai Tourism Bureau, in collaboration with specialists from overseas, from tourism-advanced areas, as well as locals. The training should consider distinct local customs, history, religion, etc Costs and Schedule Table shows project costs and intended project schedules for human resources development. 10-3

34 Table Costs and Schedule of Projects for HRD Activity Total (1,000s of RMB) Scaled expansion of HR 42,855 Advancement of HR Training development (included in each cost) Re-training of teachers 190 Training at hotels 84 Training at travel agencies 56 Training at 50 tourism-advanced provinces Re-training of hotel 98 employees Training at tourism-advanced provinces 44 Training by trainers from 54 tourism-advanced provinces Training of certificate travel 33 guides Practical training sessions 18 Language classes 15 Training of interpreters 90 Curriculum development 10 Training 80 Total 49, Improvement Plans for Tourism Legislation and Related Institutions Tourism Legislation Strategy and Implementation Systems Developed legislation and effective implementation systems are necessary to regulate and/or promote tourism in Qinghai effectively. This study recommends developing related regulations and implementation system for smooth tourism activities as described below. Improvement of the Legislative System The Department of Policy and Regulations within the Qinghai Tourism Bureau is mainly charged with the improvement of tourism related legislation. For example, regulations related to tourist protection are recommended for development as follows: Enact regulations related to tourist protection by applying existing regulations to Qinghai as follows: (i) Provision on the Liability Insurance of Travel Agencies ; (ii) Interim Provision on Travel Claims ; (iii) Interim Procedures on the Management of Travel Safety ; and (iv) Detailed Rules for the Implementation of the Interim Implementation Rules of Procedures on the Management of Travel Safety ; and Enact the Regulation on Agreement between Enterprises and Users to protect users entering into an agreements. 10-4

35 After establishing such legislation, the Qinghai Tourism Quality Control Office should be primarily involved in the development of an implementation system to ensure safe travel of tourists Strengthening of the Qinghai Tourism Bureau Improvement of Staff Training System This study recommends that the Department of Human Resource Development should increase training opportunities for staff in the Bureau by: (i) developing training programs for the staff based on interviews and discussions (these programs should be adopted as HRD strategies by the Bureau and should be appropriately funded); (ii) holding internal seminars so that staff that have participated in training and exchange programs outside of Qinghai can explain what they have learned (this will help to share information with staff lacking such training and to build capacity within the Bureau). Capacity Building of Management Skills for Environmental Protection Plans (Department of Planning and Construction) The Department of Planning and Construction in the Qinghai Tourism Bureau is responsible for completing master plans, feasibility studies and surveys, construction works, and business management of projects. Thus, it is necessary that the Department is aware of the importance of environmental protection and can include practical ideas for environmental protection into development plans, so that the plans do not harm the environment. For that purpose, officers in the bureau can join exchange programs with coastal areas in China that possess greater environmental protection know-how. In addition, the Department should more closely cooperate with other bureaus involved in environmental protection such as the Forestry Bureau and the Nature Protection Bureau to develop effective plans for environmental protection. Improvement of the Regulatory Framework (Qinghai Tourism Quality Control Office) The Qinghai Tourism Quality Control Office will become more and more important, as the number of tourism enterprises increases. The Office should build its capacity to manage and supervise related enterprises more effectively, cooperating more closely with other bureaus and the mass media. If necessary, the outsourcing of some tasks to the Qinghai Association of Tourism Industry, and/or the transferring of staff from other departments in the Bureau can also be considered. 10-5

36 Improvement of Marketing to Attract Tourism Demand (Department of Marketing and Advertising) Capacity building of the Department of Marketing and Advertising is necessary. One solution is to increase its scale by increasing the number of departments and separating the marketing and advertising divisions. In addition, the Department can be further enhanced by hiring private agencies such as marketing research companies and advertising agencies. Outside know-how will help to build the capacity of staff members in the department Capacity Building of the Qinghai Tourism Association The role of the Qinghai Tourism Association will increase with greater collaboration between the government and the private sector for tourism development. The Association ties these two entities together. As such, it is important for the association to enhance its capacity to provide business-related information and management methods to its members. The following steps can strengthen the capacity of this Association: Promoting more enterprises to join the association to have more activities among members; Enhancing interactions between groups to strengthen connections in the sector; Establishing improved schemes to share information among members; and Collecting fees from all members. Plans for the transfer of responsibility for accrediting hotels (i.e., the star ranking system) from the tourism bureaus to the Association have been in the works. This will bring benefits to the Bureau and the Association - for instance reducing the scope of responsibilities assigned to the Bureau, producing more professional ratings, and generating higher income for the Association by charging fees from hotels to rate them. This being said, its ability to audit may be unbiased in that all hotels are members of the Association. If this responsibility is shifted to the Association, auditors should familiarize themselves with the national ranking standards applied in more tourism-advanced areas (such as Beijing and Shanghai), as some have noted that the standard of ratings in Qinghai is below that applied in other areas. 10-6

37 Chapter 11 Expansion of Funding Procurement Methods 11.1 Current Funding Procurement Methods Funding sources for investment in Qinghai s tourism sector over the last five years are classified as follows. (1) Central Government Funding In Qinghai Province, government bonds have been allocated for tourism-related infrastructure projects, such as tourism roads, electricity supply facilities, waste disposal facilities, and water supply and sewerage systems at tourist sites. These amounted to about 240 million RMB in the five-year period from 2000 to However, the government s financial policy for 2005 shifted from that of a pro-investment one to a relatively neutral one, meaning that the issuance of government bonds was drastically curtailed. The volume of government bonds issued will be reduced after 2006, which means that the number of projects funding by government bonds will also be decreased. (2) Local Government Funding The Government of Qinghai established a policy to foster the tourism industry and has strongly invested in the industry via a tourism development fund from the provincial governmental budget since Although the tourism development fund increased from 6 million RMB in 2000 to 10 million RMB in 2004, respectively, the amount itself is still small and funding is primarily for small tourism development projects at the prefecture level. (3) Private and Foreign Capital Private investment in Qinghai s tourism sector generally follows these two trends: Investment has largely targeted hotel development; and Private investment in tourist sites and facilities is rarely found, except for certain mid-scale tourism facilities (including ski resorts and ethnic villages). Foreign capital investment in the sector is also scarce, although capital from Taiwan has been used to develop facilities around the shores of Qinghai Lake Expansion of Funding Procurement Methods Chapter 4 described how various funding procurement methods are conceivable for tourism development according to various tourism industry development stages. Securing long-term and large-scale investment is absolutely necessary in Qinghai. As such, the Study Team identified five funding procurement methods applicable to Qinghai as shown below. 11-1

38 (1) Government Funds Although investment through government financing will be important and absolutely necessary over the long haul (especially considering the conceptual development stage and the current investment climate in Qinghai), the number of projects financed by government bonds will decrease considerably after Therefore, encouragement to the government to conceive of new funding schemes will be required. Liaoning Province and Shanghai s Pudong New Area are partners with Qinghai Province in a scheme that supports the development of western areas by central government agencies as well as the eastern coastal provinces. Qinghai must aggressively seek more partners for additional tourism development, while at the same time acquiring tourism development and funding procurement know-how. (2) Bank Financing Bank financing should be actively utilized, in addition to government funds, to secure tourism development funds. Such institutions include: National Development Bank: One development bank exists in China and it currently actively assists the Great Western Development Initiative. Local governments and the entity in charge of western development need to map out their plans and garner needed support; Commercial Banks: Such institutions require a security provided by a large stockholder or the local government; and International Financing Institutions: Investment and loans from international financial institutions have their merits (including a long-term payback period and low interest). As such, Qinghai Province should encourage such institutions to support Qinghai as a major engine for the development of China s western areas. Table gives a brief overview of the major international financial institutions. Table Primary International Financing Institutions International Financial Contributions Institute 1 World Bank (WB) Loan to Qinghai accounts for only 0.4% of the total investment. Twenty-four projects have been implemented from The loan amount was US$3.4 billion, or about 27.4 billion RMB. Funds were concentrated in the western area development, urbanization, etc. 2 Asia Development Loans concentrated in transportation, energy, and environment. Bank (ADB) The redevelopment of the Silk Road was a primary target for Central Asia. Assistance to the western area as well as a poverty-alleviation 3 Japan Bank for International Cooperation (JBIC) program was prioritized in the plan for JBIC is the implementation agency for loans from the Japanese Government. Loans will be terminated after

39 (3) Tourism Industrial Funding Adoption of an industrial fund is worthy of consideration as a funding procurement method to integrate loans and investments. The industrial fund will target identified prospective industries and seek longer-term profits. The Chinese Government is now expanding the establishment of such an industrial fund. This scheme should be examined as a new method of loans for the Qinghai tourism industry. (4) Project Financing Project financing is a fund procurement method that does not require trust be placed on the project founder as instead, investor profits are secured through operating and project revenues. This method is not particularly applicable for the development of infrastructure, but is fully applicable to the development of specific tourism facilities. As such, examination of a BOT (Build-Operate-Transfer) scheme by advancing the project financing method may be valuable. (5) Trust Financing Trust financing is a method to procure loans on the security of a tourism facility and on the entitlement to profits (such as those from admission fees). The loans costs, however, are relatively high at 9-12%. 11-3

40 11-4

41 Chapter 12 Project Implementation Plans 12.1 Gradual Implementation Plan To keep accommodation development consistent with the quality and quantity of demand required, infrastructure development programs supporting tourism facilities are necessary in the Greater Xining Area (with expected tourists numbering 9.85 and million in 2010 and 2020, respectively). Developing a control and management structure for preservation and conservation of tourism resources, such as natural resources and historical heritages defining the tourism in the Greater Xining Area, is necessary. Later, enforcement of these development and preservation programs, as well as subsequent expansion of marketing and promotion programs to develop tourism market are also needed. In addition, human resource development, program implementation, and tourism management restructuring to implement these development and preservation programs are necessary. Simultaneous implementation of these will be ineffective - as such as gradual implementation is recommended according to the inherent demand. (1) Development Facilities and Infrastructure for Tourism Development of tourism facilities and infrastructure lags behind the growth in tourists (512,000 visitors in 2004). Investment to develop physical facilities and infrastructure is to be concentrated in short-term programs in order to meet tourism demand for Costs for tourism facility development will be about 11.9 billion RMB, while that for infrastructure development will reach about 3.6 billion RMB, representing more than 95% of the total amount and about 60% of the total in the medium- and long-term periods, respectively. (2) Market Development Subsequent expansion for the short-, medium-, and long-term is necessary for marketing and promotion programs. This will amount to some million RMB in the medium-term (1.3% of the total) and to some million RMB in the long-term (3.9% of the total), respectively. (3) Preservation of Environment and Historical Heritage System development for resource preservation and conservation, as well as the implementation of preservation programs is required to continually utilize the natural environment, as well as heritage and cultural resources that are important for tourism in the Greater Xining Area. The total sum will amount to 210 million RMB in the medium-term (1.3% of the total) and million RMB in the long-term (1.5% of the total), respectively. (4) Enhancement of Implementation and Management Structure The short-term amount of 140 million RMB and the medium-term amount of 290 million RMB are required for: (i) appropriate encouragement, management, and control of tourism development; (ii) implementation of infrastructure development programs to attract 12-1

42 investment; (iii) expansion of public and private sector market development; and (iv) structural strengthening of resource preservation and conservation efforts. (5) Human Resource Development In terms of tourism-related human resources, the system of fostering talent and skills is less advanced than the existing number of tourist and the development of current tourism facilities. A top-heavy investment of 85 million RMB is necessary for human resource development for 2010 (this is a short-term target) Amount of Development Investment Table shows the amount of development investment by sector. Table Amount of Investment for Development Sector Total (10,000 RMB) Tourism Base Development 426, % 228, % 654, % Tourism Spot Development 175, % 235, % 410, % Accommodation Facility Development 587, % 352, % 940, % Total Investment in Tourism Facility 1,189, % 816, % 2,005, % Development Facility and Infrastructure Development 360, % 244, % 605, % Environment Preservation 14, % 3, % 18, % Historical Heritage Preservation 6, % 13, % 20, % Market Development 22, % 44, % 66, % Strengthening Implementation and 1, % 2, % 4, % Management Structure Human Resource Development 8, % % 8, % Aggregate Total 1,603, % 1,125, % 2,728, % Source: JICA Study Team 12.3 Implementation Schedule Implementation schedules of each project are shown in Table

43 Table Enforcement Schedule of Tourism Development Projects in Greater Xining Planning detailed design, design for execution, funding procurement, etc Implementation construction, expansion, reformation, etc Medium Short Term Sector Code Name Implementation Organization Term Long Term Tourism Bases MX-1 Development of Xining City as a tourism base Xining city (Tourism facilities - private, infrastructure - public) Planning and design Development of Xining City as a tourism base (to develop, manage, and assure quality of tourism bases) Tourism Bases MX-2 Tourism base development in the Huzhu Ethnic Tourism Area Huzhu County (Tourism facilities - private, infrastructure - public) Planning and design Improvement of development, management, and quality of the Tu Nationality Ethnic Tourism Base Tourism Spot SX-3 Tourism spot development program Related city and prefectures (Tourism facilities - private, Planning and Diversification through subsequent development and improvement of tourism areas in the Xining tourism area infrastructure - public) design Tourism Bases MX-1 Development in the Qinghai Lake 151 Diji area Qinghai Province Tourism Group Co., Ltd (Tourism facilities - private, infrastructure - public) Detail design Improvement of development, management, and quality of plateau resort bases, tourism areas, and tourism facilities Tourism Bases MX-2 Tourism base development at the Atomic Museum and Yinjin Beach Haiyan County (Tourism facilities - private, infrastructure - public) Improvement of development, management, and quality through existing plans Tourism Bases MX-3 Tourism base development in the Qinghai Lake Shadao Area Qinghai Lake Nature Protection Zone Management Bureau - Haiyan County (Tourism facilities - private, infrastructure - public) Biological research and Reexamination of the preservation plan, subsequent expansion of facility development in ecological tourism bases, improvement of management in coordination with the Tourism Bases MX-4 Tourism bases development in the Rear Area of Bird Island and Shatuo Temple Tourism Spot SX-5 Tourism spot development on the Qinghai Lake Tourism Circuit Tourism Bases MY-1 Tourism base development in the Kanbula/Lijiaxia area Tourism Bases MY-2 Tourism bases development in the Guide Tourism Bases MY-3 Tourism base development in the Mengda National Nature Protection Zone Tourism Bases MY-4 Tourism base development for Tongren Tibet Buddhism and the Regong Culture Tourism Spot SY-5 Tourism spot development on the Yellow River Tourism Circuit Tourism Bases MD-1 Tourism base development in the Beishan Forestry Park Tourism Bases MD-2 Tourism base development in the Xianmi National Forestry Park Qinghai Lake Nature Protection Zone Management Bureau - Gangcha County (Tourism facilities - private, infrastructure - public) Qinghai Lake Nature Protection Zone Management Bureau - Related Counties (Tourism facilities - private, infrastructure - public) Kanbula Forest Park/Geological Park Management Organization - Jianzha and Hualong Counties (Tourism facilities - private, infrastructure - public) Guide County (Tourism facilities - private, infrastructure - public) Mengda Nature Protection Zone Management Organization - Xunhua County (Tourism facilities - private, infrastructure - public) Tongren County (Tourism facilities - private, infrastructure - public) Related prefectures (Tourism facilities - private, infrastructure - public) Beishan Forest Park Management Organization - Huzhu County (Tourism facilities - private, infrastructure - public) Xianmi National Forest Park Management Organization - Menyuan County (Tourism facilities - private, infrastructure - public) conservation plan Planning and design Planning and design Detail design Planning and design Conservation Plan, Planning and designing Planning and design Planning and design Planning and design Planning and design Operation Qingzang Railway Improvement of the preservation of the Luandao Bird Island Core Zone and development and management of the Rear Bird Island and Shatuo Temple Area Diversification through subsequent development and improvement of tourism areas Improvement of development in the Kanbula (Jianzha County) and Lijiaxia (Hualong) centers, connection network development, management, and quality Improvement of development, management, and quality Development and management in the protected area, network development in the testing area, and improvement of ecological tourism Improvement of facility development, management, and products in collaboration with the cultural preservation programs in Tongren. Diversification through subsequent development and improvement of tourism areas Development of ecological tourism areas/networks, sports and recreation facilities Teaching of Tibetan culture and development of ecological tourism areas and networks Tourism Bases MD-3 Tourism base development in the Haomenzhen and Qingkouzuizhen areas Tourism Bases MD-4 Tourism base development in Datong and around Dabanshan Tourism Spot SD-5 Tourism spot development on the Accommodation Facility Accommodation- 1/8 Menyuan County (Tourism facilities - private, infrastructure - public) Datong County - Chahanhe Forest Park Management Organization (Tourism facilities - private, infrastructure - public) Related prefectures (Tourism facilities - private, infrastructure - Qilianshan Tourism Circuit public) Development of five-star hotels Hotel (private), infrastructure (public) Planning and design Planning and design Planning and design Improvement of the development, management and quality of tourism bases and areas Improvement of the development, management and quality of tourism bases and areas Diversification through subsequent development and improvement of tourism areas 12-3

44 Sector Code Name Implementation Organization Accommodation Facility Accommodation Facility Accommodation Facility Accommodation Facility Accommodation Facility Accommodation Facility Environment Preservation Environment Preservation Environment Preservation Environment Preservation Environment Preservation Environment Preservation Heritage Preservation Heritage Preservation Market Development Market Development Accommodation- 2/9 Accommodation- 3/10 Accommodation- 4/11 Accommodation- 5/12 Accommodation- 6/13 Accommodation- 7/14 Environment-1 Development of four-star hotels Hotel (private), infrastructure (public) Development of three-star hotels Hotel (private), infrastructure (public) Development of two-star hotels Hotel (private), infrastructure (public) Development of one-star hotels Hotel (private), infrastructure (public) Development of tent villages Hotel (private), infrastructure (public) Development of guesthouses Hotel (private), infrastructure (public) Enhancement of structure for ecological tourism and environment control Short Term Medium Term Long Term Bureau of Nature Environment Protection and local government Project program Environmental education, monitoring, and control Environment-2 Grassland improvement programs Agency of Agricultural and Animal Husbandry, and local government Environment-3 Landscape preservation on tourism Agency of Agricultural and Animal Husbandry, Bureau of Nature circuits Environment Protection and local government Environment-4 Landscape spot preservation Agency of Agricultural and Animal Husbandry, Bureau of Nature Environment Protection and local government Planning and structure Planning and structure Planning and structure Environment-5 Tourism and landscape campaign Tourism Bureau, Construction Agency and local government Planning and structure Environment-6 Preservation of water quality of Local government Planning and Qinghai Lake design Heritage-1 Archeological heritage preservation Culture Agency, Tourism Bureau, and local government Archaeological and utilization for tourism research Heritage-2 Preservation program for the Culture Agency, Tourism Bureau, Construction Agency, and local Planning and historical cityscape government structure Market-1 Renewal and new development of Tourism Bureau, tourism industry, and local government promotion material Market-2 Renewal of publicity poster Tourism Bureau, tourism and transport industry, and local government Planning, implementation, and development of structure and programs for grassland improvement through local participation Planning, implementation, and development of structure and programs for grassland improvement through local participation Planning, implementation, and development of structure and programs for landscape preservation, while coordinating with the development of viewing sites through local participation Planning, implementation, and development of structure and programs for grassland improvement through local participation Development of drainage pipes and treatment facilities Implementation of preservation and tourism application programs Planning, implementation, and development of structure and programs for grassland improvement through local participation Market Development Market Development Market Development Market Development Market Development Market Development Market Development Market Development Market-3 Release of tourism news letter Tourism Bureau and tourism industry Market-4 Preparation of DVD for advertising Tourism Bureau and tourism industry and promotion Market-5 Promotion at tourism fairs Tourism Bureau and tourism industry Market-6 Implementation of SIT Tourism Bureau and tourism industry Market-7 Market-8 Market-9 Market-10 Expansion of tie-up and partner campaigns Utilization of the Qinghai liaison offices in federal municipalities or in the eastern coastal areas Strengthening of the Great Northwest Development Initiative, promoting partnership activities Inspection and training in neighboring areas with more advanced tourism sectors Tourism Bureau and tourism industry Tourism Bureau Tourism Bureau and neighboring provinces Tourism Bureau, tourism industry, and neighbor provinces Planning and preparation 12-4

45 Sector Code Name Implementation Organization Market Development Market Development Implementation and Management Implementation and Management Implementation and Management Implementation and Management Implementation and Management Human Resource Development Human Resource Development Human Resource Development Human Resource Development Human Resource Development Human Resource Development Human Resource Development Human Resource Development Market-11 Widening of Internet utilization Tourism Bureau and tourism industry Market-12 Establishment of a tourist Tourism Bureau and tourism industry information center Management-1 Business advisory system Tourism Bureau and tourism industry Short Term Medium Term Long Term Planning and preparation Management-2 Structure strengthening of the Qinghai Tourism Bureau Tourism Bureau Management-3 Project for promoting mutual aid Tourism Bureau, Government of Qinghai, and tourism industry Discussion and (partnership) preparation Management-4 Enhancement of a tourism Qinghai Province Tourism Group Co., Ltd. (Qinghai Tourism Discussion and development agency Bureau) preparation Management-5 Investment promotion seminar for Tourism Bureau, Government of Qinghai, and tourism industry tourism development HRD-1 Capacity expansion at universities Qinghai University, Qinghai Normal University, and Qinghai Planning and University for Nationalities preparation HRD-2 Capacity expansion at universities Qinghai University, and Qinghai University for Nationalities Planning and preparation HRD-3 Capacity expansion at vocational New Century Vocational School, Qinghai Professional Development Planning and schools School for Transport, Xining First Vocational School, and Xining preparation International Business and Tourism School HRD-4 Expansion of Xining Hotel Training Xining Hotel Planning and Center preparation HRD-5 Re-training of teachers from Noted universities and vocational schools Planning and universities and vocational schools preparation HRD-6 Re-training of hotel employees Tourism Bureau and tourism industry Planning and preparation HRD-7 Training of certified travel guides Tourism Bureau and tourism industry Planning and preparation HRD-8 Training of interpreters Each administrative bureau and tourism bureau Planning and preparation Development 12-5

46 12-6

47 Chapter 13 Selection of Priority Projects 13.1 Evaluation Criteria and Standards for Selecting Priority Projects To select priority projects to be targeted for a feasibility study among the 14 priority candidate areas requiring tourism facilities in the Greater Xining Area, the Study Team applied evaluation items and criteria as shown in Table below, and then evaluated potential projects in three stages for each evaluation criteria. Table Evaluation Criteria and Standards for Selecting Priority Projects Evaluation Items 1. Economic growth through tourism development 2. Environmental preservation 3.Human resource development and institutional development 4. Necessity 5. Feasibility Evaluation Criteria 1.1 Effect on income of citizens 1.2 Effect on employment opportunity 1.3 Effect on sustainable benefit 1.4 Spillover effect on whole regional economy 2.1 Improvement of the natural environment Adverse impacts on the natural environment 2.2 Effect on cultural environmental preservation (resource control and utilization of historical, religious, and ethnic cultures) 2.3 Effect on industrial security for traditional industries (utilization of traditional industries) 2.4 Effect on landscape conservation 2.5 Enlightenment effect on preservation of tourism resources (awareness-raising of citizens) 2.6 Enlightenment effect on landscape and hygienic practices (awareness-raising of citizens) 3.1 Human resource development (tourism industry and government) 3.2 Institutional development (enhancement of structures, establishment of new organizations, coordination among entities, etc.) 4.1 Strategic characteristics (position and role) 4.2 Strategic characteristics (new market) 4.3 Strategic characteristics (demand) 4.4 Urgency 5.1 Consensus 5.2 Implementation structure 5.3 Management and operational structure Source: JICA Study Team 13.2 Selection Result of the Priority Projects The study team selected the following three high-scoring projects based on the evaluation. Tourism Development in the Kanbula Park/Lijiaxia Area Tourism Development in the Qinghai Lake, 151 Diji Area Tourism Development in the Qinghai Lake, Shadao Area 13-1

48 Table Evaluation Result for Selection Number Name of Project Tourism Circuit Overall Points MX 1 Development of Xining City as a Xining City as Tourism Tourism Base Base 40 MX 2 Development of Huzhu Ethnic Tourism Xining City as Tourism Zone Base 39 MQ 1 Tourism Development in Qinghai Qinghai Lake Tourism Lake, 151 Diji Circuit 45 MQ 2 Tourism Development of Jinyin Beach Qinghai Lake Tourism Circuit 34 MQ 3 Touirism Development in Qinghai Qinghai Lake Tourism Lake, Shadao Area Circuit 44 MQ 4 Tourism Development in Rear Niaodao Qinghai Lake Tourism Circuit 33 MY 1 Tourism Development in Kanbula Yellow River Tourism Park*/Lijiaxia Circuit 49 MY 2 Tourism Development in Guide Yellow River Tourism Circuit 34 MY 4 Tourism Development in Mengda Yellow River Tourism Nature Park Circuit 39 MY 5 Tourism Development in Tongren Yellow River Tourism Religious and Culture Area Circuit 39 MD 1 Tourism Development in Beishan Qilianshan Tourism National Forest Park Circuit 37 MD 2 Tourism Development in Xianmi Forest Qilianshan Tourism Park Circuit 36 MD 3 Tourism Development around Qilianshan Tourism Houmenzhen Circuit 31 MD 4 Tourism Development around Qilianshan Tourism Dabanshan Circuit 36 * Kanbula National Forestry Park and Qinghai Jianzha Kanbula National Geology Park are termed Kanbula Park. Source: JICA Study Team The Study Team set the evaluation criteria according to approach of this study that is, the optimal combination of three factors: environmental preservation, tourism demand, and tourism product. Therefore, the areas with higher potential for achieving development effects achieved higher scores. The Development of Xining City as a Tourism Base received the fourth highest score, which is the result of seeking balanced tourism development throughout the entire Greater Xining Area. The importance of additional tourism development in Xining is clear, as Xining is the gateway to the Greater Xining Area as well as to the Qingzang Plateau and Lhasa on the Qingzang Railway. The Figure shows the location of the three priority projects. 13-2

49 Source: JICA Study Team Figure Location of the Priority Projects 13-3

50 13-4

51 Chapter 14 Tourism Development in the Kanbula Park/ Lijiaxia Area The development of Kanbula Park/Lijiaxia Area includes the Dehong Gate Area, the Red Mountain Landscape Area, the Nanzong Tibetan Religious Area, and the north bank of the Lijiaxia Area. Kanbula Park and the north bank of Lijiaxia, which belong to different counties, Jianzha County in Huangnan State and Hualong County in Haidong State, respectively. As such, development in these counties is linked, for example, an accommodation shortage in Kanbula (due to zoning or development restrictions) can be covered by adding accommodations on the north bank of Lijiaxia. The development of land and water transport modes as well as tourism facilities is very important Development Concept (1) Overview of the Kanbula Park/Lijiaxia Area The table below provides an overview of the Kanbula Park/Lijiaxia Area. Item Municipality Name of village, population, and number of homes per settlement Environment Conservation Zone Distance from Xining City Table Overview of Kanbula Park/Lijiaxia National Level Contents Kanbula Park: Huangnan Tibetan Autonomous Zone, Jianzha County Lijiaxia: Hualong Hui Autonomous County Kanbula Park: the following three Tibetan villages exist Dehong Village: 145 persons and 32 houses Gawuang Village: 154 persons and 32 houses Dehong Vilalge: 225 persons and 45 houses in 2003 Lijiaxia: one household resides near the planned development area (most settlements relocated at the time of construction of the dam) Kanbula National Forestry Park, Qinghai National Geological Park of Jianzha, Kanbula Car (present) 3.0 hours (2.0 hours to central Kanbula, 1.0 hour to Dehong) Car (Future) hours (on the Ping a Highway between Ping an and Adai). Car (Future) 3.5 hours: 2.0 hours between Xining Guide, 1.5 hours from Guide (on the Guixun Road between Guide and Kanbula) Access Route Tourist road Kanbula Tourist Road from central Kanbula Major tourism Nature Red mountains, forestry park, Lijiaxia (dam lake) resources Culture Nanzong, Tibetan community (Jianzang Village, Gawuang Village, Dehong Village, Shike Village, Kanquan Village, Wanjihe Village, and Nubu Village about 3,600 residents) Major tourism resources closeby Neighboring areas Xiqiong Temple, Yellow River 14-1

52 Major scenic resources Item Nature Culture Landscape Tourism circuit Source: JICA Study Team Contents Forests (including autumn leaves), Lijiaxia lakeview Nanzong Temples (temples and monasteries) Red Mountains in the Dehong Area, the Nanzongtan Area, and Lijiaxia lakeside Yellow River Tourism Circuit (2) Basic Development Strategies Basic development strategies are shown in Figure Objective Basic Concept Significant Concept Development of better views of the Red Mountains and blue water Comprehensive tourism point with landscape, culture, forests/lake Promotion of landscape tourism Promotion of religion and culture tourism (development of Qinghai Shangri-La) a. Dehong Gate Area Gondola to see Red Mountains Red Mountains view hotel Commercial zone modeled after a typical Tibetan community Visitor center Observatory b. Kanbula Red Mountains Landscape Area c. Trekking Route around Red Mountains Landscape d. Nanzong Religious/Cultural Area Source: JICA Study Team Promotion of Lijiaxia lake tourism e. Lijiaxia Recreation Area Visitor center Red Mountains and blue water hotel Lake tourism zone and boatslip Figure Basic development strategies for Kanbula Park/Lijiaxia area (3) Target market The target market for the concept outlined above is described below. Internal tourists: 1 Residents in closeby areas to Kanbula Park/Lijiaxia (77,000 people from three counties (Ping an, Ledu, and Minhe) as well as 1.5 million people in the Haidong District) - mass market day or overnight trips in a group or with family 2 Xining city residents (1.8 million) - mass market day or overnight trips in a group or with family Tourists from neighboring provinces: mass market with overnight trips in packaged tours 14-2

53 Tourists from coastal and more developed provinces/cities - middle class and mid-sized market, with overnight trips in packaged tours Overseas tourists (from Hong Kong, Macau, Taiwan, and other countries) - small and limited market with overnight trips in packaged tours SIT (Special-Interest Tour) tourists (nature and animal watching, trekking, pilgrimage etc) - small and limited market with individual itineraries (with stays lasting longer than one night) 14.2 Preliminary Facility Design, Layout, and Cost The proposed facility design is shown below along with the proposed layout. The total project construction cost is estimated at 798 million RMB. 14-3

54 Figure Development Areas of Kanbula Park/Lijiaxia Area 14-4

55 Figure Facility Design of Dehong Gate Area 14-5

56 Figure Facility Design of Red Mountains Landscape Area 14-6

57 Figure Facility Design of Lijiaxia Gate Area 14-7

58 14.3 Operations and Maintenance Plan and Cost Sales as well as operations and maintenance (O&M) costs are estimated for infrastructure and public facilities, as well as accommodation, eating, retail, and other related facilities Marketing Program Ten marketing programs are to be developed, totaling 7.3 million RMB in the first year, and million RMB by Environmental Protection and Tourism Plan/System The proposed program for integrating tourism promotion and environmental protection includes environmental education seminars, assistance to the community s self-management for grassland recovery, and workshops for tourism participation by members of the community Environmental and Social Considerations In this study, the Initial Environmental Examination was carried out based on an environmental scoping exercise. The Study Team foresaw the existence of adverse impacts on the environment by the implementation of the priority projects. Hence, the Study Team evaluated environmental impacts by examining prevention and ease measures, a zero option, and other alternatives in the case that priority projects would cause adverse environmental impacts Economic and Financial Analysis (1) Fund demand Table shows the total tourism funding needed by 2010 for this area. Table Tourism funding needed (Kanbula Park/Lijiaxia Area) Item Amount (billion RMB) 1 Tourism Facilities Lodging Facilities Public-service Facilities Other Public 0.04 Total 0.80 (2) Economic analysis Estimating economic project benefits and costs (between ), the economic internal rate of return (EIRR), a standard measure for project s economic impact, was estimated at 29.5%. As value-added exceeds its opportunity cost of capital (often assumed to be 12% in China), the EIRR is high enough for justifying the investment. Additional sensitivity analysis is shown in Table

59 Table Sensitivity of EIRR (Kanbula Park/Lijiaxia Area) Case EIRR Base Case 29.5% Case A Initial Cost 10% up 26.8 Case B Benefits 10% down 23.3 Case C: Combination of Case A and B 21.1 (3) Financial analysis The financial analysis assesses several plausible scenarios - with variables including the amount to be financed by the government, as well as the construction schedule. The rate of investment (ROI) was estimated by these scenarios. As the cut-off rate for ROI is often assumed to be around 10-12% in China, the estimated rates for each scenario are high enough to justify investment in the project. Table ROIs by scenarios (Kanbula Park/Lijiaxia Area) Scenario Condition ROI A Public-service Facilities financed by the Government only (0.12 billion RMB) 23.3% B Public-service Facilities and Public Utilities financed by the Government only (0.16 billion RMB) 24.1% 14.8 Project Management System and Its Procedures Figure presents the proposed project management system for this project 12. As this project covers two municipalities, appropriate collaboration is required under strong leadership from the Qinghai Tourism Bureau. Special attention need to be given to: (i) existing fauna and nature in Lijiaxia; (ii) participation of the local populace in the project; and (iii) negotiations among stakeholders. It is also important to apply/use effective technologies and knowledge in all project stages, whether in the planning, design, construction, and operation/maintenance stages. 12 Only the institutions directly involved in project implementation are shown. 14-9

60 Related organizations such as the Forestry Bureau and Environment Protection Bureau Coordinate Coordinate (Screen) Accept Kanbula/Lijiaxia Tourist Area Management Committee Qinghai Tourism Bureau Report Kanbula/Lijiaxia Scenic Area Management Committee Coordinate Local residences Coordinate Coordination Committee for Kanbula/Lijiaxia Scenic Area Development Qinghai Tourism Bureau Jianzha County Tourism Bureau (Hainan State) Hualu County Tourism Bureau (Haidong State) Inspect (Supervise) Coordina tion Supervise Investor Report Design/ Construction/ Maintenance Company Contract Notes: - All committee names are provisional. - This system mainly represents the planning stage. Major organizations involved in construction and O/M stages are within the bolded boxes. A dotted line shows required coordination activities. Source: JICA Study Team Figure Project Management System (Kanbula Park/Lijiaxia Area) 14-10

61 Chapter 15 Tourism Development in the Qinghai Lake, 151 Diji Area Tourism development in the Qinghai Lake, 151 Diji Area consists of three areas: the existing 151 Diji Area, the Erlangjian Area, and the Nanshan Area. In the future, it will also include the south bank of Qinghai Lake (including existing fisheries). Nanshan Area As a base for daytime activities involving tourism-related farmland (i.e., these are used not for agricultural purposes but for tourist lodging, recreation, etc.), the barbeque (BBQ) center, the highland sports center, as well the accommodation facilities at the foot of the mountains. Existing 151 Diji As a tourist base for daytime activities along the lakeshore, ethnic culture tourism, food and drink, and water transport, as well as at the amusement park and local industry center Erlangjian Area As a tourist base for daytime activities including waterfront sports and recreation at the lake and beach Each area should work together in the roles described below to maximize development and efficiency (coordinated management is needed among land and water transport modes in the area (between facilities)) Development Concept (1) Overview of Qinghai Lake, 151 Diji Area The table below provides an overview of the Qinghai Lake, 151 Diji Area. Although the planned development area is within the Tibetan residential area, one farm household exists at Nanshan (employees and temporary staff from outside the areas take lodgings within the existing tourist site). Table Overview of the Qinghai Lake, 151 Diji Area Item Municipality Name of village, population, and number of homes per settlement Environment Conservation Zone Distance from Xining City National Level Car Access Route National Road Gz025 (National Road 109) Content Gonghe County, Hainan Tibetan Autonomous State Although the planned development area is within the Tibetan residential area, one farm household exists at Nanshan (employees and temporary staff from outside the areas take lodgings within the existing tourist site) Qinghai Lake National Class Nature Reserve, Qinghai Lake National Scenic Tourism Zone 1.5 hours (on the highway between Xining-Huangyuang- Riyueshan) 15-1

62 Item Major tourism Nature resources Facility Major tourism resources around Major scenic resources Neighboring areas Around Qinghai Lake In Qinghai Lake Nature Culture Landscape Tourism circuit Source: JICA Study Team Content Qinghai Lake (boat), Erlangjian (sand bar), grassland, Nanshan, etc. Torpedo Museum, multipurpose hall (banquet hall), Zhangfang Hotel (including Tibetan tent-style lodgings), Tibetan community Fishery, Riyueshan, Bird Island, Shatuo Temple (near Bird Island) Qinghai Lake Shadao Area, Jinyintan Grassland, Atomic Bomb Museum, rock-painting Haixinshan (Taoist temple, castle remains), Sangui Rock (wild birds, etc.) View from Nanshan (grassland, field mustard, Qinghai Lake, Erlangjian) View from the lakefront (boat, Torpedo Museum), field mustard, grassland, Nanshan Grazing, Erlangjian, the White Pagoda Gentle slope from Qinghai Lake to Nanshan Qinghai Lake Tourism Circuit (2) Basic Development Strategies Basic development strategies are shown in Figure Objective Basic concept Significant concept Development of the base as a leisure resort around Qinghai Lake Base for tourism and accommodations for one-two days Development as a tourist base to stay and enjoy its great scenery and solitude Development as a leisure base in a prime location (lively area) a. Nanshan Resort Resort hotel b. Nanshan Recreation Zone Picnic areas Tourists Farmland Nanshan Observatory c. Underground City Highland underground city (amenity facilities) Waterfront promenade Source: JICA Study Team d. Leisure facilities Multi-purpose tents and mobile museum Mobile amusement park Open-air theater Figure Basic development strategies for Qinghai Lake, 151 Diji 15-2

63 (3) Target Market The target market for the concept outlined above is described below. Internal tourists: 1. Xining and nearby residents - mass market day or overnight trips in a group or with family; and 2. Greater Xining residents (1.8 million) - mass market with day or overnight trips in a group or with family. Tourists from neighboring provinces: mass market with overnight trips in packaged tours Tourists from coastal and more developed provinces/cities middle class and mid-sized market, with overnight trips in packaged tours Overseas tourists (from Hong Kong, Macau, Taiwan, and other countries) - small and limited market with overnight trips in packaged tours 15.2 Preliminary Facility Design, Layout, and Cost The proposed facility design is shown below along with the proposed layout. The total project construction cost is estimated at 2.18 billion RMB. 15-3

64 Figure Development Areas of Qinghai Lake, 151 Diji 15-4

65 Figure Facility Design of Nanshan Resort Area 15-5

66 Figure Facility Design of Qinghai Lake, 151 Diji Area 15-6

67 15.3 Operations and Maintenance Plan and Cost Sales as well as operations and maintenance (O&M) costs are estimated for infrastructure and public facilities, as well as accommodation, eating, retail, and other related facilities Marketing Program Eleven marketing programs are to be developed, totaling 9.2 million RMB in the first year, and million RMB by Environmental Protection and Tourism Plan/System The proposed program for integrating tourism promotion and environmental protection includes environmental education seminars, assistance to the community s self-management for grassland recovery, and workshops for tourism participation by members of the community Environmental and Social Considerations In this study, the Initial Environmental Examination was carried out based on an environmental scoping exercise. The Study Team foresaw the existence of adverse impacts on the environment by the implementation of the priority projects. Hence, the Study Team evaluated environmental impacts by examining prevention and ease measures, a zero option, and other alternatives in the case that priority projects would cause adverse environmental impacts Economic and Financial Analysis (1) Fund demand Table shows the total tourism funding needed by 2010 for this area. Table Tourism funding needed (Qinghai Lake, 151 Diji) Item Amount (billion RMB) 1 Tourism Facilities Resort Hotel Area Development Public-Service Utilities Hotels 0.35 Total (2) Economic analysis Estimating economic project benefits and costs (between ), the economic internal rate of return (EIRR), a standard measure for project s economic impact, was estimated at 19.6%. As value-added exceeds its opportunity cost of capital (often assumed to be 12% in China), the EIRR is high enough for justifying the investment. Additional sensitivity analysis is shown in Table

68 Table Sensitivity of EIRR (Qinghai Lake, 151 Diji) Case EIRR Base Case 19.6% Case A Initial Cost 10% up 17.4% Case B Benefits 10% down 14.6% Case C Combination of Case A and B 12.7% (3) Financial analysis The financial analysis assesses several plausible scenarios - with variables including the amount to be financed by the government, as well as the construction schedule. The rate of investment (ROI) was estimated by these scenarios. As the cut-off rate for ROI is often assumed to be around 10-12% in China, the estimated rates for each scenario are high enough to justify investment in the project. Table ROIs by scenarios (Qinghai Lake, 151 Diji) Scenario Condition ROI 1 Public-Service Utilities financed by the Government only (0.17 billion RMB) 26.7% 2 Public-Service Utilities and Public Utilities financed by the Government only (0.20 billion RMB) 27.6% 15.8 Project Management System and Its Procedures Figure presents the proposed project management system for this project 13. It requires development plans for facilities/infrastructure through public financing and private sector fundraising, as well as appropriate coordination in each area. This project requires larger investment than the other two. It is also important to apply/use effective technologies and knowledge in all project stages, whether in the planning, design, construction, and operation/maintenance stages (O/M). Lastly, it is important to clarify the roles of Hainan State and Gonghe County for additional cooperation. Only the institutions directly involved in project implementation are shown. 13 Only the institutions directly involved in project implementation are shown. 15-8

69 Related organizations such as the Qinghai Lake Nature Reserve Management Bureau Coordination Coordinate Coordinate (Screen) Accept Qinghai Lake Tourist Area Management Committee Qinghai Tourism Bureau Report Qinghai Lake South Bank Scenic Area Management Committee/Bureau Coordinate Local Residences Coordinate Hainan State Tourism Bureau Gonghe County Tourism Bureau Inspect (Supervise) Investor CoordinaSupervise tion Report Contract Design/ Construction/ Maintenance Company Notes: - This system mainly represents the planning stage. - Major organizations involved in construction and O/M stages are within the bolded boxes. A dotted line shows required coordination activities. Source: JICA Study Team Figure Project Management System (Qinghai Lake, 151 Diji) 15-9

70 15-10

71 Chapter 16 Tourism Development in Qinghai Lake, Shadao Area The Qinghai Lake, Shadao Area runs for about 12 km, close to the Qingzang Railway. It consists of the Shadao Gate Area in north of the railway, the Baifo Temple Area at the foot of the mountains, the Sand Hill Area, and the Lakeview Area along Haiyan Bay. At present, areas south of the railway have been registered as Core Protection Zone and Buffer Zone in the Qinghai Lake National Nature Protection Zone. This designation was originally made for the purpose of birds. On the one hand sighting of Przewalski s Gazelle, which is designated as the national first class preservation animal, in the area has been claimed and their protection advocated, on the other hand, it is also reported that Przewalski's Gazelles have been rarely seen as the area is mostly of sand dunes and lacks grassland. Similarly birds are said to move elsewhere. It appears that information on this matter is in confusion as five years past since the original designation. Vocal opinions are increasing among concerned organizations in the Province that a protection plan based on scientific surveys be formulated and that the protection zones be redrawn. Considering the above, further consideration is needed for the designation of the Lakeview Area as Core or Buffer protection zones; a reexamination of the area requires sufficient scientific natural ecological surveys. Tourism development of this area should start form the Shadao Gate Area and the Baifo Temple Area, wherein the local government has a vested interest. The development of the Lakeview Area could start only when the designation of the subject area as Core or Buffer protection zones is lifted based on results of scientific natural ecological surveys Development Concept (1) Overview of Qinghai Lake, Shadao Area The table below provides an overview of the Qinghai Lake, Shadao Area. Table Overview of Qinghai Lake, Shadao Area Item Municipality Name of village, population, and number of homes per settlement Environment Conservation Zone Distance from National Level Content Haiyan County, Haibei Tibetan Autonomous State Although the planned development area within the Tibetan residential area, there are no villages or private homes. Qinghai Lake National Class Nature Reserve Xining City Car Railway 1.5 hours (130 km from Xining City) 2.0 hours (direct train in the future) Access Route Provincial Road S310 (along Qinghai Lake, using the tourist road of from the eastern shore of the lake to central Xihai) 16-1

72 Major tourism resources Major tourism resources around Major scenic resources Item Nature Nearby areas Around Qinghai Lake In Qinghai Lake Animals/Plants Nature Culture Tourism circuit Source: JICA Study Team Content Yinsha Bai (Qinghai Lake), Sand Hill, Sand Beach, Yueya Lake, Sun Lake, Reed Lake (a desert swamp), sand dunes (around m tall) Jinsha Bay, Baifo Temple, Jinyintan Grassland, Atomic Bomb Museum, Tibetan/Mongolian Houses, Nai Sea, Shadao Lake Fishery, Riyueshan, Bird Island, Shatuo Temple (near Bird Island), Qinghai Lake 151 Didi, rock paintings, huangyu fish in Qinghai Lake Haixinshan (Taoist temple, castle remains), Sangui Rock (wild birds, etc.) Przewalski's Gazelle, water bird, reed Yinsha Bay from the lake, Sand Hill, Sand Mountain, view from Baifo Temple (Sand Hill, Yinsha Bay, Jinshawan Bay) Views of Yueya Lake, Sun Lake, Reed Lake Baifo Temple (Tibetan Buddhism) Qinghai Lake Tourism Circuit (2) Basic Development Strategies Basic development strategies are shown as Figure Objective Basic concept Significant concept Development as a tourism base for learning and entertainment Development of sports recreation involving sand and water Development of eco-tourism model zone Development of accommodations (with scenic views) a. Sand Hill Recreation Zone b. Sand Beach and Waterfront Recreation Area c. Przewalski's Gazelle Satellite Center d. Clean Energy Park e. Qinghai Shadao Hotel and Amenity Facilities Source: JICA Study Team f. Ethnic Lodge Hotel Figure Basic development strategies for Qinghai Lake, Shadao Area 16-2

73 (3) Target Market The target market for the concept outlined above is described below. Internal tourists: 1. Xining and nearby residents - mass market day or overnight trips in a group or with family; and 2. Xining city residents (1.8 million) - mass market day or overnight trips in a group or with family. Tourists from neighboring provinces: mass market with overnight trips in packaged tours Tourists from coastal and more developed provinces/cities middle class and mid-sized market, with overnight trips in packaged tours Overseas tourists (from Hong Kong, Macau, Taiwan, and other countries) - small and limited market with overnight trips in packaged tours SIT (Special Interest Tour) tourists (nature and animal watching, trekking, pilgrimage etc) - small and limited market with individual itineraries (with stays lasting longer than one night) 16.2 Preliminary Facility Design, Layout, and Cost The proposed facility design is shown below along with the proposed layout. The total project construction cost is estimated at 919 million RMB. 16-3

74 Figure Development Areas of Qinghai Lake, Shadao Area 16-4

75 Figure Facility Design of Shadao Gate Area 16-5

76 Figure Facility Design of Sand Hill Recreation Area 16-6

77 Figure Facility Design of Sand Beach/ Waterfront Recreation Center 16.3 Operations and Maintenance Plan and Cost Sales as well as operations and maintenance (O&M) costs are estimated for infrastructure and public facilities, as well as accommodation, eating, retail, and other related facilities Marketing Program Eleven marketing programs are to be developed, totaling 7.1 million RMB in the first year, and 43.4 million RMB by Environmental Protection and Tourism Plan/System The proposed program for integrating tourism promotion and environmental protection includes environmental education seminars, assistance to the community s self-management for grassland recovery, and workshops for tourism participation by members of the community Environmental and Social Considerations In this study, the Initial Environmental Examination was carried out based on an environmental scoping exercise. The Study Team foresaw the existence of adverse impacts on the environment by the implementation of the priority projects. Hence, the Study Team 16-7