Graduate School of Social Sciences
Master Thesis
“Follow the flag!”– Chinese tour operators in the Netherlands:
ethnic businesses in Chinese tourism and their business practices
Name: Pui Yan WU (6396836)
Programme: Research Master of Social Sciences Supervisor: Professor Jan Rath
Second Reader: Professor Veronique Schutjens Date: 15th August 2014
Graduate School of Social Sciences
“Follow the flag!”– Chinese tour operators in the Netherlands:
ethnic businesses in Chinese tourism and their business practices
Abstract: In the field of ethnic entrepreneurship studies, most scholars stress the relationship between immigrants’ cultural backgrounds and their business practices. Furthermore some scholars have highlighted the influence of structural conditions on ethnic businesses as well. Few, however, discuss in detail the strategies ethnic
entrepreneurs use under different conditions. This research uses the case study of Chinese tour operators in the Netherlands. It argues that the business practices of ethnic entrepreneurs are the outcome of interactions between structural conditions, the resources of immigrants and entrepreneurial spirit. The findings show that even though Chinese tour operators are constantly affected by market conditions and different political-regulations, they are always aware of and responsive to these conditions. By utilising their ethnic backgrounds and connections back home, Chinese tour operators implement different business practices (both formal and informal), to help them circumvent structural constraints and survive in the market. Keywords: Chinese tour operators, structural conditions, informal practices
Introduction
Over the last 10 years there has been a steady growth of Chinese tourists travelling abroad, thanks to their increasing wealth and the ease of travel restrictions between China and destination
countries (Zhang et al, 2000). According to the World Tourism Organisation’s annual report, the volume of outbound Chinese tourism1 grew from 10 million to 83 million between the year 2000 and 2012 with Europe being one of the most popular destinations. Nowadays this group has even become the world’s top spenders, with more than 102 billion USD spent in the year 2012
(UNWTO, 2013). Without doubt, growing Chinese tourism is exerting a substantial economic
Acknowledgement: The author expresses her deepest thanks to Drs Roelof de Haan for his support both financially and mentally, without which this research would not have been completed successfully. She gratefully acknowledges Professor Jan Rath who provided her with invaluable advice, encouragement and guidance. The author also thanks Professor Veronique Schutjens for her help and contribution.
influence on European countries - their spending on different activities, retail products and services has stimulated the development of the local economy and created more job opportunities (Latham, 2011). Interestingly, the nature of Chinese tourism seems to be different than tourism from other countries. They often travel in groups with a planned itinerary led by tour guides2 and they mostly eat Chinese food during tours. When they travel to Europe they do not visit just one country, but multiple countries within a short period of time (e.g. 6 countries within a 9 day trip). Tours always include shopping activities, especially for buying luxury brands and souvenirs3 (NBTC, 2013). What’s more, many businesses dealing with Chinese tours are apparently owned and staffed by individuals with a Chinese background.
What we see is that tourism and migration have become closely related. With more individuals travelling abroad, the demand for hospitality products and services also increases. Subsequently it opens up more opportunities for tourist-related businesses, e.g. tour operators, catering and lodging businesses. Amid such a global phenomenon, immigrants are seen to be increasingly engaged in the tourism industry, (Cooper, 2002; Hall, 2008; Hall & Rath, 2007; Hall & Williams, 2002; Hoffman et al, 2008; Rath, 2006). Many of them seek to establish businesses in the tourism industry which cater to special markets or lifestyle considerations4. In particular, these
immigrants often make use of their contacts and knowledge about the country of origin to facilitate their business operations. Their ethnic background, by and large, has given them
competitive advantages to stay ahead and seize profits in this tourism sector. All in all, the ethnic relationship between immigrants and tourists generates a specific proportion of tourism-related benefits, and helps foster the development of domestic and transnational business networks (Hoffman et al, 2008:13). In some cases, it creates an ethnic business chain where business units involved are all operated by individuals with the same ethnic background.
By using the case study of Chinese tour operators in the Netherlands, this research aims at exploring the interplays between ethnic entrepreneurship5 and international tourism. The main research question here is: “what is the dynamic of Chinese tour operators in the Netherlands?” There are three reasons for choosing this particular sector. Firstly, Chinese tourism is still a new and understudied phenomenon in Europe (which began only a decade ago). Few comprehensive studies have examined in detail the role of tour operators on Chinese tourism, despite their active involvement in the industry. They are the pivotal point of contact at destinations, handling tours and providing various assistances, i.e. local information and emergency assistance (Cooper, 2002). Secondly, studies that examine tour operators as ethnic businesses are far and few between. For instance, how they may differentiate from the mainstream or non-Chinese tour operators, how they make use of their ethnic backgrounds and connections with their home country to develop business strategies and outplay other competitors in the industry. Thirdly, no research
2 Tour guides refer to individuals who receive tours and tourist at travel destinations (TIC, 2014). Different from tour escorts, they can be both licensed and non-licensed, depending on the country they are based and its legislation. 3 Many Chinese tourists buy souvenirs for their relatives and friends when they travel abroad. Moreover, they buy luxury goods for cheaper prices since they can enjoy tax redemption (Latham, 2011).
4 Not only entrepreneurship, migrants can be hired as labours who serve their co-ethnic tourists (Hall & Williams, 2002).
5 In this article, ethnic entrepreneurs and migrant entrepreneurs are used interchangeably. They both refer to minority ethnic groups in a country. Scholars always find it fuzzy to clearly define and differentiate these two terms (Kloosterman & Rath, 2002; Rath & Kloosterman, 2000; Rath, 2002a, 2002b; Volery, 2007; Waldinger et al, 1990).
has been done on the Chinese tour operators in the Netherlands, despite the fact that it is one of the most visited European countries by Chinese tourists (NBTC, 2013).
This research scrutinises the practices of Chinese tour operators, be they formal or informal. Informal practices generally refer to “activities aimed at producing a positive effect on income (for the person executing the activities and/or for the person receiving the results), for which the terms of legislation and regulations applicable to the activities are not being met” (as cited in Kloosterman et al, 1999:255). The main argument here is that the practices of ethnic
entrepreneurs are the outcome of interactions between structural conditions,the resources of immigrants and entrepreneurial spirit. These ethnic entrepreneurs constantly struggle with
different challenges such as competition and changing tourism policies. They have to make use of the resources they have and find ways to manoeuvre in the business environment. This research provides new insights into ethnic entrepreneurship and international tourism - empirically showing how ethnic businesses play a role in the tourism sector. For example by addressing the questions of: what structural dynamics ethnic entrepreneurs face and their responses. Looking at what the implications are, and in particular, how their use of informal practices has further complicated the business sector.
Theoretical framework
Discussions on ethnic entrepreneurship
The existing literature on ethnic entrepreneurship mainly focus on the factors motivating immigrants to start-up businesses, such as blocked mobility (preventing them from entering the labour market) and the cultural characteristics of immigrants, as well as the types of businesses immigrants get involved in, and their business practices. Several approaches were developed to explain such phenomenon. The first one emphasises on immigrants’ human capital; suggesting that immigrants have difficulties entering their host country’s labour market since they do not have the right human capital, meaning the level of education, work experience and skills (Bates, 1990; 1997). Inorder to make a living, they choose instead to start-up a business and become entrepreneurs. The secondstrand associates ethnic entrepreneurship with cultural capital, stressing that the different cultural backgrounds of immigrants lead to their distinct ways of conducting businesses6 (Light, 1972, 1984). The third strand pays attention to the social capital of immigrants7. The connections of immigrants with their co-ethnics and home country give them competitive advantages to start-up businesses. They can easily make use of these transnational networks to facilitate the flow of goods and information, e.g. importing ethnic products (Portes, 1995, 2000).
6
Studies in this strand often compare differences between ethnic groups. 7
According to Bourdieu and Wacquant (1992:119), social capital is defined as ‘the sum of the resources, actual or virtual, that accrue to an individual or a group by virtue of possessing a durable network of more or less
institutionalised relationships of mutual acquaintance and recognition”. Volery (2007) points out that social capital helps facilitate the business operations of immigrants, information collection and access to special resources or markets. In some cases, this form of capital is particularly strong among co-ethnics, hence they are also seen as “ethnic capital”. Moreover, immigrants’ connections with their home country can form international business networks7 which help promote transnational economic activities, i.e. alleviating problems of contract enforcement and receiving information about business opportunities (Rauch, 2001:1180). However, according to Faist (2008), since these business networks often function on the basis of mutual trusts and verbal agreements7, they can be problematic and harmful, e.g. with familial and moral obligations.
However these approaches only focus on ethnic entrepreneurs themselves; they fail to relate ethnic businesses to a broader context - to see how they are shaped by external conditions. These external factors in fact exert substantial influence on ethnic businesses as they regulate the daily operations of these businesses (Hoffman et al, 2008; Rath, 2006; Waldinger et al, 1990).
Moreover, they over-emphasise “ethnic solidarity” in which immigrants are perceived as collaborating solely with their co-ethnics and always help each other out. Fierce competition between co-ethnic entrepreneurs and possible connections with other co-ethnic groups are, however, overlooked.
Until more recently, a number of researchers began to discuss the interrelationship between structural factors and ethnic entrepreneurship (Aytar & Rath, 2012; Kloosterman & Rath, 2003, 2006; Rath, 2006; Waldinger et al, 1990). Waldinger et al (1990) put forward the interactive
model which stresses the opportunity structure of immigrants in a host country. Opportunity
structure generally refers to “market and non-market, e.g. informal and institutionalised prejudice and discrimination, conditions that influence the availability and monetary rewards of wage or salary employment” (Waldinger et al, 1990:21). In short, it includes economic and political-regulatory conditions etc. The model suggests that if immigrants have limited opportunities to enter the labour market in their host country (due to severe discrimination, language proficiency or any other factors), they are more likely to take up entrepreneurship. Especially when there are openings and profit potentials in a business sector. The social, financial or educational resources etc. immigrants having, decide which sector they can enter and the size of business they can set up.
This model however is criticised for failing to capture the dynamic nature and different levels of structural conditions, and for not providing sufficient explanations of the success of ethnic entrepreneurs. Scholars Kloosterman, Van der Leun and Rath (1999) proposed the mixed
embeddedness approach, saying that it is a further development of the interactive model. In their
model, ethnic businesses are not situated in a vacuum where conditions are stagnant. On the contrary, business environments are constantly changing in nature and that subsequently also alters the opportunity structure for migrant entrepreneurs. Moreover external factors can be at national, regional and local levels, or even supranational. On the ethnic entrepreneur’s side, the model considers immigrants to be responsive to the environment they are facing – whether there are obstacles or openings, immigrants always adjust their business strategies in order to survive in the market. They do so by making use of the “resources” they have. This proposition thus gives room for human agency, such that ethnic entrepreneurs are not portrayed as passive but instead consciously react to the ever changing opportunity structure. What’s more, this model suggests that the relationship between co-ethnics can be conflictive, competitive and even exploitative, and the social networks of migrant entrepreneurs are not limited to co-ethnics; they can have multiple networks which include other ethnic groups (Kloosterman & Rath, 2003, 2006; Rath, 2002a, 2006; Rath & Swagerman, 2011).
Therefore, the theoretical framework of this study is constructed based on the mixed
embeddedness approach. It is considered to be the most comprehensive, as it is more elaborate on
structural conditions while taking ethnic entrepreneurs into consideration. It is able to illustrate the dynamics of the complex structure in which ethnic businesses find themselves in. However one critique of this approach is that there is inadequate explanation of “how” different business strategies and practices are employed under “which” particular context. For the most part, the
discussion on the reactions of migrant entrepreneurs seems to be understated. Seeing such a knowledge gap, this article will go one step further, by closely examining their reactions, and how those reactions reflect ethnic entrepreneurs’ rationale.
Structural side - market and political-regulatory conditions
Market and political-regulatory conditions are the two substantial factors which determine how a business sector is structured and organised (Gilpin, 2011). All things being considered, thresholds of entering the sector are the most significant, e.g. requirements for a certain capital or
knowledge. Having the required resources is essential for immigrants to gain access to the sector and start up a business. Immigrants who do not fulfil these requirements are ruled out at the very first place. In addition to that, an emerging or changing demand for a certain product or service, customers’ characteristics and existing businesses in the market etc., also influence ethnic businesses. These factors determine the potential profits entrepreneurs can obtain;whether there is severe competition within the sector, and what the business strategies will be, i.e.
differentiation of their products or cut-throat competition (Rath, 2002a).
For political-regulatory conditions, they can come from multiple levels as well as across countries. States play an important role in monitoring the national economy, e.g. labour market and taxation systems in the immigrants’ host country. That can affect the operational costs of ethnic businesses. Besides states also regulate cross-country economic activities by signing bilateral trade agreements or setting import restrictions. By the same token, the government in the home country of an immigrant can exert substantial influences on ethnic businesses, since these businesses often deal with transnational flow of goods, information, people and services. What’s more, the formation of trade unions (e.g. European Union and free trade zones), has eased the economic activities between the member-states. However, regulations from supranational institutions, such as the European Commission, has further complicated the dynamics of the political-regulations of its member-states - these legislations have become more intertwined with supranational regulations. Not only at the national and supranational level, local governments can also impose regulations on ethnic businesses, due to the gradual decentralisation of a state’s power to municipalities, in particular to city planning and tourism promotions (Hoffman, Fainstein, & Judd, 2008; Kloosterman, & Rath, 2003; Rath, 2002a). It should be noted that governmental regulations are not always negative and discouraging, they can help promote and facilitate ethnic entrepreneurship as well, for instance, by providing incentive programmes and advertising campaigns (Rath, 2002a).
Apart from governmental actors, non-governmental actors also play a role in the operations of ethnic businesses. These actors can come from different backgrounds like unions, quangos, non-profit organizations and voluntary associations, as well as individuals and their social networks (ibid). They serve as informal regulators and use soft laws to monitor ethnic businesses and their activities, e.g. reputation and peer-pressure (Grant and Keohane, 2005). An increasing number of international institutions have become influential regulatory actors as well, the World Trade Organisation and World Tourism Organisation for example. Notwithstanding, non-governmental regulations can lack legitimacy and enforcement power. As a result there is a higher probability of businesses disobeying or even breaching these regulations (Vogel, 2008). Though informal
regulators give rule-breakers no penalty, they can apply punishments such as spreading a bad reputation8 or different forms of violence (Portes, 2000).
In short, the aforementioned conditions determine what type and the number of opportunities that are available in a business sector. They can create openings as well as restrictions for potential migrant entrepreneurs. In that sense, the structural conditions determine who can enter the sector. The entrepreneurial trajectories immigrants follow, are also under the influence of these
conditions. Most importantly, these conditions are constantly changing; any change of these conditions will alter the opportunity structure as well. Immigrant entrepreneurs have to adjust their strategies to keep their businesses running as a result.
Ethnic entrepreneurs and their business strategies
Although there may be openings, only immigrants who both realise these opportunities and have the appropriate resources can enter the sector and start up a business (Kloosterman & Rath, 2003, 2006; Rath & Kloosterman, 2000). Furthermore, ethnic entrepreneurs are always aware of the changing business environment. Any change in structural conditions will change their
perceptions of the business sector, as well as their practices. They are not passive while being subjected to structural conditions; instead, they are responsive and ingenious (Kloosterman et al 1999). By utilising their resources, ethnic entrepreneurs devise different business strategies and constantly make adjustments to circumvent restrictions in order to seize profits (Rath, 2002a, 2002b; Rath & Swagerman, 2011). The resources of ethnic entrepreneurs refer to a set of capitals held by immigrant that can be used for establishing and operating a business (Kloosterman & Rath, 2003, 2006). These capitals can be of a financial, human, (i.e. knowledge and level of education), cultural or social nature.
Regarding the practices and strategies of ethnic entrepreneurs, they are not always formal or legal; they can be informal and sometimes illegal9 (Kloosterman et al, 1999). Some scholars indicate that due to the more stringent constraints they have in their host country, migrant entrepreneurs comparatively employ more informal practices than non-migrant entrepreneurs, such as hiring family members and not registering their businesses to dodge taxation etc. (Rath, 2002a, 2006; Sassen, 1994, 1997). These informal activities are aimed at having a positive contribution to income for which the terms of legislation and regulations applicable to the activities are not being met (Renooy 1990). In particular, this phenomenon is found common in the tourism industry (Rath, 2005; 2006).
However, the definition of “informal” remains unclear as it is always contextual and the boundary between what is formal and informal simply changes all the time (Sassen, 1994). For example certain business practices in one space can be considered as formal but become informal or even illegal in another space, mainly due to different legislative structures of each state (Portes et al., 1989; Portes, 2000; Sassen, 1994:1997). All these make it difficult to give “informal” a fixed definition (Sassen, 1994). Whether they are informal or formal, entirely depends on where their businesses and economic activities are located. This research will discuss both formal and
8
Other businesses are less likely to work with businesses which have a bad reputation.
informal practices ethnic entrepreneurs adopt during their business operations. In particular, it covers the use of informal practices and under what conditions they are employed.
All in all, the use of different business practices and strategies shows how ethnic entrepreneurs respond to the changing structural conditions. Moreover their practices can later affect the structural conditions (e.g. introducing new government policies to regulate informal practices). Therefore, structural conditions and ethnic entrepreneurs interact with each other, and in the process they themselves also change through these interactions. To proceed further, three questions are formulated to uncover the dynamics of Chinese tour operators in the Netherlands:
1) How are Chinese tours organised in the Netherlands?
It is first necessary to understand the Chinese inbound tourism market in the Netherlands, such as its features and organisational methods. This explains what opportunities are on offer to Chinese tour operators.
1) What are the characteristics of the Chinese tour operator sector in the Netherlands? How are these businesses operated?
Next, knowing the business sector’s characteristics (e.g. resources needed, sources of income and competitions), is crucial. That tells what kinds of resources immigrants need to have in order to run a business and why they operate their businesses in a certain way.
2) How do political-regulatory conditions relate to Chinese tour operators (and what are their responses)?
Finally this question helps identify the political-regulatory conditions Chinese tour operators face in the sector and what the implications are, in addition to how the entrepreneurs respond to these conditions (i.e. what adjustments are made to their business strategies).
Research methodology
Several terms in the research questions are operationalised for the purpose of clarity.
Chinese tour operators - According to the Federation of Tour Operator (2006), tour operators are
defined as “organisers and providers of package holidays. They make contracts with hoteliers, airlines and ground transport companies then print brochures advertising the holidays that they have assembled.” Moreover, they often serve as a mediator (or a broker) between tourists and a destination country – they are responsible for receiving and handling all incoming tourists,
helping tourists bridge the cultural and linguistic barriers, as well as ensuring their safety (Cooper, 2002). It should be noted that tour operators are different from travel agencies – travel agencies are companies which give advice, sell and administer the bookings from a number of tour operators to their personal clients. Furthermore, travel agencies are often located in the home countries of tourists whereas tour operators are located in the destination countries of tourists. Therefore, Chinese tour operators are broadly defined as agents handling inbound Chinese tours, which are owned and run by individuals with a Chinese background.
Chinese inbound tourism in the Netherlands - There are various definitions for tourism but it is
generally defined as a “social, cultural and economic phenomenon which entails the movement of people to countries or places outside their usual environment for personal or
business/professional purposes (UNWTO, 2007). In particular ‘inbound tourism’ refers to “activities of a non-resident visitor within the country of reference on an inbound tourism trip” (ibid). In this case, Chinese inbound tourism is defined as citizens from China10 travelling to the Netherlands.
Political-regulatory conditions – Refer to rules and regulations. In fact, both the establishment of
rules and regulations, and their implementation are dynamic social constructions which are subject to political interests, concerns and pressures. These conditions govern the behaviour and actions of business activities. Nevertheless, it is impossible to discuss all conditions, henceforth only those related to Chinese group toursare included here. These political-regulations can come from different levels and can be transnational, i.e. Dutch legislations and tourism laws in China. Furthermore, Approved Destination Status (ADS) is a transnational legislative scheme recognised by both the Chinese government and the European Union. Regulations can also be from non-governmental parties or any unspoken rules within the industry.
Business operations – Refer to the way tour operators receive tours, hire staff and make
arrangements for different services (e.g. tour guides, hotels, restaurants, transportation, airlines, sightseeing tickets etc.)
As there is currently no official data on the number of tour operators that are owned by ethnic Chinese in the Netherlands, it was impossible to conduct quantitative research. Moreover, tour operators are quite mobile and do not necessarily require a permanent office, making them difficult to locate. In order to find Chinese tour operators and uncover their practices, qualitative research was conducted and the main research method was semi-structured interviews. The research population included tour operators and tour guides11. Travel agencies and organisations in China were also interviewed12. Semi-structured interviews were considered to be the most appropriate method as it allowed structured questions to be raised while leaving space for informants to elaborate.
In total twelve interviews were conducted, including three informants (one from a travel agency and two from different travel organisations in China), four tour guides, three managers13 of Chinese tour operators and two informants who were both guides and tour operators (Table 1). Most interviews lasted two to three hours. For privacy reasons, informants’ names are replaced with pseudonyms. Besides interviews, annual tourism reports and statistics, documents and
10
It includes mainland China, Hong Kong and Macau. 11
There were three main reasons interviewing tour guides. First, tour guides are the group which have the closet contacts with Chinese tours. They can provide information about Chinese tours’ features and the ways they are operated. Second, not all tour operators’ owners were available or willing to reveal their business practices. Asking tour guides about their experiences was thus another possible way to find out the business practices of tour operators given that they worked closely with these businesses. Third, some tour guides are the owners of Chinese tour operators as well.
12 They were responsible for itinerary planning and were familiar with the tourism situation in China. They could provide more information about the features of Chinese tours and any relevant tourism regulations.
13
They were referred by Chinese tour operators’ owners as representatives because the owners were not available to have interviews.
websites from various tourist organisations were reviewed. These sources helped provide details about the recent developments in Chinese tourism and the specific regulations at different levels. In addition, observations were done by following Chinese tours in the Netherlands to get a better picture of how these tours were organised and handled14.
Name The Netherlands
Tour guides Mr Yeung
Mr Wing Ms Kwok Ms Shi Manager of a Chinese tour operator Mr Yau Ms Zheng Mr Choi Tour guide and operator’s
owner
Mr Zhou Mr Xi China
Travel agency owner Mr Wan Travel council manager Ms Lau Europe tour planner Mr Ma
Table 1 Overview of informants
Meanwhile limitations have to be addressed, since they could have affected the generalisation, representability and validity of this research. The first one is the use of a gatekeeper. Due to the unfamiliarity with the research population, the gatekeeper (Mr Yeung) was used as a liaison. He provided contacts for 2 tour guides and 2 managers of Chinese tour operators; other contacts were through referrals from informants. Unfortunately the gatekeeper was limited in the type of
informants that he knew. As a result, the data and findings could be biased. Nevertheless, because of researcher’s limited contacts and resources available, using a gatekeeper was considered to be the most effective way to collect data.
The second limitation is the sample selection method. Snowball sampling was used and informants were asked to provide contacts for other informants. Though this sampling method was effective, it was non-random and that could cause a selection bias (Atkinson & Flint, 2001). Furthermore the validity of the data is affected. Snowball samples could even be biased towards the inclusion of individuals with inter-relationships, thus overstating the cohesiveness of social networks while excluding ‘isolates’ who are not connected to any network that the researcher has access to (Griffiths et al, 1993; Van Meter, 1990).
The last limitation relates to the sensitivity of the research topic. Some informants felt uncomfortable when discussing topics like contracts and business connections. Tour guides’
connections with tour operators are important15 and often confidential. Therefore they refused to share certain information or only disclosed it partially. As a result, some valuable information that may have affected the data’s validity could very well have been excluded.
Findings and analysis
Market conditions – the features and organizational structure of Chinese tourism
First and foremost the growing number of Chinese tourists coming to Europe have prompted the development of tour operators in the Netherlands. In fact Chinese tourism is a relatively new phenomenon, which only begun as recently as 2004 after Europe and China signed the ADS travel agreement. With that agreement, Chinese tourists were now able to join package tours16 and freely visit multiple European destinations in one trip (Latham, 2011:7). Amongst allEuropean countries, the Netherlands is one of the most visited by Chinese tourists, as the country is well-known for its diamond industry, windmills and tulips17 (NBTC, 2013). According to NBTC there were 126,000 Chinese tourists visiting the Netherlands in 2010 and that number is expected to increase to 400,000 by 2020.
Currently two types of group tours are commonly found in the Chinese tourism market in the Netherlands - Leisure and Business tours (ibid). These serve different types of Chinese tourists and their structures are different as well (Table 2). Generally the itinerary of all tours are planned and arranged beforehand in China. Once an itinerary is completed, travel agencies will contact a tour operator in the destination country (in this case, one of the countries the tour will visit) and ask the operator to make local arrangements. For example, tour operators will book hotels and coaches for travel agencies prior to a tour’s arrival; they will provide a tour guide and local transportation when tours arrive to Europe. As the number of tours to Europe increases, more tour operators are needed as a result. What’s more, as the two types of group tours require different arrangements (for instance the quality of hotels and mode of transportation), tour operators are pushed to connect with various service providers in order to cater to both sets of requirements.
15 That can determine the number and type of tours they can receive.
16 Package tours refer to pre-arranged, pre-paid travel programs which usually include all components, accommodation, meals and ground transportation and air tickets etc. (GDRC, 2014).
Features Itinerary Price Duration Leisure/
Loose groups
散拼团
-Combine multiple groups of tourists from different cities
-Often more than 25 people
-Most are middle-age or travel with family -Activities: sightseeing (spend little time at each place), self-paid activities18, shopping and
limited free time
-Staying in cheaper hotels, e.g. 3-star hotels -Usually transport with big coaches
-Tight and intensive; visit multiple countries, e.g. 6 countries in 10 days -Highly restrictive and cannot be changed - at very low costs, e.g. 800 – 1200 euros per person19 /sometimes can be zero -8-12 days Business/ MICES20
-Tourists are from same unit of a company or governmental department
-Small size, 3-8 people
-Activities: Mostly attending conferences, visiting factories, having meetings, but also include time for leisure21, few self-paid
activities
-Stay in more expensive hotels, at least 4-star -Transport with small vans or cars
-Tailored made for each group -More flexible 22 -Visit 2-3 countries23 -More expensive -Starts from 4000 euros. -Often less than 10 days
Table 2 The characteristics of group tours
According to Mr Zhou (a tour operator with more than 10 year experience in the business), in the beginning when the Chinese tourism market was still in its infancy, most travel agencies in China were unfamiliar with the Netherlands and other European countries24 (i.e. which attractions and facilities were on offer). They knew little about the tourism market of these countries. Nor did they have experience leading tours through Europe. Language was a major problem as well. Under these circumstances they needed tour operators as a liaison to provide them local
information and help them deal with these challenges. All these have stimulated the demand for Chinese tour operators and created opportunities for businesses to prosper in the Netherlands.
18
The costs of these activities are not included in a tour’s price. Tourists have to pay individually if they want to participate in these activities.
19 Depending on the duration of a tour and types of hotels the tourists stay. 20 MICES refers to “Meetings, incentives, conferences and exhibitions”. 21
They can choose to go sightseeing or shopping at their leisure time.
22 Tourists (or their company) are responsible for the cost of any changes. However, in many cases, tourists try to avoid paying these costs. In order not to annoy their tourists tour operators or guides often had to cover these expenses themselves.
23
Except if the tour has to visit offices in different countries. 24 The same goes for other European countries.
The Chinese tour operator sector in the Netherlands
Sets of capitals required
To be successful in Chinese tourism, it is essential to have a Chinese background and an
extensive business network, both locally and transnationally. These are considered to be the most important resources for running a tour operating business.
Tour operators like us, are from China and speak the same language. We can
communicate easily with the travel agencies in China, as well as Chinese tourists. We “know” how to work with them. Therefore, we have better business contacts with the agencies than Dutch or other non-Chinese tour operators…(Mr Yau)
Not only language problems, but business culture is another reason why travel agencies in China prefer working with Chinese tour operators over Dutch ones. “We (Chinese) do not always do things in black-and-white, but more verbally. However, many Dutch operators will not accept verbal agreements…Travel agencies may find it difficult to work with them,” explained Ms Zheng. As a result, those operators with a Chinese background have a distinct advantage over their non-Chinese counterparts.
Having close contacts with travel agencies in China is also important as it is a way for Chinese tour operators to receive tours. According to Mr Wan, the use of informal agreements is widely accepted between Chinese tour operators and travel agencies in China; formal or legal contracts are seldom used. For example, Chinese tour operators can close deals with travel agencies simply via a phone call or email. Business is done mainly based on mutual trust. Mr Wan explained that informal agreements are in particular appropriate for tour operators. Firstly, for transnational business activities, contracts may be too costly and subject to legal issues. Secondly, Chinese tour operators prefer the flexibility of working with different travel agencies so that they can receive tours from multiple sources. Due to the absence of formal agreements, payments between parties are also done in an informal way - with cash. Travel agencies in China will delegate their tour escorts or a third party who travel to Europe, to hand in the payments directly to the tour operator. In general, the amount is agreed in advance and only paid after the tour is completed. Using cash payments allows operators to have most of their profits off-the-books. They can thus pay lower taxes and retain more profits.
Apart from travel agencies, knowing different service providers is also necessary, as Chinese tour operators provide services instead of tangible products. The main responsibility of tour operators is to make arrangements with service providers (hotels, restaurants, coach rental companies, retail shops, etc.) For each type of tour and it’s specific itinerary, Chinese tour operators have to
contact different service providers. Moreover these business connections are not limited to the Netherlands, but extend across all of Europe. As Chinese tours always travel to multiple European countries, most travel agencies in China prefer to hire one tour operator to make arrangements in all countries visited, instead of paying for different operators in each country. For instance the company of Ms Zheng often books hotels and local transportation for tours travelling to Amsterdam, Brussels and Paris, etc. In that sense, it will be easier for Chinese tour operators to handle different itineraries and sizes of tours if they have more contacts in different European countries.
Regarding service providers, Chinese tour operators do not work only with co-ethnics, but prefer them for practical reasons.
Chinese tourists want Chinese meals during the tour. They need someone speaking Chinese to give them introduction. That’s why we work with Chinese restaurants and tour guides…But look, we use Dutch coach rental companies or those from Eastern Europe. We also make arrangements with international hotels…At the end, prices matter the most…(Mr Choi)
So service providers are selected primarily based on price, and providers are not necessarily co-ethnics. Ms Zheng and Mr Yau also shared similar opinions. What’s more, Chinese tour operators generally obtain new service provider contacts through tourism expositions or via the internet (for example via hotel websites), except for Chinese tour guides, whom operators often find through social connections, such as through family members, friends and peers. In short, Chinese tour operators have a diverse business network across the globe, and their network includes both co-ethnics and non-co-co-ethnics. Moreover, in the case of Chinese tour operators, social capitals sometimes overlap with ethnic capitals (e.g. working with co-ethnics).
Aside from ethnic and social resources, starting a tour operating business requires relatively little financial capital. Mr Xi, who has been operating a one-man company for more than 5 years, shared his experiences when he first started his business,
It was not difficult… I did not need a physical office because I could arrange
everything with service providers and travel agencies in China via phones or email. Plus there was no employee. I could work at home or anywhere else…so I saved up the cost for renting a business premise…I know quite a few people doing the same thing…
Similarly, Mr Zhou runs his business alone; “unless you want to expand your business, then it is necessary to have more financial capitals and an office for your employees.” For these tour operators, the only financial cost was the business registration fee of about 50 euros25. However, the two informants revealed that some one-man Chinese tour operators were unregistered as they try to avoid paying taxes and the control of legislation. Though non-registered companies may enjoy lower operational costs and higher flexibility, these businesses have no legal protections and can be punished for conducting business activities illegally if caught. Both Mr Xi and Mr Zhou chose to register their businesses because they were afraid of being penalised.
Like financial capital, labour costs are also low for Chinese tour operators. According to Mr Zhou, the majority of Chinese tour operators are small in scale, i.e. one-man businesses or companies with a few staff (note that this cannot be confirmed since there is no official data on Chinese tour operators in the Netherlands).
In most cases you need a tour guide and a driver. But if you can do everything yourself, why will you hire more people? Look, I am an experienced tour guide and I have a driver’s license. I transport Chinese tourists with my car and on the way I introduce them to tourist attractions…
25
This is the latest amount based on the information provided by the Dutch government’s website Answer for
One disadvantage of running such a business is that Mr Zhou cannot handle multiple tours at the same time. If there are more tours, he has to hire some Chinese tour guides to help. Therefore, as this type of business does not require necessarily an office or much labour, it favours the growth of one-man or small-scale businesses.
In fact hiring tour guides temporarily is a common practice. All Chinese tour guides in the
Netherlands are freelance and work without contracts. That means they can work for any Chinese tour operator. Often times the two parties make verbal agreements and tour guides are paid in cash per tour.By doing so, operators can minimise their labour costs because they are not obliged to pay tour guides on a regular basis. According to Mr Wing, tourism is seasonal and the volume of tours fluctuates from time to time. During low seasons, there are fewer tours so the demand for tour guides also drops. Contracting tour guides would be impractical and costly. Mr Choi
explained it this way:
Our company does not offer any full-time or fixed contracts to tour guides because we do not need them every day, but only a few months a year. We always do it on-call – we only call them when there are tours. Otherwise, these tour guides will be sitting at our office and doing nothing when there is no tour…
Though these informal practices are cost effective, the absence of black-and-white contracts can easily lead to dishonest behaviours, i.e. breach of agreements and labour exploitation. For example Mr Zhou said some tour operators refused to pay tour guides the agreed salary. They would discount the salaries of tour guides because of different reasons (like tourists complained about their poor services, or they made too little commissions, meaning tourists did not make sufficient purchases). As a consequence, these findings prove that immigrants do not always cooperate with or help their co-ethnics. They can take advantage of other co-ethnics in order to save costs.
Sources of income
According to most informants, the profit margin of Chinese tour operators is fairly low. They receive a service fee from travel agencies for making local arrangements. However, this service fee is generally small26. Therefore, Chinese tour operators often find other ways to maximise their earnings. Ms Shi said many Chinese tour operators increase their profits by quoting travel agencies a higher price for hotels and transportation. That means, after tour operators receive the price from a service provider, they will mark up the amount (usually by a small percentage) and report the “new” price to travel agencies in China. In the same way, this “trick” is used on tourists. Since tourists have a choice of whether to participate in self-paid activities, tour guides usually ask tourists during the tour if they are interested. Quite often, tourists want to participate and are willing to pay. Then tour guides purchase tickets for the tourists and charge tourists a higher price. In the end, tour operators also take a share.
In addition to that, obtaining commissions from the purchases made by tourists is another source of income. Commissions are paid by retail shops in the places where Chinese tourists visit. Usually travel agencies, tour operators and retail shops have agreements on the percentage of the commission. During a tour, Chinese tourists will be taken to designated shopping areas where
retail shops will pay commission for every purchase made. Then the commission will be shared between travel agencies and tour operators. In fact this is particularly common for leisure tours since the cost for leisure tours is low. Encouraging tourists to buy and earning the resulting commissions thus helps cover the cost of leisure tours. Naturally these lucrative commissions have led to the increasing use of heavy-handed sales tactics. Ms Lau said, quite often, tourists are compelled to visit certain places and make purchases, or they are not allowed to go elsewhere. As this unethical behaviour has become common in Chinese tours, it has spurred the Chinese
government to introduce a new set of regulations for tourist businesses. All in all, the limited profit margin of Chinese tour operators has prompted them to deceive and exploit their clients in order to raise their profits.
Competition and recent changes
The Chinese tour operator sector is highly volatile and competitive. Due to unrestricted economic activities within Europe, tour operators face competition from within the Netherlands and from other European countries. Until recently, there has been an increasing number of non-Chinese tour operators (e.g. Dutch or international tour operators like Kouni Travel Nederland and Incentive Europe), going into the Chinese tourism market. They set up Chinese departments and hire staff with a Chinese background. This has further intensified the competition within the sector.
What’s more, some informants reported that the business environment has changed the last two years. The continually improving internet has allowed travel agencies in China to contact service providers in Europe directly. They no longer have to make arrangements through Chinese tour operators. Meanwhile, many large scale travel agencies have gained more experience and
knowledge about the European market, they require less service and support from tour operators. Mr Zhou expressed his worries about these changes:
It is becoming more difficult for tour operators to make profits because nowadays travel agencies in China know all the prices very well, they can find information on the internet and contact businesses in Europe easily. Or if we charge them too high a price, they will not use us. We either have to cut prices (service fees), or provide excellent and comprehensive services to keep the business relationships with travel agencies…
Although Mr Zhou considered lowering his service fees to help improve his business, some operators argued that this would be ineffective. “We are not making much profit as it used to be, price-cuts will only result in breaking even or losses,” said Mr Choi. As a result, lowering prices may not be the best option to improve business.
Other strategies to boost profits include sub-contracting tours to a third party. For example, if an operator has made an agreement with a travel agency in China but does not have the time or the particular resources, the operator will sub-contract that specific part to another operator (can be in the same or different European country). Then the first operator will negotiate a lower price from the second operator while charging the agency in China a higher fee. As a result the first operator can pocket the difference in prices, even without necessarily delivering the service itself. Some informants reported that in some cases, there could be even multiple levels of sub-contracting.
Although this may increase the amount of profit for tour operators, it often is at the expense of exploiting sub-contractors.
Market specialisation is another solution to falling profits. The company of Mr Yau is at the moment more focused on business tours while the company of Ms Zheng now handles leisure tours. According to both informants, it is easier to handle only one type of tour as each requires different arrangements (i.e. the quality of accommodation, mode of transportation and choices of restaurants etc. maybe different). By specializing in this way, they can invest more on particular resources and utilize the resources in a more efficient way. Mr Yau’s company even expanded the business by starting up a branch in Shanghai two years ago. For this reason the company can now easily make contact with travel agencies in China.
We are now much closer to the source (Chinese tourism). Our staff in China often go to different cities and we target some smaller scale travel agencies. Unlike large scale travel agencies, small scale travel agencies have less experience with the European market. Many of them still need the assistance of tour operators. Now our company receives more business tours from them and our business is doing fine…
Similarly the company of Ms Zheng is planning to set up offices in China with the hopes of improving connections with travel agencies there. For one-man businesses like Mr Zhou and Mr Xi however, expanding overseas is out of the question because of limited financial capitals. Nor do they have many alternatives. Both of them are anxious about the survival of their businesses in the future. Although one-man businesses have the advantages of lower operational costs and higher flexibility, they are more vulnerable to market changes as they have limited resources. Larger sized Chinese tour operators have more resources and that makes it easier for them to adjust or devise new business strategies.
Different political-regulations and the responses of operators
Regulations in the Netherlands and Europe
The Schengen Treaty has eased tour handling for Chinese tour operators, by allowing unrestricted transportation and business activities across countries (Latham, 2011). However, differences in tourist regulations between European countries remain a challenge for operators. Since there is no unified set of tourist legislations for all member-states, Chinese tour operators have to make adjustments in accordance to each country’s policies. For instance in countries like Italy and France, there must be a tour guide accompanying a tour and the tour guide must hold the
citizenship of that country, otherwise the tour will be fined, whereas there is no such requirement in the Netherlands. To deal with this, some informants hire an extra “cardboard guide 纸板导游”, to accompany the Chinese tour guide. This cardboard guide is often a guide who has local
citizenship but does not speak Chinese. They are hired to follow a tour just to fulfil the
requirements. According to Ms Shi, some Chinese tour operators whom she has worked for in the past, would rather risk not using any cardboard guide so as to lower even further their operational cost:
Actually authorities rarely check tours. We are moving around all the time and they cannot go after every tour and inspect it. Also, even if a tour does not have a
cardboard guide, it will only be illegal in certain countries. Once it enters countries like the Netherlands where there is no such requirement, it will be legal again…
Though Chinese tour operators are obligated to abide by regulations of multiple countries, the mobility of tours allows them to circumvent these regulations. It is also difficult for governments to monitor them. Moreover, the practices of Chinese tour operators can be both legal and illegal, depending on the country where a tour is located and its legislation.
Another related regulation concerns the maximum daily driving distance allowed for coach drivers and minimum resting hours. This is a standard transport regulation which applies to all European Union members (European Commission, 2014). Drivers cannot drive more than 9 hours per day27 and there must be an overnight break of at least 11 hours. Furthermore drivers who drive for more than 4.5 hours are entitled to have at least a 30 minute break28. For those who break the law, the penalty is heavy. For first time offenders, both driver and employer must pay 1000 euros. Repeat offenders get blacklisted. For the worst offenders, businesses can even be suspended and the license of drivers’ revoked. All informants working for larger sized companies told me that they closely follow this rule, since punishments are so severe. In contrast, the two informants running one-man businesses would rather take the risks and drive longer. Mr Xi explained it this way:
Look, I only host small tours and often times I transport tourists with a small car. Generally police will not check small cars. They only go after those coaches or big vans. In this way, I can minimise delays and make sure tours arrive places on schedule…
The explanation of Mr Xi implies that one-man businesses are more likely to try and evade regulations by remaining manoeuvrable. Being a small scale operation also makes these businesses less visible and easier to escape government inspections.
At the national level, there is limited legislation governing tour operators and their business practices in the Netherlands (in the way of business registration and taxation). Nor does the Dutch government have direct control over the quality of tour guides. According to most
informants, unlikeGermany or Italy, there is no license or professional training required for tour guides in the Netherlands29. Most Chinese tour operators support this less restrictive approach because it enables their businesses to have more flexibility. Nevertheless, both tour guides Mr Yeung and Ms Shi complained that the lack of tight legislation has encouraged Chinese tour operators to behave dishonestly (for example exploiting tour guides). Furthermore, the Dutch government has set up the Nederlands Bureau voor Toerisme & Congressen (NBTC)
organization to support the development of tourism and tourist businesses in the Netherlands. It provides promotional channels and advisory support to tour operators. Mr Yau’s company is thinking about applying for a NBTC promotion in the near future. He believes it will increase the
27 All these measures are to protect the rights of drivers and for safety reason. From the point when the coach is started until it stopped. There is a machine/CD reader to record these driving activities. Police or control parties can always retrieve driving records from that (normally they check it every month but sometimes can be random checks). 28 Other regulations on driving activities include: drivers cannot drive more than 550km per day or faster than 100km/hr. After 250km, drivers must have 15 minute break, 350km then 30 minute and 450km 45 minute break. 29
Ms Shi said, “In the Netherlands, anyone speaks Chinese and wants to make quick money can become a tour guide. They do not need trainings or license. It is very easy.”
credibility of his company with travel agencies in China (that the company is recognised by the Dutch government). All in all, the above findings show that the political-regulatory conditions in the Netherlands are relatively favourable for Chinese tour operators as there are few regulations governing their businesses.
Changing tourism policies in China
Surprisingly the changes to tourism policies in China have a substantial influence on Chinese tour operators in the Netherlands. On the 1st October , 2013 the China National Tourism
Administration30 introduced a new set of tourism policies aimed at tightening control over the unfair, forcible and deceptive behaviours of tourism businesses31, such as unreasonably low-cost tours and forced purchases, etc. (China Daily, 2013). In particular, the following regulations are considered to be the most significant:
1) Travel agencies in China are forbidden to offer tours with unreasonably low prices, that lure tourists into purchasing and paying extra for different activities in order to increase profits. This is regarded as deceptive. As a result, every activity’s cost must be included in the tour price and presented to customers before they join a tour. 2) Shopping activities or taking customers to shopping areas is not allowed and cannot be included in an itinerary. This is to protect tourists from any forcible purchases. Any breach of law will result in heavy fines (to be paid both by the travel agency and tour escorts) and may even be forced to suspend business activities.
Any party found in breach of the above regulations will receive a penalty of 300,000 RMB, or about 35,000 euros (China News, 2013). After the introduction of this new legislation, tour prices increased dramatically because self-paid activity fees now had to be included in the price32. Shopping activities were thus removed from all itineraries (such as visits to the Bijenkorf or Coster Diamond in Amsterdam). As a result, tour operators are no longer able to realize profits from these self-paid activities, nor are they able to obtaincommissions from the purchases of tourists. What’s more, travel agencies in China push down the service fees for Chinese tour operators, with the increased cost of each tour. The profits of Chinese tour operators thus have shrunk considerably.
These regulations however are not without new problems. On one hand Chinese tour operators are no longer allowed to escort tourists to shopping areas, or they will be punished. On the other hand, according to some informants, many Chinese tourists still like to go shopping. Banning shopping activities, therefore, has gone against the interests of Chinese tourists. It also makes it difficult for tour operators to handling tours. They either have to disappoint tourists by not taking them to shopping areas (which may lead to low tourist satisfaction and tips) or breaking the law.
30 It is a Chinese governmental institution which is responsible for all tourism matters of the country. 31
These regulations target tourist businesses only. According to China Tourism Academy (2014), the Chinese government is becoming less restrictive on individuals travelling abroad as the demand for outbound travelling in China is growing rapidly. Meanwhile, it is exerting more controls on tourism industry in China such that the industry will be more structuralised.
32
The increase percentage varied from one tour to another, due to the differences’ in tour durations, self-paid activities and choices of hotels etc.
Seeing such a dilemma, Chinese tour operators have adopted yet a new strategy in order to sustain their income levels. According to Mr Yeung:
Now travel agencies no longer include shopping activities on an itinerary…Tour operators will hand in a separate paper to us tour guides asking us to persuade the Chinese tourists verbally and indirectly. For instance we will tell tourists “the Netherlands is well-known for diamonds, tulips and windmills. Especially diamonds because it has the longest history of polishing diamonds and here they have the best quality diamonds…” Most of the time, Chinese tourists will become interested and ask if they can visit the diamond factory. Then we will take them there…In that way, Chinese tourists go shopping voluntarily and there is no forced purchase…
This indirect persuasion thus avoids putting tour operators at risk of breaking the law while still allowing tourists to make purchases. Another alternative is to ask tourists if they are interested in shopping. Tour guides will then take tourists who are interested to shopping areas, whereas other tourists continue with the original itinerary (for example visiting a museum). In some cases, like that of Mr Choi and Ms Zheng, their companies request that Chinese tourists sign a paper in advance, stating that all shopping activities are strictly voluntary. Tour operators will then keep these agreements as proofs that no purchase is ever forced. This allows tour operators to still make commissions without literally “breaking the law”.
Furthermore, according to Mr Yeung and Mr Wing, more and more tour operators are deciding to specialise in business tours, just like the company of Mr Yau. Business tours include fewer self-paid activities and the service fee is generally higher. Accordingly there is less pressure to squeeze profits from self-paid activities. To attract more business tours, Mr Yau’s company has started providing assistance for business visa applications:
This type of tourists always needs an invitation letter from the host company, and a trip itinerary (including all business activities) before they can obtain a visa. To ease the application process, our company will help contact the host in the Netherlands to arrange these two documents. Many travel agencies in China find this method convenient. They are willing to pay us higher service fees for handling that…
The company thus earns additional profits by providing this service. By far, new tourism legislation in China seems to have affected Chinese tour operators in the Netherlands the most, by having a strong negative effect on their income sources. However, the long term effect of this legislation remains unclear given that they were introduced less than a year ago.
Conclusion
In conclusion, this article examined the Chinese tour operators in the Netherlands and the
dynamics of that business sector. The market conditions, namely the growing number of Chinese tourists visiting Europe and the unfamiliarity of travel agencies in China with European business practices and customs, have stimulated the demand for Chinese tour operators in the Netherlands. This has led to the creation of opportunities for tour operators. To handle Chinese tours, having a Chinese background and an extensive business network appears to be extremely important. The ethnic background of Chinese tour operators has provided them a distinct advantage over their non-Chinese counterparts (allowing them to bridge the language barrier and to work the same
way without contracts). In their business network, Chinese tour operators have contacts with travel agencies in China and service providers, both locally and internationally. These contacts include both co-ethnics and non-co-ethnics. They work with co-ethnics for practical reasons, but also opt for providers with the best price regardless of ethnicity. Comparatively, tour operators require low financial and labour costs (e.g. business registration fees and tour guide salaries) to function. This may also explain why most Chinese tour operators are one-man or small-scale businesses.
Informal practices are commonly used in the business sector. Many one-man businesses are unregistered to evade taxes and legal constraints. When working with travel agencies and tour guides, verbal agreements are used. This helps avoid costs and legal issues when conducting transnational economic activities, and also gives operators more flexibility. Moreover, payments are always done in cash as that allows operators to keep their profits off-the-books and out of the hands of tax collectors. Since the profit margins of Chinese tour operators are low (i.e. the amount charged for service fees), they have to find other ways to supplement their income, such as earnings from price differences and commissions from the purchases made by Chinese tourists. However the absence of paper contracts can easily lead to dishonest behaviours such as breach of agreements and exploitation. Most importantly, these dishonest practices have, later on, caused changes in the tourism policies in China. This business sector is highly volatile and competitive, with competition coming from both within the Netherlands and across Europe. The recent changes in the market have made the business environment much tougher. In order to survive, tour operators have adopted new strategies, such as setting up offices in China, sub-contracting and market specialisation. All in all informal practices seem to be used more frequently than formal practices by Chinese tour operators.
As for political-regulatory conditions, the Schengen Treaty has helped Chinese tour businesses immensely. Notwithstanding, differences in tourism regulations across European countries remain a challenge for these operators. Examples of these differences include requirements for using tour guides with local citizenship, maximum daily driving distances for coach drivers and minimum resting hours. Luckily, the mobile nature of these tours has allowed them to circumvent these regulations. Moreover the practices of Chinese tour operators can become legal or illegal by simply crossing a border, making it difficult to comply to all regulations all the time. At the national level, the scarcity of tourism legislation and the support from government organizations like the NBTC, have favoured the development of this business sector in the Netherlands. Surprisingly transnational regulations, in this case the new tourism policies in China, have negatively affected Chinese tour operators, such as limiting their profits from self-paid activities and the purchases of Chinese tourists. For this reason, some tour operators now use a more indirect method of persuading tourists to buy, while other tour operators have focused on business tours and providing additional services.
On the whole, the findings of this research have confirmed the interrelationship between structural conditions, the resources of immigrants, entrepreneurial spirit and the business practices of ethnic entrepreneurs. Structural conditions have exerted a substantial impact on the daily operation of ethnic businesses. Meanwhile ethnic entrepreneurs are aware of and actively responding to these conditions. They make use of the resources they have to circumvent possible restrictions. Whenever there is a change in structural conditions, ethnic entrepreneurs
structural conditions through their interactions. As a final point, as there are no official statistics on Chinese tour operators in the Netherlands, more quantitative research is needed to get a better picture of this business sector (for example, the number of operators and their sizes).
Comparative studies with other European countries are also necessary as that will show how Chinese tour operators are organised in different locations and what similarities and differences they may share.
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