The China Travel Service Hong Kong Ltd (CTSHK)plans to acquire mainland travel agencies by the end of the second quarter in a bid to tap the mainland tourist market,said Shen Zhuying,general manager of the CTSHK.

Shen said CTSHK is planning to reinforce its tourist services on the mainland,establish branch offices across the country and invest in western China to help develop its scenic spots.

The aggressive march into the mainland travel market could add fuel to the fires of fierce competition already burning throughout the sector,said an industry analyst.

The China Travel Service Hong Kong Ltd,a branch of the China International Travel Services,gained a profit of 650 million yuan (US$ 78.3million)last year,according to the company's annual report.It had been expected to gain profits of 800 million yuan."The market has too high expectation of the Hong Kong business,"Shen said.Two things unexpectedly happened in the second half of last year.The mainland government has announced the abolition of the quota system for mainland people to visit Hong Kong this year.As a result more travel agencies sparked price wars with an average cut of 30 percent.CTSHK profits have dropped by 34 percent.The September 11terrorist attacks have put larger-than-expected impact on the company,with less Taiwainese doing business on the mainland,Shen said.

( eastday.com April 16, 2002)