China's tourism authority says the number of inbound tourists has dropped for three consecutive months. In October alone, foreign visits to China dropped by more than 11 percent.

Authorities tried to use the Beijing Olympics to boost the industry, but the financial crisis has hampered the plan. Most foreign visitors to China come from the United States, Europe and Japan all hit hard by the crisis.

Tong Lei, Chairman of China Int'l Travel Service, said, "From what we know, consumer confidence keeps declining in markets like the United States and Europe. This has put significant pressure on our business."

Jiang Jiannig, CEO of China Youth Travel Service, said, "Economies in major western countries have entered a period of recession. I think the real impact on China's tourism will only truly appear in the first half of 2009."

As less foreigners plan trips to China, travel agencies are trying to boost business by fully exploiting the potential of the domestic market. Many have put together travel packages to warm destinations as winter approaches. Some have cut prices on foreign tours by a third.

As competition in the domestic tourism market becomes more fierce, authorities say travel agencies should enhance the competitiveness of their products to win more customers.