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Author | Lu Xiaoliang

Editor-in-chief | Yang Ming

Editor | Jing Xiangyuan

The 2024 China Tourism Group Development Forum, jointly hosted by the China Tourism Academy and the China Tourism Association, was recently held. At the forum, Lu Xiaoliang, general manager of Zhejiang Provincial Tourism Investment Group, delivered a keynote speech entitled "Practice and Exploration of Whole-Region Tourism Destination Development." The full text is shared below:

Practice of the Hangzhou Section of the Grand Canal

In February 2019, the General Office of the CPC Central Committee and the General Office of the State Council issued the "Planning Outline for the Protection, Inheritance, and Utilization of the Grand Canal Culture." Starting in 2019, the Hangzhou section of the Grand Canal has been developed as a whole-region tourism destination based on the concept of "cultural tourism integration and water-shore interaction."

(1) Positioning

Focusing on young people and the new Hangzhou population, and focusing on cultural creativity, to provide a new image, new content, and new model for Hangzhou's urban development.

(2) Concept

First, attract people, then attract industries.

Second, create cultural landmarks that reflect international standards.

Third, prioritize operations.

Fourth, use art and culture as an entry point.

Fifth, use urban renewal to transform the "industrial rust belt" into a "lively show belt." Conduct scientific assessment and protection of industrial relics after the relocation of old factories, preserving urban memories, reasonably transforming waterfront spaces, and creating public leisure activity venues.

(3) Implementation Path

First, in terms of value goals, shifting from emphasizing "spatial increment" to "humanistic content"; second, in terms of driving force, shifting from relying on "policy-driven" to "art and culture-driven"; third, in terms of gathering elements, shifting from relying on "capital elements" to "industry cultivation"; fourth, in terms of management model, shifting from conventional "urban management" to "brand empowerment and value-added operations."

(4) Achievements

Ten landmark projects (including the renovation and upgrading of the Qiaoxi, Dadou Road, and Xiahe Zhijie historical and cultural street and park areas, Xiahe Park, the water area, Hangang Park, the Grand Canal waterfront public space, the central landscape avenue in Dachengbei, the Grand Canal Museum, the Grand Canal Future Art and Technology Center, Yunhewan TOD, and Hangang TOD) and five cultural brand events (including the Beijing-Hangzhou Dialogue on the Grand Canal Cultural Belt, the China (Hangzhou) New Year's Blessing and Good Fortune Gathering, the Grand Canal International Poetry Conference, the Grand Canal International Piano Festival and Lang Lang Cup Piano Competition, and the Grand Canal Temple Fair) have been developed in the Hangzhou section of the Grand Canal. Currently, six major projects—the renovation and upgrading of historical and cultural street and park areas, Xiahe Park, the water area, Hangang Park, the waterfront public space, and the central landscape avenue—have been completed and unveiled, with initial results showing. The Grand Canal Museum is expected to be completed and operational in 2025, and the Future Art and Technology Center is expected to start construction at the end of 2024. According to the Zhejiang Provincial Department of Culture and Tourism, during the 2024 National Day holiday, the number of tourists visiting the scenic area jumped to second place in the province, second only to the West Lake Scenic Area.

On May 28, 2021, 24 national ministries and commissions, including the Central Propaganda Department and the National Development and Reform Commission, held a meeting on the construction of the Grand Canal National Cultural Park and the third inter-provincial and ministerial liaison meeting on cultural protection, inheritance, and utilization in Hangzhou. The leaders attending the meeting gave high praise to the planning and construction of the Hangzhou section of the Grand Canal National Cultural Park.

On May 21, 2024, the People's Daily published a front-page article on the Hangzhou section of the Grand Canal entitled "Zhejiang Makes Efforts in Protection, Inheritance, and Utilization—Allowing the Ancient Grand Canal to Exude a New Look of the Times." On October 4, 2024, Zhejiang Daily published a front-page article on the Hangzhou section of the Grand Canal and its ten landmark projects entitled "The People's Canal, the Tourists' Canal, Always New."

In January 2023, Qiaoxi and other historical and cultural street and park areas were rated as national-level tourism and leisure street areas by the Ministry of Culture and Tourism. In June 2024, Hangang Park stood out from 250 projects in more than 40 countries to win the highest award for large-scale landscape design at the 2024 WLA World Landscape Architecture Awards (WLA Awards). In November 2024, Xiahe Park won the Best Public Space Award at the 2024 THE PLAN AWARD.

As the investment entity, Hangzhou Canal Group is both the land developer and the cultural tourism developer and operator. From the start of the Hangzhou Canal comprehensive protection project in 2003 to 2025, an estimated 100 billion yuan will be invested in the Hangzhou section of the Grand Canal. Of this, 40 billion yuan was invested from 2003 to the end of 2018; an estimated 60 billion yuan will be invested from 2019 to 2025. Upon completion of all projects at the end of land development, it is expected that the project will achieve basic financial balance: an estimated 95 billion yuan in land development revenue, 5 billion yuan in debt, and 1.5 million square meters of core property resources.

Amidst the continued downturn in the national land market, from 2023 to November 2024, a total of 11 plots of land were auctioned within the land development area, with a total transaction price of 10.6 billion yuan. The premium for a plot of land auctioned on August 29, 2024, reached 36.5%. The most recent transaction price for Hangzhou Green City Jiangnanli (Chinese villas) reached 244,000 yuan/square meter (transaction in October 2024); the total investment in Yunhewan TOD is 10 billion yuan (residential accounts for only 50%), construction started in February 2023, and all residential units were sold out in October 2023, with an average price of 40,000 yuan/square meter, and revenue of 8 billion yuan.

Reflections on Creating Whole-Region Tourism Destinations in the New Era

(1) Tourism destinations have strong functionality and have significant comprehensive benefits for the environment, society, and governance (ESG)

1. Economic benefits: mainly reflected in financial profits, asset appreciation, and brand value enhancement.

2. Employment.

3. Taxation.

4. Environmentally friendly and green ecology.

5. Cultural manifestation and prosperity.

6. Promoting common prosperity.

7. Enhancing regional brand influence.

(2) Innovative mechanisms for tourism destination development

Tourism destinations boast powerful functionality and significant comprehensive benefits, with enormous demand from local governments. However, many challenges remain: Firstly, there are few successful cases; secondly, the operational teams' knowledge reserves, experience, and aesthetics need improvement; thirdly, there is a lack of patience and resilience; fourthly, the concentration of tourism resources is low; and fifthly, state-owned asset supervision departments' assessments of state-owned enterprises focus on financial profits, neglecting the value of assets and brand profits, thus reducing the motivation of state-owned enterprises to invest in tourism destinations.

1. Collaborative creation of tourism destinations through a "province-city-county three-level linkage model"

Tourism destination investment is primarily led by local governments, with Zhejiang Tourism Investment Group participating in investment and managing project pre-stages, positioning, creativity, planning, and post-operation. It leverages long-term, patient social capital such as insurance funds to achieve project target returns and ensure a complete "financing, investment, financing, operation, and exit" cycle.

2. Accelerating the formation of new productivity in whole-region quality tourism using a "star system" model to address the fragmentation of tourism resources

(1) "Stars" are the core attractions of whole-region tourism destinations, typically iconic resources with significant cultural, historical, or natural value and top-tier traffic appeal, such as West Lake and the Grand Canal in Hangzhou, and Shanghai Disneyland.

(2) "Planets" are important nodes in whole-region tourism destinations. They possess a certain degree of attraction, influencing the overall tourist experience and facilitating tourist flow and extended stay times.

(3) "Satellites" revolve around the tourism destination and primarily include main IPs, main business formats, content, and activities.

Only "stars" can solve the problem of fragmented tourism resources. Currently, the fragmentation of tourism resources is becoming increasingly prominent, hindering the in-depth development and quality improvement of many tourism destinations. To effectively address this issue, we must leverage "stars" (i.e., products with strong core appeal, such as world-class theme parks) to aggregate scattered tourism destinations and create synergy.

3. Reform the investment and financing mechanism and establish the Zhejiang Provincial Cultural and Tourism Integration Industry Development Fund

Led by Zhejiang Tourism Investment Group, using a "provincially-owned state-owned enterprise + local government + social capital" model, and leveraging long-term, patient social capital such as insurance funds, the Zhejiang Provincial Cultural and Tourism Integration Industry Development Fund will be established.

(3) Exploring new paradigms for tourism destination development and operation through "value co-creation"

Current consumption trends exhibit the following characteristics: Firstly, the main consumer group is changing, with "value for money" and "emotional consumption" becoming new consumption trends; secondly, tourism preferences are shifting, with a stronger emphasis on cultural leadership; and thirdly, travel is no longer just sightseeing; immersion and integration into local life are becoming new pursuits.

1. Tourism Destination Development Trends

China's cultural and tourism industry has undergone decades of development. With the iteration of tourist demands and the continuous growth of consumer aesthetics, the business models of tourism destinations have constantly evolved. After experiencing resource-driven models, combinations of resources and point-like experiences, and experiences focused on local life, the 4.0 product, centered on co-creation, represents a significant market trend and direction. This shift is closely related to the growing confidence of contemporary citizens and future young people, and their emphasis on self-expression.

2. Underlying Value of Tourism Destinations

Underlying Value: Respecting the original, marginal regeneration, moderate intervention, interactive creation.

Past tourism destinations often had a strong artificial feel, with excessive development and rudimentary design leading to a lack of authenticity in nature and culture. Behind trends such as "anti-commercial atmosphere" and "reverse tourism" lies people's yearning for original ecological experiences and their pursuit of pristine environments.

3. Tourism Destination Business Model

The tourism destination business model, centered on "core attractions (IP) + overnight accommodation + RED (Retail, Entertainment, Dining)," not only promotes diversified tourism experiences but also enhances the overall appeal of tourism destinations, forming a mutually dependent and synergistic ecosystem.

4. Tourism Destination Traffic Conversion

Relying on core attractions, overnight accommodation, and RED businesses, traffic undergoes four levels of conversion (traffic reach, traffic introduction, stay conversion, and overnight conversion) to achieve tourist consumption within the destination.

5. Co-creating Tourism Destinations

Four types of "co-creators"—investors, original residents, tourists, and new residents—collaborate and complement each other to co-create ideal communities, maximizing the economic, social, and cultural benefits of tourism destinations, forming a virtuous cycle and sustainable development, and creating a vibrant and symbiotic field within the destination.

6. Tourism Destination Development Concepts and Methodology

(1) It is necessary to adhere to the "full life cycle" development concept: achieving a complete cycle of project positioning, planning, design, construction, and operation management to promote high-standard construction and sustainable operation. Early-stage work plays a crucial role in the entire project life cycle: creativity and imagination; market positioning; business formats and content IP; cultural and spiritual consumption; promotion and lead generation; investment attraction planning; operation planning; and finally, the formation of implementable spatial and construction plans.

(2) It is necessary to build a digital intelligence operation system.

7. Vision and Goals for Tourism Destination Development

(1) To become a national demonstration and leader in new productivity in the cultural and tourism industry, with innovation and replicability.

(2) To promote the in-depth integration and development of culture and tourism. Through a path that perfectly combines protection and revitalization, tell China's story and achieve "two expressions"—the contemporary expression of traditional culture and the global expression of Chinese culture.

(3) To achieve sustainable development. The creation of tourism destinations must adhere to originality, uniqueness, and singularity.

Special Research on Investment in the Cultural and Tourism Industry

To gain a deeper understanding of the investment and development of the cultural and tourism industry, the China Tourism Academy, in conjunction with the China Amusement Machine and Amusement Park Association and other organizations, is conducting a special research activity on investment in the cultural and tourism industry, and sincerely invites all member units and cultural and tourism enterprises to participate in the research.

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