As I mentioned in the blog below, there are certainly issues that need to be worked out in China’s travel/tourism industry.Â In the following article, these are elaborated on, even to the point of suggesting they are real problems that could undermine China’s ability to grow its tourism industry.
Tourism Skills Shortage in China
As a long time resident in China I have had the dubious privilege of watching the tourism and travel industries develop rapidly over the last decade. The development is the good news but the pre-development stage was a bit of a struggle for us all.
Over the last week I have read a number of articles indicating that China is going to move from being the worldâ€™s 4th largest tourism destination, with 124 million inbound tourists per year, to the worldâ€™s 2nd largest tourist destination, with countless more. This will happen over the next 10 years and it is great to hear. It means real change in peopleâ€™s lives; overseas travel for people in China and the arrival of literally millions of tourists for upcoming events like the Beijing Olympics(2008) and the World Fair in Shanghai (2010). The downside is that there will be an inevitable shortage of skills in the tourism and hospitality sectors because the growth is massive and exponential. Businesses will suffer, and in fact are suffering right now because the growth has already started. Hiring volumes are huge and the cost of candidate identification and assessment is high when the salaries on offer are below the average for all other industries. At present there is a clear shortage of Travel Consultants in China. This stems from the exponential growth of the travel industry and the fact that so few people in China have actually been abroad in the past. In an exponentially growing industry the number of people with 10 years experience tends towards zero, and the travel industry certainly follows this path. It is very difficult in China to find someone who knows about the difficulties experienced by travellers who arrive at Heathrow(London) or JFK(New York). This is simply because so few people have actually been to either of these airports. Go back only a few years and it wasnâ€™t even possible for someone in China to get a visa to go to either location. So, for example, it is very difficult for local Travel Consultants to really understand that you need 4 hours transit time when changing terminals at Heathrow. Itâ€™s hard to even envisage when your comparison is the small airport in your local city. And more importantly, itâ€™s hard to effectively advise your clients when their travel plans involve multiple locations and different time zones. In effect we are looking at a skills shortage that can never be solved with simple training. The hospitality industry is a little different because it has been growing strongly for more than 10 years. So strongly in fact that it is often seen as a great training ground for other industries like sales, marketing, advertising, PR etc. Hotel people are much sought after because their language skills are developed, they have excellent presentation and they understand customer service in a very deep way. They can transition easily to selling advertising space or managing PR events for corporate clients. Unfortunately, the hospitality industry is now growing at a rate where training cannot keep up with the buildout of new hotels. Occupancy rates in hotels in China are thought to be over 70% and in many cities it is hard to get a hotel room, even when there is no major event going on in that city. Room rates have gone up significantly too. The tourism industry in China is already racking up over US$300 billion a year in turnover. It employs about 17 million people and is growing at about 9% per year. So the logical consequence of this is an ongoing struggle to recruit, retain and motivate staff. A struggle that will only get worse in the short term. The danger is that if this problem is not solved, the industry will not reach its potential. This has huge consequences when travel and tourism combined currently employ about 10% of the entire China workforce. Having the tallest hotel in the world is good, but filling it with qualified staff is much better.
I don’t necessarily disagree with the issues discussed in this article, I just don’t see them posing as big of problems as he makes them out to be.Â China’s churning out the tourism/hospitality students at a rapid rate and the ones I know and work with are fantastic people, with excellent English and service skills.Â If they come straight out of undergrad this smart and well-trained, I’m sure they can learn and develop great management skills as well.Â As such, headhunting those truly capable tourism/travel middle and senior-level managers may just be great business idea.