A strong euro since September has pushed travel agencies in China to the edge of raising price of travel packages to Europe.
"Prices for European trips are very likely to rise at the beginning of next year, to at least 13,000 yuan (US$1,571.95)," said Dun Jidong with China Travel Service Group.
The cheapest tour to Europe now costs 8,000 yuan (US$967.35), as it is in an off season after the October 1-7 Golden Week in China.
The euro has been growing strong against the Chinese yuan since early September. The current exchange rate stands at one euro for 10.83 yuan, compared with 9.93 yuan on August 31.
The strong euro has increased the cost to travel agencies of providing travel service to Europe.
Germany's CAISSA International Travel Service canceled a 15-day Shanghai-Europe travel package this month, which charged 13,300 yuan (US$1,608.22) per person.
The travel agency will lose 400 yuan for each client if the service continues this month, though it earned the company a marginal profit of 100 yuan per person in September, the company said.
"The expensive euro will affect many travel agents that mainly serve individual tourists," said Ge Mu, manager of the marketing arm of CAISSA Travel Service's
Beijing branch.
He said the
Beijing branch did not stop the service as the
Shanghai branch did because it has more clients who take business trips.
"But if euro keeps rising, we will have to raise prices," Ge said.
Many travel agencies hesitate at price hikes in the slack travel season for fear of losing too much business. Some even cut prices for European travel packages.
"Competition is fierce. Companies are desperate to seize a market share, even if they have to run red for some time," Ge said.
However travel agents might take the coming Christmas season as an ideal chance to raise the price as they have waited so long for a hot season, said Sun Changwei, manager of China Youth Travel.
"We'll keep watch. They raise, we raise," said Chen Hui with Shenzhou International Travel Service in Beijing.
Europe has opened to Chinese tourists for just one year, and a host of travel agencies, big and small, have jumped in the business, heating market competition. In
Beijing alone, more than 40 companies are running tour services to Europe.
Chinese tourists can only travel to Europe legally through a travel agency.
