GUANGZHOU got its first wholly-owned foreign travel firm Wednesday (Mar 29), but the firm is only allowed to offer tours within China in a bid to protect domestic agencies.

The Guangzhou office of the world's leading travel agency Kuoni Travel is under the supervision of its Hong Kong branch.

Kuoni Travel, based in Switzerland, set up two offices in Shanghai and Beijing last year.

"The office in Guangzhou allows us to make even more effective use of our experience in the Chinese market, and to make strategic plans for this extremely promising market," Reto Wilhelm, executive vice-president of Kuoni Travel Holding Ltd, was quoted by the China Daily as saying yesterday.

Like all Kuoni Travel (China) Ltd's offices, including the base in Hong Kong, the Guangzhou branch will operate under the brand of Sky Travel.

Since foreign travel agencies are not allowed to offer outbound travel services as of now, Kuoni Travel's Guangzhou office will focus on the domestic market.

Guangzhou's local tour agencies take up a big share in the market of leisure tourism. Wilhelm said Kuoni did not want to compete with the local players in the leisure tourism market so far, but it will focus on business trips and the high-end market, targeting foreign visitors who come to the city for business or conferences and fairs.

Wilhelm said his company was looking forward to permisson from the China National Tourism Administration (CNTA) for foreign firms to enter the outbound sector.

Danny Kondic, managing director of Kuoni Travel (China) Ltd, said the market-entry threshold for foreign travel agencies on the mainland was very high at present.

"Firstly, the company's general turnover must exceed US$500 million, and then we have to invest at least US$500,000 in the Chinese market," Kondic said.

Guangzhou is doing quite well in manufacturing as well as in the exhibition and fair industry. The city's annual gross domestic product (GDP) accounts for 11 percent of the whole country.

This is why Kuoni Travel chose Guangzhou to establish its third office, he said.

All staff in Shanghai, Beijing and Guangzhou are natives.

There are five employees in Guangzhou office, and the company doesn't plan any expansion in the near future.

Alfred Kuoni founded his first travel agency 100 years ago in Zurich, Switzerland.

Kuoni has branches in 27 countries across Europe, Asia, Africa, and North America.

About 75 percent of Kuoni Travel's turnover is generated outside Switzerland.

Editor: Wing