Business
Chinese property developers see opportunities in cultural tourism
By Li Xiaoyang  ·  2021-07-17  ·   Source: NO.29 JULY 22, 2021
The seashore Lonely Library in Aranya Resort, Qinhuangdao in Hebei Province, on October 4, 2020 (VCG)

For a long time, Xiao Mo, a Beijing-based travel blogger, had been thinking of visiting the Lonely Library, a neobrutalist structure on the beach at Aranya Resort in Qinhuangdao, Hebei Province. Last winter, Xiao traveled to the building for the first time to witness first-hand the impressive sunrise views from the site she had seen in videos online. "Many other tourists were there despite the cold weather," she told Beijing Review.

It is hard to imagine that such a popular destination was once an underperforming asset owned by real estate developer Yeland Group. The project originally was a cluster of residential developments. However, despite the company's promotional efforts, sales of apartments and houses were sluggish after they were completed in 2012.

Facing the prospect of major losses, Yeland made the decision to redevelop the area as a vacation destination by adding a wide range of tourist and recreational facilities. The redevelopment proved even more crucial to turning the company's fortunes.

One of these efforts was to build a library on the beach where the resort meets the sea. A video released on its completion in 2015 promoted it as "the loneliest library in China" and received 600 million views. Quietly sitting on the seaside, it is a fairly isolated building looking like a weathered boulder facing the sea. With subsequent videos of the area's picturesque scenery also going viral on social media, Aranya began to grow in reputation and has now become a tourist attraction, especially for people in Beijing who need travel only 300 km to enjoy the serenity.

Data provided by the resort showed that nearly 400,000 tourists have visited the area each year since 2015, bringing around 500 million yuan ($77.3 million) annually to local businesses such as homestays and grocery retailers. The average housing price in communities surrounding the resort has risen from 6,000 yuan ($927) in 2012 to more than 25,000 yuan ($3,865) per square meter.

A strong artistic atmosphere is becoming the hallmark of Aranya. Ma Yin, founder of the resort, said it has hosted various art activities and developed themed groups catering to different interests, which has made it a community rich with culture.

One such activity, the First Aranya Theater Festival, took place on June 10-20, attracting many visitors, including Xiao, a major in theater arts at university. "In contrast to dramas performed in theaters, the seaside performances at the festival provided a more immersive experience for festival-goers," she said.

Like Yeland, increasing numbers of Chinese property developers have turned to cultural tourism programs in recent years.

Built by real estate developer Vanke, Liangzhu Culture Village in Hangzhou, Zhejiang Province, has also become popular among domestic tourists, especially after the nearby ruins of Liangzhu Ancient City dating back more than 5,000 years were declared a world heritage site in 2019.

According to Cai Yun, Secretary General of the Commercial Cultural Tourism Committee of China Real Estate Association (CREA), favorable policies introduced in recent years have led to many property enterprises entering the cultural tourism market. "More than half of China's top 100 property companies are vying for a piece of the pie," she said.

A booming sector

According to market research consultancy Qianzhan Industry Research Institute, the redevelopment of residential communities as cultural tourism destinations first emerged in Hainan Province in the 1990s. In recent years, the sector has seen accelerating development, with companies with strong management capacities having obtained greater market share since 2014. Currently, cultural tourism programs mainly include theme parks, cultural tourism towns, tourism resorts and cultural tourism zones.

Many property developers have built both residential buildings and hotels at cultural tourism sites. According to a report from property research organization China Index Academy (CIA), while the development of cultural tourism can improve the value of land, the sales of housing can in turn drive the tourism industry, which has become a well-recognized business model.

Although the tourism industry as a whole has been dampened by COVID-19, cultural tourism is less affected. According to the CREA, the number of new programs in the sector across China reached 220 in 2020, up nearly 2.3 percent year on year.

The China Tourism Academy (CTA) projected that there to be more than 4 billion domestic passenger trips in 2021, with revenue from tourism expected to total around 3 trillion yuan ($463 billion). According to the CTA, this constitutes a more than 40-percent year-on-year growth in both measures. Still upbeat about the cultural tourism sector, many real estate enterprises have increased investment this year.

Sunac China Holdings Ltd. has been notably active in cultural tourism businesses. As of December 2020, it had built 13 cultural tourism zones, five tourism resorts, and nearly 30 cultural tourism towns across China. The company unveiled three more programs and signed new investment contracts at the end of June.

Cultural facilities and activities such as those created by Yeland and Vanke have made their mark on social media platforms like Xiaohongshu, a Instagram-like Chinese fashion and lifestyle-sharing app, and become dream destinations for arts lovers. In order to come up with increasingly effective methods of attracting tourists and residents, some companies have also developed theme parks and resorts based on television hits and classic cartoons.

In Cai's view, cultural tourism based on property developments has great room for growth. "China is pushing ahead with urbanization while improving rural development. The growing residential and travel demands will drive the improvement of the industry," she said.

People enjoy the autumn scenery in Gubei Water Town in Beijing, capital of China, on October 29, 2020 (XINHUA)

Bubbles burst

While many property developers have seen initial rewards from their cultural tourism programs, some have not achieved satisfying results.

According to Cai, many tourism programs undertaken by property developers are short of cultural content. "The developers have not fully tapped into local history and culture of the areas where their projects are located, meaning they often fail to offer tourists a unique cultural experience," Cai said.

Some enterprises have retained the conventional business model of focusing on selling houses while managing cultural tourism programs as a promotional means. That makes it hard for them to make great profits from the tourism businesses, she added.

For many domestic tourism destinations, there is a long way to go to include more cultural activities in tourism. As Iris Zhang, a 20-something graduate from University College London, suggested, improving services is as important as enhancing facilities and activities.

"During festivals and other large events in Britain, organizers often provide shuttle services between sites of activities. Rather than leading visitors to each stop, guides offer information such as historical backgrounds and folk stories, which enhances the experience of visitors," Zhang said to Beijing Review.

According to Li Yujia, chief researcher at a housing policy research institution in Guangdong Province, cultural tourism programs need to make full use of the local advantages and characteristics of their localities. "Property developers should develop a complete system of residential buildings, recreational facilities, as well as healthcare and other services in order to make them more attractive," Li told Beijing Review.

For regions that are not yet fully developed, local governments should not rush to develop cultural tourism but should first improve infrastructure, he said. 

(Print Edition Title: Poetry and Profits)

Copyedited by G.P. Wilson

Comments to lixiaoyang@bjreview.com

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