American Express appoints lead leisure travel franchise partner in China

American Express and China International Travel Service Head Office (CITS) entered into a new and exciting partnership today in Beijing to develop the growing leisure travel market in China. Under the Franchise Agreement, American Express Travel Service Network International (TSNI) will expand its existing network of travel offices in China by appointing CITS as the only lead franchise partner, to identify and acquire like-minded partner agencies to join the fastest growing leisure travel network in China.

American Express provides leisure travel service to American Express Cardmembers and customers at more than 1,700 travel office locations in 130 countries, through partnerships with leading travel agencies around the world. The partnership with CITS reinforces American Express' confidence in the travel market and its commitment to developing its business in China. Further, it follows the Chinese government's focus on tourism as one of the key economic growth engines for the future. According to the estimation of World Tourism Organization (WTO), China will become the most popular tourist destination and the fourth largest tourist generating country in the world by the year 2020. This lead franchise strategy places American Express in a strong position to expand our service capability in the country and provide partners in China an opportunity to build their businesses with one of the world's most respected service brands.

Currently, TSNI has 20 partner agencies in various major cities in China, including Beijing, Shanghai, Guangzhou, Tianjin, Wuhan, Chengdu and Urumqi. The lead franchise strategy will allow us to rapidly expand beyond our existing locations, to better serve the local Chinese travelers in the smaller provinces. 

Mr. Jonathan S. Linen, Vice Chairman of American Express Company, said, "This is a partnership in which everybody wins in China. CITS wins by leveraging our global experience and worldwide travel network, and we win by partnering with the leading local leisure travel company in China." Mr. Linen continued, "Most importantly, our leisure travel customers and American Express Cardmembers gain guaranteed access to superior service, and our partner agencies win through the exciting suite of value proposition offered by the CITS-American Express alliance."

Through partnership with CITS-American Express, CITS-American Express franchisee can immediately leverage on: 

1. The Advantage of Brand Recognition - Enjoy instant recognition across China and around the world when CITS-American Express franchisee aligned their business with the combined strength of two leading travel brands.

2. Develop In-bound Business - Every year, more than 1,000 travel agencies in the world channel over 500,000 inbound travelers to CITS. American Express customer base is growing globally with over 50 million Cardmembers worldwide. By becoming an appointed inbound agent, CITS-American Express franchisee will be able to further build their inbound business.

3. Preferred Supplier - CITS and American Express employ both local and global supplier negotiation resources to maximize travel supplier revenues. CITS-American Express franchisee can take advantage of our combined supplier leverage. The domestic CITS supplier program consists of 50 airlines and 2,000 hotels across China, and globally American Express has over 4,000 hotels within the worldwide select program to attain better benefits & commissions for their agency.

4. Technology Expertise - CITS-American Express franchisee can take their business online by leveraging on the CITS suite of interactive tools that includes internet access and booking engine capabilities.

5. Develop their Outbound Business - American Express has over 1,700 offices in over 130 countries, in addition to CITS' 13 subsidiary offices worldwide. CITS-American Express franchisee can leverage on this global network to obtain preferential ground arrangements (hotels, excursions and transfers), in order for them to build new and unique tours for their customers. 

6. Training - CITS-American Express franchisee will also receive comprehensive business management training from CITS together with American Express' quality programs on topics ranging from customer service to telephone skills.

Mr. Zhang Bei-ying, Executive Vice President of CITS Head Office, commented, "This is another important milestone of our long-standing relationship with American Express. We are very proud to be working with such a recognized service brand. Leisure travel is not the future…it is the present. We appreciate the partnership with American Express and recognize this gives us competitive edge through American Express' global network and experience. In return, we will do our utmost to ensure that the CITS-American Express travel brand is widely represented in China.

American Express in China

Following closely on the heels of the recent opening of American Express' business travel joint venture with CITS in May 2002, the first Sino-US business travel joint-venture in China, the Lead Franchise Agreement is a further indication of American Express' commitment to China.

American Express has had a presence in China for over 85 years. Cooperation between American Express and CITS goes back for more than two decades when CITS was appointed as the ground service provider for American Express inbound group tours in 1980. In 1993, American Express appointed CITS as the Travel Service Representative in China, providing travel services to American Express Cardmembers and customers.

American Express' travel partnership further demonstrates its contribution to travel and tourism in China. Since 1994, the American Express Card was designated by the China National Tourism Administration as the "Official Card of Tourism for China" that included a series of marketing programs aimed at attracting international tourists to China. Among its many contributions to the China market, American Express also launched the Heritage Preservation Project at the Palace Museum in Beijing in 1987; established a joint Tourism Training Center at the China Tourism College in Beijing in 1992 where over 900 tourist managers were successfully trained. Over the past five years, the Company has made a total donation of US$260,000, through the American Express-sponsored World Monuments Watch program, for the conservation work of various historic sites in China, including San Xing Dui in Sichuan, Xian Nong Tan in Beijing, and Xuanjian Tower in Shanxi.