Golden Tulip secures £33m to build up UK presence

e-Tid.com  -  Golden Tulip UK (GTUK) has raised £33m in equity and debt funding to launch an expansion programme intending to add at least 30 properties to the four in its UK portfolio.

It has signed a 10-year master franchise agreement with Golden Tulip Worldwide (GTW) to operate the four-star Golden Tulip and superior budget Tulip Inn brands in the UK. GTW was sold by Spanish chain NH Hoteles to an MBO this February.
MD Peter Roberts said that 17 newbuild hotels will be developed, some of which will be owned and operated by GTUK while others will be leased. All the new properties will operate as Tulip Inn. The balance of its target of 30 will be franchisees operating either brand.

GTW MD Hans Kennedie, who led the MBO, said that Golden Tulip and Tulip Inn’s presence in Europe would ‘ensure increasing recognition for the UK’. Golden Tulip has 420 hotels in Europe.

VC fund managers Graphite Capital is behind the equity while Barclay’s hospitality and leisure team is providing the debt funding.

The clock is ticking for Six Continents 

Daiy Mail  London  - The clock is ticking for Six Continents. The former Bass, armed with a GBP 3bn war chest from the sale of its brewing arm, has given itself until December to find a suitable acquisition or return the money to shareholders.

Broker Morgan Stanley added to the pressure. It downgraded the operator of hotels and pubs including Holiday Inn, Inter-Continental and All Bar One to 'underweight'.

The US investment house doubts whether the group, criticised in the past for overpaying, can pull off the great deal it needs to boost expansion prospects. Despite this, Morgan Stanley thinks the chances of its opting to return the cash are fading.

'Six Continents has told us that lower hotel share prices, including its own, make an acquisition more likely than a return of funds,' it says.

The broker expects the dividend to be cut if a deal goes ahead.

Morgan Stanley downgraded its 12-month target price to 675p from 760p. It sees poor growth and the cost of refurbishing pubs and hotels weighing on the shares, down 12 1Z2p to 594 1Z2p.

They have crumbled from 1175p less than five years ago.

The Footsie spent the day in the doldrums, closing down 46.4 points at

4180.9. Manufacturing data for August from the Chartered Institute of Purchasing and Supply, showing 'subdued but solid overall growth', failed to lift the index. Volume was thin, without the direction of Wall Street, which was closed for Labor Day.

Sterling was trading at $ 1.549. The euro was worth 63.5p and 98.5 US cents.

Royal & SunAlliance led the blue-chip fallers, down 61Z2p to 118p, on worries that its savers will switch to rival insurers. Fears over its solvency levels also resurface whenever the Footsie heads south.

On a bad day for the sector, Swiss insurance giant Zurich Financial added to nerves with reports it is planning a large rights issue.

Morgan Stanley was also gloomy, downgrading its view on the industry to 'cautious'. Legal & General fell 43Z4p to 118p and Prudential lost 19p to 490p. Aviva, the former CGNU, was 15

Z2p cheaper at 4831Z2p. Diageo, whose brands include Smirnoff Ice and Guinness, rose 11Z2p to 7831Z2p ahead of full-year results on Thursday. The shares were in demand on reports that it plans to return GBP 1bn to shareholders following the sale of its Burger King chain.

West LB upgraded the stock, encouraged by some recent positive news on the US wine and spirits mar- BROKER Merrill Lynch likes the look of Next, off 5p at 838p, ahead of next week's half-time figures. Next, down from GBP 11 in May, has been dogged by worries over margins and Marks & Spencer's resurgence, which ML thinks overdone. It notes directors have been buying shares recently, and thinks fashion trends remain strong. ket from Allied Domecq, down 3p to 406p. Airline stocks were jittery. Following the suspected hijack of a Ryanair plane just days before the first anniversary of the September 11 attacks, British Airways was trading 7p lower at 145p.

Dresdner Kleinwort Wasserstein says heightened concerns over military action in the Middle East and the impact on world oil prices have dampened enthusiasm for airline shares. Ryanair fell 15p to 3621Z2p, easyJet was 17p cheaper at 308p.

Tesco slipped 1Z2p to 211p, despite Credit Suisse First Boston upgrading the supermarket group to a buy with a 275p price target.

Better-than-expected figures sent polymer group British Vita 13p higher to 2411Z2p. The firm, which makes fire resistant fillings for furniture, lifted half-year profits 5pc to GBP 39.3m, and pledged to put in the same sort of 'relative improvement' in the second half.

British Vita will use the GBP 144m proceeds from the sale of its stake in Spartech Holdings to accelerate its share buyback programme.

Whitbread jumped 26p to 556p after it revealed sales up 3.8pc for the first 24 weeks. Chief executive David Thomas said its Marriott hotels are back in the black.

Sales at Travel Inn jumped 6.5pc and at David Lloyd gyms 6.3pc. Beefeater pub restaurants disappointed, however, fuelling speculation that the 250-strong chain may be sold.

SIG, Europe's biggest distributor of insulation products, slumped 24p to 204p after first-half profits fell 14pc to GBP 19.8m. Trading remains tough in its commercial interiors division, which customises and refurbishes offices.

Australia: Alarm bells as tourism falls into black hole

Smh.com  -   Australia's tourism boom is headed for a bust, with the Federal Government warning that the industry hailed as our economic saviour is sliding into crisis because of its failure to "face reality".

Delivering the wake-up call, the Minister for Small Business and Tourism, Joe Hockey, has produced figures showing the sector faces a $2 billion black hole - much of it centred on Sydney.

This sum, the equivalent of more than 12,000 jobs, represents the annual foreign exchange loss to Australia caused by the failure to pull out of the tourism slump after September 11, Ansett's collapse and the Olympics.

"It's a bloody disaster," Mr Hockey is understood to have told Government backbenchers during a confidential briefing last week. He reeled off a list of bleak statistics, including a 10 per cent fall in international tourism over the past year, investment at its lowest level in a decade and some hotels running 40 per cent below capacity.

He told the MPs that the sector was deluding itself in believing the downturn was cyclical and easily arrested.

This "rose-coloured view" ignored the fact that the $71 billion industry, now rivalling the minerals sector as an export earner, faced "massive structural problems".

Mr Hockey has also accused the industry, and especially state governments, of trying to attract tourists with halls of fame, white elephant works projects and expensive staged events. At the same time, basic needs such as roads were being ignored.

"The reality is the tourism industry cannot rely on baubles and trinkets any longer," he told the backbenchers.

Sydney's main drawcards, such as Bondi Beach and Manly, were attracting more than 8 million visitors a year, yet nothing had been done to improve road access to them.

Mr Hockey's remarks come just weeks before he is due to present cabinet with a blueprint for reforming the sector.

He declined to comment further when contacted yesterday but has made it clear in recent talks with industry leaders that while structural problems can be rectified, further pain is inevitable.

In the party room, Mr Hockey said that tourism, making up nearly 5 per cent of GDP and directly employing 551,000 people or 6 per cent of the workforce, would have to become more efficient by shedding worthless or underused assets.

He has also accused the industry of responding too slowly to demographic and other social changes and the fierce competition for international tourists.
As well, domestic tourism, responsible for 80 per cent of turnover, had been flat for three years and showed no signs of turning around. The rising cost of housing and a surge in such activities as gambling had robbed families of money formerly spent on holidays or travel.

People were also struggling to get time off, Mr Hockey said. Thirty per cent of Australians took no holidays last year - a development that industry experts blamed on the shift to contract employment and the trading away of leave in enterprise bargaining.

The industry, despite being Australia's fourth-biggest export earner and biggest services export, had spent only $5 million on research and development in the past year.

Mr Hockey believes such complacency is also due to forecasts that international tourist numbers will rise to 10 million by 2012. But many of the new visitors, from places such as China and India, would not be big spenders.

Forgetful guests leave valuable haul

Guests are more likely to leave their own valuables behind than walk away with hotel bathrobes, according to one London hotel.

The five-star Royal Garden Hotel in London has just unveiled a weird and wacky collection of abandoned items, including phone chargers, wigs, false teeth and even an entire national cricket team’s kit, left behind after forgetful guests check out of the Kensington property.

When it comes to taking a keepsake however, it seems guests cannot resist coat hangers, kettles and even bed linen.

Graham Bamford, the hotel’s general manager says: "It’s intriguing to see what guests take home as souvenirs of their stay and some of the more quirky items that are left behind."

Six Continents Hotels Launches New Online Site For Last Minute Getaway Travelers

Consumers Can Now Conveniently Book Last Minute Travel Deals Online

ATLANTA, Aug. 29 /PRNewswire/ -- Six Continents Hotels Inc., the world's leading global hotel group, announces the launch of a new online site for the convenient booking of affordable last minute getaways.

Now Six Continents Hotels' customers can search hundreds of cost-saving hotel and flight packages online at http://www.lastminutegetaway.com/. Packages can be booked from 14 days to three hours in advance and include accommodations at participating hotels worldwide, which include Inter-Continental, Crowne Plaza, Holiday Inn, Holiday Inn Express and Staybridge Suites hotels.

According to PhoCusWright Research May 2002 report, vacation packaging is a growing business with estimates for the North American market totaling US $17 billion to grow to $22 billion by 2004. Today's savvy and time-pressed consumers want to travel to exciting destinations, but don't always have the time to book each element of their travel arrangements separately. Vacation packages can help consumers save time in planning and help them customize the experience they seek.

Now, with Six Continents Hotels' Last Minute Getaway site, arranging a quick and affordable getaway has never been easier. Consumers can choose where and when they want to go with a click of the mouse.

All packages featured on the site combine a Six Continents Hotels property with air and/or car rental, as well as fun and unexpected extras as available. Packages listed on the site are guaranteed to be available and offer a great value for getaways to a wide variety of destinations in the United States, Canada, Mexico, the Caribbean, Europe and South and Central America.

Six Continents Hotels has allied with Site59, the industry leader in last minute getaways and dynamic packaging technology, to provide both technology and travel package content.

"These last minute getaway packages are unique to the industry and reflect Six Continents Hotels commitment to providing our guests with another way to maximize their travel budgets and time," says Eric Pearson, vice president of e-commerce, Six Continents Hotels. "Our relationship with Site59 gives us the ability to attract the large and growing segment of leisure consumers who plan and purchase at the last minute. Our new last minute offerings make getting away simple, affordable and convenient."

"We are pleased to associate with Six Continents Hotels to provide valuable travel deals to their online customers," said Damon Tassone, general manager of Site59. "This new distribution alliance is an exciting new avenue that expands upon our existing supplier relationship." 

Marriott UK returns to positive returns

e-Tid.com  -   Whitbread’s pre-close trading statement reveals that Marriott’s UK hotels have ‘returned to positive territory in recent weeks,’ with like-for-like growth since the start of March only 1.9% short of the same period last year.

Whitbread, which operates the Marriott franchise in the UK, put the improvement down to ‘vigorous sales activity and effective cost control.’

Meanwhile, Travel Inn has improved by 6.5%, a ‘remarkable achievement,’ according to chief executive David Thomas. Thomas however added that he was ‘not satisfied with the levels of sales currently being achieved by Beefeater’ which are 1.5% ahead of last year.

David Lloyd Leisure is 6.3% ahead of last year.

Overall, Whitbread’s total sales are 3.8% ahead of last year.

Coverage of the results on private investors’ site Hemscott suggests that Beefeater might be sold. A Whitbread spokesman is quoted as saying; “It is something that will have to be considered. The current level of sales growth is just not acceptable and there is a real determination to address the issue.

Singapore relaxes rules for conversion of hotels 

Channel NewsAsia  -  The Urban Redevelopment Authority and tourism board are relaxing the rules safeguarding Singapore's hotels from being removed or converted.

With the revision, only hotels standing along two core "spines" will be protected.

One spine is the Orchard Road and Marine Square strip, which currently houses 20 hotels including the Hilton, Raffles, Conrad and Ritz-Carlton.

The second protected spine runs along the Singapore River and Havelock Road, which is home to 9 hotels including the Fullerton, Grand Copthorne and Merchant Court.

The URA will also allow hoteliers greater flexibility in converting hotel rooms to other uses to better serve their guests.

This means 19 hotels will no longer safeguarded, including the Four Seasons, Regent, Traders and Holiday Inn Park View.

Times has Starwood on/Whitbread off Travelodge shortlist

e-Tid.com  -  The Sunday Times reports that Whitbread has lost interest in buying Travelodge and Little Chef while Starwood is tipped to have made the shortlist.

Travelodge and Little Chef were put up for auction by Compass at the end of June.
This weekend’s story has ‘multimillionaire leisure entrepreneur’ Hugh Osmond’s Sun Capital vying with venture capitalists Apax to buy the brands. Whitbread, tipped as a possible buyer previously, ‘has dropped out of the race’ while Starwood is tipped as the trade buyer on the list.

Australia’s newest five-star resort main feature: luxury tents

 
FIFTEEN luxury tents with panoramic views of Uluru have become Australia's newest five-star resort.

Designed and constructed by Bovis Lend Lease for the General Property Trust, the "Longitude 131" resort has been hailed as an example of excellence in design and environmental management.

Billed as the last word in luxury camping in Australia, The Sunday Times in Britain has just nominated it as "the best new wilderness resort in the world". Operator of the resort, Voyages Hotels and Resorts chief executive officer Grant Hunt, said Bovis Lend Lease had applied significant awareness of cultural and environmental sensitivities in the planning stages.

This allowed the resort to become one of the first resort projects in Australia to be approved under the Commonwealth Environment Protection and Biodiversity Act 1999, Mr Hunt said. "With our close proximity to a World Heritage listed-national park and having to meet a strict environmental plan under the Environment Protection and Biodiversity Conservation Act, the efforts of Bovis Lend Lease are seen as even more outstanding," Mr Hunt said.

Positioned along a dune escarpment, each of the 15 luxury tents has panoramic views of Uluru and the surrounding desert landscape, with a central "dune house" built over two levels featuring lounge and dining areas, library and kitchen facilities and other public amenities.

Mr Hunt said the "dune house" was built partially into a sand dune to take advantage of the earth for natural insulation.

Bovis Lend Lease Queensland and Northern Territory general manager Gavin Stubbs said the use of fabric roofs to all buildings was integral to the design to create the camping effect.

"But the reality was that with temperatures in central Australia fluctuating from extremely hot to sub-zero within a 24-hour period, Longitude 131 guests would expect air- conditioned rooms," Mr Stubbs said.

TUI launches German no-frills airline

Jumping onto the no-frills bandwagon, Germany’s TUI Group chief Michael Frenzel said the company would launch a new no-frills airline, Hapag Lloyd Express. The budget carrier would commence flights from Cologne-Bonn airport from December with one-way ticket starting at 25 euros (US$25) excluding tax for European destinations. Flights within Germany would start at 10 euros before tax.

According to TUI, a new wholly owned TUI subsidiary would be responsible for sales and operations. The new airline would fly eight planes leased from TUI’s partner, regional airline Germania, whose existing Frankfurt-Berlin and Cologne-Berline services would become fully integrated within Hapag-Lloyd Express.

Apart from Virgin Express and German Wings, a unit of Lufthansa’s partner Eurowings, Hapag-Llyod Express is the third new low-cost carrier aiming to start offering services from Cologne-Bonn this winter.

Meanwhile, Frenzel reiterated that his company was not aimed at taking on Lufthansa. Rather the booming market for low-cost travel offers tremendous growth potential

Niche Show Grows Bigger and Better

Incentive Travel & Conventions, Meetings Asia (IT&CMA) 2002 promises buyers and visitors more to explore and experience in its new location, Thailand. TTG Asia Media, organiser of the IT&CMA, is planning a full programme of activities not only to engage the senses of attendees but also celebrate the show’s 10th anniversary. A niche segment of the travel market, MICE (meetings, incentives, conventions and exhibitions) offers variety and quality of products and services.

Occupying 7,000 square meters of space – 20 per cent more than the 2001 event – IT&CMA will be held from 23-25 October 2002 at the distinctive IMPACT Convention Centre in Pakkret City, north of Bangkok. Bookings have surpassed exhibit space targets of previous years and the show is still growing. More than 350 hosted buyers and an equal number of exhibiting companies are expected at the trade show.

Project Manager, Melinda Mak said: “There is a wider selection of Asia-Pacific exhibitors, especially from Thailand – we have an increase of about 150 per cent Thai exhibitors compared to last year. The Tourism Authority of Thailand and MICE industry are giving this event full support. For instance, all the 16 official hotels are five-star properties and they are offering to host invited buyers and media. They are also extending special rates to sellers.”

However, she added that it is not just Thailand that will be on show. “The Hong Kong Tourism Board is inviting more industry members to join the Hong Kong pavilion for 2002. They also plan to do a roadshow in Bangkok before IT&CMA. Even Mainland China is taking the opportunity to tap the lucrative MICE business. The Beijing Tourism Authority is helping to drum up interest and attendance,” she said.

As the IT&CMA format is one of prescheduled appointments, exhibitors and buyers have until end of July to register. While the content and composition of the show have been revitalised, the website http://www.itcma.com.sg has also been enhanced to allow exhibitors, hosted buyers, trade buyers and trade visitors and seminar participants to register online. Buyers and exhibitors can also submit their list of contacts they wish to meet for the pre-event appointment scheduling. Exhibitors will be able to download the exhibitor manual.

As the foremost exhibition in Asia-Pacific focusing entirely on MICE products and services, IT&CMA has a winning formula in combining education and entertainment in just a few days. Adventurer Khoo Swee Chiow will be the keynote speaker at the conference preceding the show. Speaking on “From Challenge to Challenge”, Mr Khoo is well qualified to encourage delegates to scale new heights as he has conquered the seven summits of the seven continents, including Mount Everest, the North and South Poles.

Morning seminars will discuss macro industry issues, special events, technology and the two biggest markets in Asia, China and India. Spicing up the exhibition will be new exhibitors from Japan, Nepal, Vietnam, India, Maldives, Brunei, Dubai, New Zealand and Germany, while several hotel chains and individual properties are joining the annual list of corporate exhibitors.

All this has drawn great interest among the media and buyers. There are 17 supporting publications for IT&CMA 2002 providing worldwide coverage and publicity. Buyers’ response has also been overwhelming.

Ms Mak said: “Many buyers are excited about the new host country, Thailand, and are also signing up for post-tours. These six tours are specially designed to let buyers and media delegates relish different parts of the country, from lush green hills to stunning beach resorts. In the itinerary are Chiang Rai, Chiang Mai, Kanchanaburi, Hua Hin, Koh Samui, Krabi, Phuket, Pattaya, Rayong and Northeast Thailand.”

Website: http://www.itcma.com.sg  

China Finds Its Shangri-La In Tourism

Washington Post  -  Never mind that the new name of this town has no meaning in the local Tibetan language. In the global vernacular of yearning, it conjures up images of a place not unlike this one -- of villages beneath jagged peaks, and red-robed monks walking slowly past mud-walled homes to the monastery.

More to the point, the name inspires people to spend large sums of money to come here. So, this summer, the old Zhongdian officially became Shangri-La, the mythical hamlet of James Hilton's "Lost Horizon," a landmark work in the West's enduring fascination with things Tibetan. The change was blessed by China's central government, which has plans to attract well-heeled visitors to this ethnically Tibetan locale in northern Yunnan province as part of a national effort to boost tourism.

Not long ago, the prospect of China's Communist Party government emphasizing Tibetan flavor was unthinkable. For decades, the government suppressed the identity of its 4 million ethnic Tibetans as it labored to assimilate their lands and extinguish widespread independence aspirations. Tibetan schoolchildren were told that they were simply Chinese. Tibet was a backward land populated by savages, whose Buddhist religion was so much superstition. During the Cultural Revolution, roving bands of Red Guards leveled nearly every Tibetan Buddhist monastery in the land.

But the government has more recently come to understand that, in much of the world, Tibetan life is a source of wonder. In other words, it is a valuable commodity. And in China these days, business interests have come to take precedence over ideological and security imperatives. For the people here, the transformation promises a critical infusion of tourist spending for an economy reeling from the demise of the formerly predominant source of livelihood, logging.

While China's continued emphasis on profit explains much of its Shangri-La embrace, a cultural shift may also be at work. More than 90 percent of the tourists who arrive here are Han Chinese, the country's dominant ethnic group. They have historically viewed Tibet as a cold and uncivilized place. But as China continues its transformation from an agricultural society to one defined by city living, wealthier urbanites are being seduced by the same Shangri-La fantasy that has captivated the West for more than a century, the dream of an unfettered and natural place far, far away.

"China hasn't had a modern life, but now it's beginning to get one," said Orville Schell, a China expert whose book, "Virtual Tibet: Searching for Shangri-La from the Himalayas to Hollywood," explores Western obsessions with this area. "The stress, the pollution. Their lives are a bit defoliated of color, adventure. In a very inchoate way, they find the promise of escape now more appealing."

The place now being served up as escape fare is at a cultural and economic crossroads. In this square-built town of 140,000, monks ride motorcycles and shop for the latest mobile phones alongside stalls that sell butter churns and yak-tail brooms. Teenagers spend hours in Internet cafes battling aliens, while road crews still pound rocks into gravel with hammer and chisel, and government officials hover for warmth in their offices over aluminum trays of coals.

Now, the town is selling a Western-defined copy of itself to all comers in a bid to improve its future. Which is how to explain the team of workmen from what is today called Shangri-La County busily affixing wood carvings and painting multi-hued floral designs to the fronts of stores, hotels and offices. They aim to imbue a distinctive, not to mention state-mandated, Tibetan aesthetic.

Shopkeepers have been trading in Chinese character-signs for new ones that also include Tibetan script. Usage of the script is rusty here, which has resulted in some unintentional satire. A sign that should read "Beauty Center" instead spells out "Leprosy Center." The front of Fresh, Fresh Restaurant now bears a sign that says "Kill, Kill."

"We're building the Shangri-La brand," said Liao Chunlei, vice director for the Shangri-La County Ministry of Tourism.

On a recent morning, his office was packed with a group from a local monastery whose walls had collapsed in a recent flood. They were hoping the government would rebuild them, now that monasteries have morphed from something to be wiped off the land into something to be marketed to visitors.

The county government is already paying for a lot of other projects, including a massive road-building effort and the expansion of the local airport as the government courts flights from Shanghai and Guangzhou. The government has already spent $500 million on such projects since 1995. It plans to spend nearly $300 million more over the next three years.

Before 1994, the government restricted travel to the area because of its sensitive position next to the semi-autonomous region of Tibet. Since it was opened, visitors have come in ever-larger numbers -- more than 170,000 in 1996 and more than 1 million last year.

In a recent swing through ethnically Tibetan areas of Yunnan province, most people were eager to welcome more visitors and the money they bring. Many see tourism as a way to protect the Tibetan way of life by lifting incomes and reducing the compulsion for people to abandon villages to look for work in cities.

"Tourism is helping to revive Tibetan culture," said Khedorje, a retired school teacher in the village of Hara, some 12 miles north of Shangri-La. Like many Tibetans, he goes by a single name. "In towns everywhere it's Tibetan style, Tibetan writing."

Khedorje has a roadside shop and a collection of shacks that he rents to mushroom pickers. He sells tea and biscuits to truckers who navigate the torturously rutted dirt track connecting his village to the rest of the world. The national government is now turning it into a modern highway -- one slated to eventually connect Kunming, Yunnan's capital, to Tibet's capital, Lhasa, nearly 1,000 miles away. Khedorje dreams of opening a tourist lodge atop his ridge.

Zhongdian is not the only place to have recognized the value of convincing the world that it is the spot that inspired Hilton's 1933 novel and the Oscar-winning Frank Capra movie. After the town proclaimed itself Shangri-La in 1997, following what local officials say was a genuine research effort, a dozen towns in the area -- some in Yunnan province, some in neighboring Sichuan -- lodged competing claims that they were the real heaven-on-earth. A relentless marketing battle ensued, in what became known as the "Shangri-La War."

Last December, Zhongdian won, gaining the government's blessing to become Shangri-La. In July, prodded by officials in Beijing, provincial governments in Yunnan, Sichuan and Tibet together signed an expanded peace agreement that established a greater Shangri-La, an area straddling three provinces that encompasses 50 counties. They agreed to jointly invest nearly $10 billion to develop roads, erect hotels and expand airports.

The central government has agreed to contribute an undisclosed sum, officials here said, as it presses forward with larger initiatives to lift China's lesser-developed western regions and to increase tourism, which already amounts to about 5 percent of the country's gross domestic product, according to the state travel bureau. By 2020, China aims to increase its tourism revenue to almost 8 percent of its economy.

Shangri-La clearly has the assets to attract visitors. When the sun is shining on the sunflower farms that cover the plateau, stretching out to the 18,000-foot peaks of the Hengduan range, this is surely one of the more spectacular places in the world. Two hour's drive south is Tiger Leaping Gorge -- sheer cliffs dropping thousands of feet to whitewater.

In Triney village, Rongdeng and his family, seven people in all, had enjoyed a relatively high income of about $2,000 a year during the logging boom. When the government banned logging four years ago, after severe floods on the Yangtze River that were blamed in part on too many bald hillsides, the family shifted into digging sand for the cement business. But new

environmental protections soon killed that niche, too. Two years ago, the family lived on less than $800. Growing barley occupied most of their time. They threshed it by hand, unable to afford machinery.

These days, Rongdeng and his family have a new source of income: Visitors pay about $3 each to come and see their home with its whitewashed mud walls, prayer room and wood floors anchored by an enormous tree trunk. Rongdeng's father, who used to drive a logging truck, now drives tourists around the valley. Their income is back to about $1,200 a year.

Still, the influx of Han people is not without tensions. Many come here not because of attraction to Tibetan culture but to gauge the course of China's national aspirations.

"China is developing and I want to see the progress," said a 31-year-old tourist from the central Chinese city of Wuhan, who gave his name only as Liu. "This area used to be really backwards." Such attitudes are resented here.

Tour operators hope to see more Westerners, who have a reputation as more sensitive. "Chinese tourists throw rubbish and glass out of the buses and they don't care," said Dakta Gedang, who runs a Shangri La-based eco-travel company, Outdoor Adventure Department. "All they care about is singing karaoke, eating Chinese food and staying in a high-class hotel. But Western tourists are interested in the scenery, the people, the culture."

Still, young Chinese tourists are increasingly arriving independently, dressing in colorful Tibetan clothes, not unlike bohemian-inclined Westerners in Bali or Patagonia.

On a recent afternoon at the Songzanlin monastery, the name of which means "playground of the holy deities," one bus after another pulled in bringing Chinese tourists to see the gold-roofed complex built in the 17th century. Inside a large meditation room, a guide spoke loudly in Mandarin Chinese to a group of two dozen bus tourists, describing seated Buddha figures, while a monk navigated around the crowd. He poured yak butter into an urn, setting it aflame as an offering. Then he knelt in prayer as one of the visitors pulled out a cell phone and began dialing.

"A lot of people are not very sensitive to this place, and it causes some distraction," said Lobsang, a 62-year-old monk seated nearby. "But, as Buddhists, we are working for the well-being of other people. If people come here, it offers us an opportunity to teach love and compassion."

Another monk, Nawan Leshi, 31, took a more pragmatic view. "A lot of people coming here is good for the monastery because we can sell more lockets and incense," he said.