In neighbouring Thailand, one of the world's consistently big travel destinations, 50 per cent of tourists are on a repeat visit. In 1995, half to the nearly seven million people who visited the Land of Smiles had been there before.

In the Middle Kingdom there are no figures available on the number of repeat visitors, but across the industry there is agreement both that the figure is low and that China has to provide more attractions, beyond the standard fare of historical sites and sacred mountains, to ensure repeat visits.

'There are only so many times you want to see the Great Wall,' says the manager of a leading Beijing hotel, who cites the example of the Hong Kong Tourist Authority as a model for Beijing to follow.

But there are other reasons given by the industry for the low level of return visitors. An obvious one is cost.

'Most tourists who come to China are pleasantly surprised, in the last five or six years the tourist authorities have done much to create a tourist infrastructure,' says Heinrich Grafae, general manager of Beijing's Swiss Hotel. 'But altogether an average two or three-week tour through China costs US$5,000 to $8,000 including the flight from Europe. It is not a cheap destination.' According to one industry source: 'Visitors to China are nickeled and dimed to death.' Others point to the practice of charging visitors admission fees to historical and scenic sites which are three or four times the price locals pay. Foreigners must also pay higher air fares.

Flights from Beijing to popular destinations such as Xian, Guilin, Guangzhou and Shanghai cost foreigners 25 to 50 per cent more.

'In the past many tourists accepted these price differentials,' says Peter Finamore, general manager of the five-star Palace Hotel. 'But now they see a lot of wealthy Chinese and they resent this two-tier system.' Another complaint from tourists is the fact there are still areas in China where foreigners are not allowed and regions, such as Tibet, where travel restrictions apply.

Business travel is also changing. Better communications with head office abroad, the maturing of joint ventures and an emphasis on staff localisation has reduced the need for home country executives to travel to China.

The introduction of the five-day working week in China last May has also shortened the duration of their stay. An increase in scheduled flights allows Hong Kong-based businessmen to avoid overnight stays in China when they come in for one-day meetings.

Hotels are suffering as a result and in some months the occupancy rate is extremely low, particularly at the top end of the market. In December the China World Shangri-La in central Beijing dropped to less than 35 per cent - although its competitors averaged between 55 per cent and 60 per cent. Five-star hotels are now competing, not only with each other but also the four and even three-star sector, which caters to the growing leisure market, by offering packages and discounts.

Some of the lower-rated hotels are confident they can withstand the pressure.

At their New Year party, the management of the popular four-star Jianguo Hotel were bragging that their average room rate of $100 per night was about the same as the five-star hotels which carry higher operational costs.

In response to this competition, Beijing tourist authorities recently tried to make hotels agree to a proposal which would set floor and ceiling prices for all rated hotels.

'Hotels in China now operate in a relatively open economy and anything that would amount to interference would set a dangerous precedent,' Mr Finamore says.

The Tiananmen Square crackdown, which prompted tourists and commercial visitors to stay away in droves, began to thaw in the early '90s and 1994 was a boom year for hotels. Tourism and business travel was up and a large number of foreign businessmen were staying long term in top hotels as they waited for quality housing.

The following year management raised room rates - by an average of 17 per cent in Beijing's JV hotels - but last year saw prices and occupancy inch back and revenue fall by nearly 6 per cent.

Luxury apartments and housing began to come on stream from mid-1995 and many top hotels lost their long-term guests as executives moved into rented accommodation.

It has become increasingly expensive to do business in China and multinationals, such as GM, Motorola and Westinghouse, are tightening their budgets and demanding four-star rates from five-star hotels.

In China's main cities, bars, nightclubs and restaurants have sprung up in the past few years providing hot competition to the food and beverage side of the hotel business.

In the airline business an increased number of carriers flying into China means 'business is very tough now', says Helena Poon, deputy general manager of Lufthansa in Beijing.

Airline ticket prices have not been increased since 1995 but last Wednesday all outgoing flights, except those to Hong Kong and South Korea were hit by a fuel surcharge of up to 5 per cent.

But the number of visitors from many destinations is up. Beijing arrivals from Singapore jumped by 18 per cent last year but those from Japan - a crucial high spending sector - grew by little more than 1 per cent, largely due to the slowdown in the Japanese economy.