Alarm over economic deceleration in China has gathered steam in the tourism sector during a year end meeting of Xi’an hotel and tour operators. Discussion focused on currency devaluation as businesses considered effective and rapid measures to counter the economic gloom. Tourism in Xian accounts for the livelihoods of hundreds of thousands of people, many of whom are wondering if they will still be in business this time next year. “We certainly hope the Government will consider realigning our currency more accurately to account for the severe reductions in foreign countries” said Mrs Liu, China Operations Manager for Xi’an Travel Service. “Like exporters, we are taking a pounding with current rates” .

Home of the Terracotta Warriors and one of the country’s hottest tourist destinations, Xi’an has noticed a sharp drop in foreign visitors in a year that was supposed to capitalize on the Olympics to boost revenues.  Tourism is a major industry in the North Western City contributing around 40% of the local GDP, and a major driver in the government’s development strategy for Western China. 

Mrs Liu said the Olympic boon never materialized as a result of stringent visa restrictions, and the Earthquake in Sichuan, though she was hopeful that next year would see numbers increase again. “We are optimistic but certainly government intervention at this stage would be appreciated”.

Statistics from China Daily 2007 showed that the average stay of foreign visitors in Xi'an is 2.9 days and they spend about $180. “Traditionally we have managed to differentiate our products sufficiently to achieve our share of the market. Now we are forced to compete solely on price. We have responded to this challenge by drastically reducing the cost of our packages. Fantastic bargains are now available. We hope to attract more visitors but it is tough.”

Hq Guesthouse Xi’an, hqhostelxian.moonfruit.com which offers centrally located apartments for families added to the sentiment. “We are managing to stay afloat, but even considering it is the low season things are eerily quiet. We do not normally adjust our prices seasonally but this year we are offering nearly 50% price down. We have seen several operators disappear over the last 6 months as competition eats away at the cake” said manager Mei. “In addition we have shaved around 30% off our Warriors Tours” she added.

The government has rolled out a swathe of investments in Xi’an in tourism infrastructure in recent years. Airport expansion is well under way with a joint venture with German firm Fraport which will add to Xi’an’s status as a western hub. Direct flights are now available from Thailand and Japan, with many more countries to be added in the future. A  huge 1,300-year-old market at the start point of the Silkroad is also being rebuilt. It is hoped the market and its facilities will encourage visitors to stay longer, the director of the Xi'an Tourism Administration bureau, Zhou Aiquan, said. As a whole tourism accounts for around 7% of China’s GDP.