Chen Xianghong: New Requirements for Investing in High-Quality Cultural and Tourism Projects
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2024-09-25
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As China gradually enters a post-high-speed development stage and embarks on a path of high-quality development, the tourism industry is playing an increasingly important role in meeting the needs of a happy life for the people and balancing the economic and social benefits of development. At the same time, as an industry with strong industrial attributes and a high degree of marketization, the high-quality development of the tourism industry involves changes in demand, product innovation, supply and demand matching, efficient development, reasonable operation, and balancing economic and social benefits, which also puts forward new requirements for tourism investment.
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With fundamental changes in market consumption demand and the tourism investment environment, future tourism investment will not be a simple adjustment of prices and categories, nor will it be the blind pursuit of special forces tourism projects or popular internet celebrity products. Instead, it requires bottom-level innovation in terms of product models and business models.
From the demand side, market demand is becoming more refined, and consumption is returning to rationality.
Tourism consumption demand is gradually shifting from shallow, functional sightseeing and vacation consumption to deep, experiential quality sightseeing and themed leisure vacation consumption, requiring tourism scenic spots and destinations to simultaneously improve the tourism experience and increase cultural content.
At the same time, the consumption tendency is "traveling on demand, rational experience." According to statistics from the Ministry of Culture and Tourism, the number of tourist trips during the "May Day" holiday in 2024 exceeded that of the same period in 2019 by 28%, but the market consumption level did not increase proportionally. Observations of consumption data from scenic spots under top-level jurisdiction and market peers show that "many people but not much money" has become the norm in the market. Tourists are starting to seriously consider travel costs, whether it is per capita consumption, travel distance, or stay time, all showing obvious signs of weakness. At present, while the tourism industry is truly facing a "demand revolution," it also provides new opportunities for high-quality development for market entities.
From the supply side, most of China's tourism products and destination business models are still in the stage of shallow sightseeing products and ticket economy. Products urgently need to transform from extensive to refined, deepening tourism consumption by creating content and innovating experiences, and promoting high-quality development of the industry.
This requires market entities to conduct targeted investment, rather than large-scale investment, that is, investing in new themes and innovative niche products.
First, the new trend in tourism product investment is the integration of culture and tourism, and cross-border integration. The ways to invest in new tourism products and create new business models are nothing more than the deep integration of culture and tourism, that is, future innovations will revolve around "culture + tourism," "industry + tourism," and "community + tourism." At the same time, the community-ization of scenic spots, or the life-scenarization of scenic spots, allowing tourists to truly experience and feel the local life themes and content, will be a direction for future product innovation.
Second, the more sluggish the market, the more necessary it is to seize the strategic opportunity adjustment period, innovate products, and change the future market landscape. Throughout the history of economic cycle adjustment phases, well-prepared innovative enterprises have carried out product innovation and new project investment during this stage, such as Disney's innovation of color animation films during the Great Depression and the all-inclusive tourism model of the Club Med in the post-World War II European recovery period.
Third, tourism project investment starts with important core attractions and proceeds with incremental investment, rather than one-time development without new investment. In short, this will be a continuous investment, starting from core attractions and important landscapes and buildings, but not limited to this, but through operational iteration to discover demand pain points, continuously investing in new products and new experience content, rather than stopping at one-time hardware investment.
Finally, high-quality tourism investment urgently needs to revitalize old assets by investing in new content. Because of the previous collapse of tourism projects and the existence of a large number of poorly operating tourism assets, it is necessary to invest funds in product innovation and content innovation in terms of deep consumption, experience consumption, and cultural consumption, to revitalize existing assets, that is, to activate the operational efficiency of existing assets through product innovation and change the previous problems of low investment efficiency and low operational quality, because the essence of high-quality development is product innovation.
Tourism Investment Faces a Series of Challenges
First, the efficiency of tourism investment is not high, including the serious shortage of operating assets obtained from investment and the high investment and operating costs.
First, the classification standards for tourism land are not uniform, and land prices and types are unreasonable. Tourism land is commercial land in some areas and cultural land in other areas. Due to inconsistent type standards, land auction prices vary greatly, either extremely high or extremely difficult to obtain, making it difficult to balance large-scale upfront investment through tourism operations, raising the threshold for tourism investment.
Second, the proportion of effective investment in tourism is small, and the proportion of operating assets formed is insufficient. Tourism enterprises need to take into account the investment in non-operating assets with public service attributes, such as sewage treatment, water purification, and small transportation roads. The investment in the above-mentioned assets with certain public service and non-operating properties not only reduces the efficiency of tourism investment but also indirectly or directly affects the investment, development, and subsequent operation quality of tourism projects due to insufficient effective investment.
Finally, land tax and property tax for tourism projects are relatively high. Investment in tourism projects that combine economic benefits and social benefits also needs to bear the same property tax and land tax as real estate investment, which is unfair; at the same time, it increases the operating costs of tourism projects with long-cycle returns and lengthens their return cycle.
Second, the tourism investment environment has deteriorated, investment channels have narrowed, and investment models have been forced to change.
First, financing channels have narrowed, and private capital and social capital have significantly reduced investment in long-cycle tourism projects. Second, the model of using real estate funds to develop tourism cannot be replicated, that is, using tourism projects to drive land price growth and using the returned funds to support tourism development. This tourism real estate model is no longer possible. Finally, the poor performance and low operating quality of previous city investment and tourism real estate investments have affected the normal judgment of later tourism project investments.
Third, frequent collapses of tourism project investments, and existing projects urgently need to be revitalized.
Due to various reasons, such as lagging land supply and planning, insufficient project demonstration, reduced financing channels, and shrinking investment capital, causing a break in the capital chain, leading to many new projects struggling, and the social media also showed the phenomenon of "defamation" and "demonization" of tourism projects, which in turn affected investment and product innovation in the tourism industry. However, the underlying reason for the failure of tourism project investment is the mismatch of supply and demand, the lack of entrepreneurs' innovation, and the absence of market operators, rather than the unsuitability of tourism projects themselves for investment. Therefore, these tourism projects that have exploded or have poor operational efficiency urgently need to be revitalized through targeted investment and entrepreneurs' innovative products.
Fourthly, Entrepreneurs' tourism investment and product innovation are often neglected.
In terms of market environment, social cognition, and industry policies, the importance of innovation by tourism entrepreneurs needs to be further enhanced. In the series of changes in market demand evolution, diversification of consumption, and deepening of experience content, the most important element in responding to changes and optimizing supply still lies in entrepreneur-led tourism investment and product innovation.
New requirements for investment in high-quality tourism projects
First, it is necessary to protect the enthusiasm for tourism investment and not to be afraid of tourism investment.
It is necessary to establish more positive typical cases, correct the understanding that tourism is a short, flat, and fast investment, and establish a correct understanding of tourism investment and positive values.
Second, improve the effective investment ratio of the main products and operating assets of tourism investment.
Public funds should be guided to invest in non-operating assets. For example, in the capital investment of urban renewal, apply for special funds to invest in urban parking lots, connecting roads, water plants, and sewage treatment plants, which can benefit surrounding communities while serving tourist groups.
Third, invest in high-quality products with deep integration of tourism and culture.
The deep integration of tourism and culture is the fundamental way out for the high-quality development of tourism at present. It mainly lies in innovation and de-homogenization. It is necessary to endow invested scenic spots with platform thinking and ecological thinking, and to integrate local culture and high-quality related industries and artistic content through platforms and ecosystems. For example, the Tongxiang scenic area managed by Top Degree has launched cooperation with the National Theatre, expanding and extending the "Tongxiang Drama Festival" and preparing for the resident performance of "Green Snake" in the water theater; the Ming Shui Ancient City scenic area in Zhangqiu, Shandong, managed by Top Degree, has partnered with poetry art to hold the "Qingzhao Poetry Festival", and the Puyuan Ancient Town in Jiaxing has organized the "Puyuan Fashion Week" with fashion and art.
Fourth, support tourism investment at the policy level of land system and tax support.
First, it is necessary to include tourism and leisure land in national land spatial planning to provide land security for the construction of a number of world-class tourist attractions and resorts, as well as national-level tourism and leisure cities and leisure districts with cultural heritage. Second, the so-called "illegal constructions" in tourism projects approved by governments over the past ten years should not be dealt with in a blanket way or "demolished", but should be sorted out and classified, demolishing what should be demolished and preserving what should be preserved, reducing the waste of social resources and repeated construction, and paying attention to and solving the land supply for small projects. Finally, reduce the property and land use tax burden of tourism projects with both social and economic benefits.
Fifth, in terms of financial support policies, there should be more supportive policies to guide social capital investment in tourism projects in the next stage.
First, it is suggested that tourism projects be distinguished from general commercial projects, adapted to long-term investment funds, and avoid "short-term debt and long-term investment", truly cultivating the long-term high-quality development of tourism projects. Second, it is suggested to establish a special investment fund for non-performing assets, striving to achieve great things with small money and leverage large "non-performing assets" with small capital. Finally, tourism products in underdeveloped areas in central and western China will be the hot spots for domestic long-distance vacations in the future, but the project construction cycle is longer and the return is slower. It is suggested to establish provincial government industrial funds and low-interest special loans in underdeveloped provinces to support long-term tourism projects with long-term investment funds.
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