How Hangzhou liberated West Lake and disrupted Chinese tourism

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In 2002, when the eastern city of Hangzhou launched a 100 million yuan “westward expansion of West Lake” project, there was reason to be skeptical. One of China’s most famous historical sites, West Lake has been a staple of poems, paintings and calligraphy for hundreds of years. At the end of the last century, however, it was plagued by a series of problems that were increasingly difficult to ignore: water pollution, bad roads, poor maintenance and the encroachment of rapidly developing villages around its border.

That the Hangzhou city government is attempting to address these issues through a massive infrastructure program came as little surprise. What was surprising was the decision taken from October 2002 to remove most of the fences separating the park from the rest of the city. Overnight, the city transformed what had been a gated scenic area into a free public space for everyone and made West Lake the first scenic spot in China to offer free admission.

This was considered a risky move at the time. China’s domestic tourism market has long been heavily dependent on ticket sales. As recently as 2012, revenue from scenic spot tickets still accounted for nearly 20% of all domestic tourism spending, surpassing all other categories. During the first three years of the free admission policy, Hangzhou officials estimated that the city was losing more than 26 million yuan in potential ticket sales per year, while spending 30 million yuan per year on maintenance, cleaning and management.

The person responsible for the decision to scrap the entrance tickets was Hangzhou Party Secretary Wang Guoping. Wang’s father once held the same position, using his power to protect the city’s Lingyin Temple from destruction by the Red Guards during the Cultural Revolution. Young Wang bet that while many other scenic spots in the country were raising ticket prices to boost revenue, Hangzhou could benefit by veering the other way. By making West Lake tour free, he thought he could attract more tourists to the town; in turn, they would spend their money in the city’s restaurant, hospitality, transportation, and retail sectors, creating jobs, increasing corporate profits, and indirectly increasing the city’s tax revenue. .

To justify this decision, Hangzhou tourism officials then developed what they called the “241 calculation”, estimating that if every tourist stayed an extra 24 hours in Hangzhou, the city’s total annual tourism revenue would increase by 10 billion. yuan. A 2007 report in Shanghai Securities News said Hangzhou’s decision to “return the lake to the people” had reaped economic benefits more than “400 times” the value of lost ticket sales.

The move has also helped insulate West Lake from the ups and downs that plague much of China’s domestic tourism industry. Partly because it’s not reliant on ticket sales, the park fared particularly well in the wake of the 2008 global financial crisis and the COVID-19 pandemic, which otherwise devastated the industry. Chinese tourist.

Tourists at West Lake in Hangzhou, Zhejiang province on October 2, 2022. Lin Yunlong/Zhejiang Daily/VCG

In a broader sense, the transformation of the West Lake Scenic Area reflects China’s gradual move away from treating its heritage as a non-public or quasi-public good to seeing it as a pure public good. After West Lake, many museums and tourist attractions across the country have implemented their own free admission policies. All these attempts were unsuccessful. For example, in 2003, Silver Beach in southwestern Guangxi Zhuang Autonomous Region announced that it was phasing out admission tickets altogether. Due to shortcomings in local finances, administrative capacity and market operations, the beach has since attempted to reintroduce ticketing several times, only to repeatedly rescind the charges amid widespread public opposition.

Partly because it’s not reliant on ticket sales, the park fared particularly well in the wake of the 2008 global financial crisis and the COVID-19 pandemic.

Other scenic places have tried to go in the opposite direction, turning public spaces into non-public goods. For example, the ancient city of Fenghuang in central Hunan province introduced bundle ticket sales in 2013, requiring tourists to pay 148 yuan to enter the city. This policy led to a sharp drop in tourist numbers and badly affected local businesses, eventually leading the town to reverse course three years later by offering free entry with separate entry fees for certain sites.

The success of West Lake’s free-entry strategy cannot be attributed simply to bold, well-executed decision-making; it is inseparable from Hangzhou’s ability to financially and materially support the park’s growth over the past 20 years. On the 20th anniversary of the Hangzhou Decision, it is important to not just focus on cost analysis, but also to recognize the inherent public demand for greater access to China’s most beautiful sights. Meeting this demand – and helping local governments open their scenic parks – can help better integrate scenic areas and towns and ensure that tourists, economic operators and residents all reap the benefits of sustainable tourism.

According to an urban legend in Hangzhou, West Lake’s decision to offer free admission contributed to the success of the city’s best-known businessman, Jack Ma. When Ma, a former West Lake tour guide , launched its online shopping site Taobao in May 2003, six months after West Lake’s ticketing policy changed, it said anyone could open a shop on the platform, for free. The announcement helped attract dozens of merchants to the new site and ultimately propelled Taobao to the rank of the country’s largest e-commerce platform.

The veracity of this story is hard to verify, but it is a reminder that sometimes the smallest decisions can have the most lasting impact.

Translator: David Ball; editors: Cai Yineng and Kilian O’Donnell.

(Header image: A woman dressed as the goddess Chang’e walks on a bridge at West Lake, Hangzhou, Zhejiang province, June 2021. Chen Zhongqiu/VCG)

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