A focused tourism industry is confident the market is entering a new era, but old problems need to be addressed if it is to reach its full potential

There's an unmistakable sense of optimism in Hong Kong's travel industry. Sure, visitor arrivals last year grew 11.5 per cent over 1998's figures, and arrivals for the first quarter are up 15 per cent over the same period in 1999.

But the optimism goes deeper than the latest arrival figures which have grown mainly because of strong demand from the mainland and Taiwan markets. The industry and government has woken up to the fact that the health of Hong Kong's economy is intertwined with that of the tourism industry. This fact was highlighted by the Asian financial crisis which shook off the cobwebs of complacency within the industry.

"The downturn helped people in the government as well as people in the industry to focus and do things proactively," said Erika Hui (right), assistant commissioner, Tourism Commission. "Most people would agree that we had taken things for granted."

The industry had been riding very high prior to the crisis without much attention from anybody. But in 1997 people started to think seriously about how best to capitalise on Hong Kong's tourism assets. People were also waking up to the fact that the tourism industry is a very important foreign exchange earner, accounting for about 5 per cent of the SAR's GDP. As a result, the Tourism Commission was set up to steer the industry.

"The creation of the Tourism Commission is a very big step forward in my view because instead of just talking shop, instead of just hearing a lot of ideas -- which was what used to happen -- now I think there is a lot of government commitment to proceed with developing certain infrastructure support for tourism. I think that will go a long way in developing Hong Kong in assisting the Hong Kong Tourist Association (HKTA) and the trade to provide the products to attract tourists here," HKTA Chairman Selina Chow (below) said.

The Tourism Commission's Action Programme, "Hong Kong Tourism, Expanding the Horizons," outlines its strategy to develop both the hardware and software side of the industry.

The release of the report is particularly timely, because it gives the industry a clear focus of where it is heading.

"One of the good things that has occurred over the last few years has been a reasonable amount of soul searching within the [tourism] industry, in terms of the way they manage and operate the facilities," said John Ap, associate professor, Department of Hotel & Tourism Management, Hong Kong Polytechnic University.

Besides the lack of a guiding body, another problem facing the industry was: "what is Hong Kong?"

"We have had a bit of a branding problem, because now we are a Chinese city. We are no longer the last stronghold of British colonialism within Asia, within the Orient. So there is that branding problem," Mrs Chow said.

"Having said that, a lot of our assets have remained intact, and we are still number-one in Southeast Asia in terms of visitors that come to us. So what we now need to do is to try and ensure that with this crisis almost over, that we are well positioned and prepared for the millennium."

Despite the lack of a clearly defined brand, Mrs Chow said the Hong Kong brand is known and felt, but has not very effectively been presented in a visual, unified way.

HKTA will maintain its "City of Life" promotion this year, but will be demonstrating more effectively what that life is through images targeting different markets.

"We have the 150 years or so of colonial rule which has left its indelible mark on Hong Kong. On the other hand Hong Kong has kept its Chineseness, and we will try to project that. Every visitor who comes here feels it. I think we need to project that much more to people who are overseas to be excited enough to get that feeling and make a decision to come to Hong Kong," she said.

Rather than targeting specific markets, the HKTA will be doing a global promotion to avoid putting all its eggs in one basket, and also to explore new markets.

Promotion of Hong Kong as a shopping paradise, East meets West, culinary nirvana, etc., will continue, because these are still the top reasons why people visit Hong Kong, she said. But the association aims to pinpoint what different markets want and then target their promotion campaigns accordingly.

For short-haul markets -- Southeast Asia, East Asia, China, and greater China region ? shopping and food are the main draws. Whereas the long-haul ?Europe and North America -- it is more the exotic fusion of East meets West, the quaint backstreets and temples of Hollywood Road that visitors are looking for.

Mrs Chow said she believes Hong Kong's appeal is still as strong as ever, but is aware that the travel industry cannot keep offering the same old products to tourists, especially when about 80 per cent of visitors say they wouldn't mind coming back to Hong Kong.

Mainland China market

Mainland China has emerged as Hong Kong's single largest tourism market. Over 3 million mainlanders, or 28.9 per cent of the total arrivals, visited the SAR last year. The numbers continue to grow by leaps and bounds this year, with 1.53 million visiting the territory in the first five months of 2000, up 16.8 per cent over the same period last year.

The numbers have been growing so fast in fact that the government has increased the daily quota of mainland arrivals from 1,500 to 2,000, and consequentially pushed the annual quota to 730,000.

The Tourism Commission's Erika Hui said her office has been in very close dialogue with the mainland authorities about increasing numbers and they too are very keen to offer whatever cooperation they can.

"So besides increasing the daily quota, they've also allowed flexibility in terms of daily numbers, which means that for certain peak periods there may be a need to have flexibility as long as the annual quota is not affected," she said.

Mainland authorities have also agreed to increase the number of designated tour operators allowed to bring visitors from the mainland to Hong Kong from 4 to 17, which will be implemented very soon, she said.

Though most mainland visitors are not big spenders, spending an average of HK$4,370 per capita last year, one very encouraging sign is that the market is following the same path as that of the Japanese, Chamber-CSI Tourism Committee Chairman James Lu (left) said.

"The China market today is going through the same kind of transition that the Japanese market went through in that the Japanese never used to shop at Louis Vitton, but they do now. So the mainland market should be looked at in the same way as the Japanese market was," he said.

Even today, China's massive potential and the accumulative spending power of its visitors makes the mainland Hong Kong's most valuable market. But while their numbers have grown, so too have complaints from mainland Chinese visitors about shopping tours, in which they would be shuffled around shops where tour operators receive commission on their purchases.

"Generally these tours are quite well conducted, with the exception of a few tourists who end up in rip off shops. Rip off shops are those that are operated by unlicensed operators. These things need to be looked at," Mr Lu said.

HKTA's Mrs Chow said mainland authorities have voiced their concerns about the practice, and Hong Kong is taking action to control the problem, which arose because inbound tour operators are not licensed, unlike the outbound industry.

"Now it is very much recognised by both the trade and government that regulation is needed to upgrade the professional standard of the inbound service. So I think that will go a long long way because if that happens inbound operators will be much more likely to invest here. That is something we really look forward to and we really need it," she said.

Mrs Hui said the commission is working on a draft legislation to introduce a system of regulation of inbound tour operators, which it hopes to get passed in the new Legislative Council session.

The commission will also make it mandatory for inbound operators to have corresponding ground receivers here to receive visitors, and has got the cooperation of mainland authorities to ensure that this regulation will be enforced.

"These sort of operators would have to be members of the Travel Industry Council, which does try to ensure that their members do not engage in improper trading practices," she said.

Quality tourism products

The HKTA's "Be a Good Host" campaign initiated in 1999 will be replaced this year with the "Quality Tourism Services" scheme. "This must be pushed very aggressively, but with a lot of attention to the integrity of the scheme, because the quality of service associated with the scheme would actually come up to scrutiny," Mrs Chow said.

The scheme will initially target retail and restaurant outlets, but will eventually be expanded to more service industries, she said. Under a very stringent set of criteria, participating outlets will be scrutinised to make sure that service is kept up to scratch, which will be achieved through mystery shopper visits. A tourist complaint hotline will also be set up to guarantee quick redress.

Mrs Chow said it is vital that when people look at the scheme they can be guaranteed a certain level of service, and she also hopes the initiative will push service providers towards a higher plane of service.

Hong Kong Polytechnic University's John Ap feels that if Hong Kong has to improve any aspect of the tourism industry, it is the service culture in Hong Kong.

"Research shows mainland tourists and even residents of Hong Kong feel they are being discriminated against. The tourism industry has to be very careful that it doesn't bite the hand that feeds it," he said.

He said that while Hong Kong service is generally efficient and courteous, it lacks a personal touch wherein the service provider understands and is concerned for needs of guests and so anticipates rather than reacts to needs.

"People complain about the service which has been a take-it-or-leave-it attitude. I believe we cannot continue with this attitude," he said. "I'm not referring to the level of service you find in our five-star hotels, but the ordinary restaurants and retail stores. We don't want tourists who come to Hong Kong to say we are surly."

The HKTA's "Be a Good Host" campaign, which with the help of Jackie Chan and Chow Yun-fat encouraged people to extend a warm welcome to visitors, has not had much success, Mr Ap said.

One of the school's postgraduate students conducted a study to measure the effectiveness of the campaign. Half of the people surveyed worked in the travel industry, while half were ordinary residents.

"The student asked whether this [campaign] would change their behaviour to extend courtesy to tourists," he said. "Basically, the results showed it wouldn't. But the study did show there was a high awareness of the advertisements."

For the Quality Tourism Services scheme, he thinks that while it helps to address some of the symptoms of service problems and cheating by identifying companies and organisations that will look after the needs of customers, it doesn't penalise the bad ones.

"While it's good that we have retailers subscribing to this Q-mark system, it does not address the problem of the rotten apple within the crowd and it is these rotten apples that are creating more harm to Hong Kong's reputation. So to me it doesn't fully address the problem and the issue that is being faced," he said.

He feels the answer lies much deeper, in educating the mindset of people, especially those in the service industry, to look at what are the needs of the consumers.

In spite of stories about rudeness, the HKTA's surveys conducted on departing visitors show that 90 per cent of people who leave say they would recommend Hong Kong to someone else or that they would come back, Mrs Chow said.