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The Bulletin - The HKGCC monthly magazine

Speeches from Chamber Events

Feb 99

After the unprecedented boom in tourists arriving before the auspicious date of July 1, 1997, there was a massive drop in numbers of almost two million in the second half of 1997. Hong Kong then faced adverse publicity relating to the treatment of Japanese visitors and the outbreak of the bird flu virus.

Tourist numbers have certainly taken a knock in 1997-98 and are now up only 0.2 per cent compared with the same post-handover doldrums in 1997, according to Ms Amy Chan, Executive Director, Hong Kong Tourist Association.

"Of all our Asian markets, Mainland China and Taiwan were least affected by the economic turmoil. The biggest increase in arrivals for December 1998 is from the Thailand with a growth rate of 63 per cent compared to the same period in 1997. Other notable growth markets for tourist arrivals are Indonesia [47.3 per cent] and Malaysia [29.3 per cent]," she said.

The North Asian region produced the heaviest reversal of fortune. South Korea showed a decline of 49.8 per cent and Japan 30.9 per cent, in 1998 compared to 1997.

"In retrospect we can see that the seeds of misfortune were sown in 1996, when visitor volumes rose more than 40 per cent and Hong Kong became the leading outbound destination for Japanese travelers, ahead of Hawaii for the first time. Both the Japanese travel trade and Hong Kong industry capitalised feverishly on market interest in visiting the colonial territory and collecting a passport 'trophy'. Market pressures prompted premium prices. Inevitably, neither the growth rate nor the premium rates were sustainable beyond June 1997. The negative trend was sharpened by media reports of discriminatory pricing policies within the hotel industry," she said.

In October 1998 the guests staying the longest were from Indonesia (4.5 days) and the length of time they stayed further increased in 1998. The Japanese were the shortest stayers averaging just 2.8 days.

Total tourist spending is down by 29.7 per cent in January to September 1998. Those from North Asia are still the biggest spenders with the Canadians spending more than they did in 1997, as are visitors from the Middle East.

"Visitors from the Middle East are spending more on shopping whilst tourists from the Nordic countries are increasing their spending on entertainment, compared with 1997," she said.

Indians have increased their spending on tours in 1998 while Australians and the Swiss spend the least on tours.

It is not all doom and gloom, recent figures do show signs of a slight recovery. Tourist arrivals in December last year increased by an encouraging 11.1 per cent over the same month in 1997; total arrivals for the month were 936,914.

Worldwide growth in tourism is expected to be sustained well into the next century.

Although it is uncertain as to whether Hong Kong can recover its position as a leading destination, a study by the World Tourism Organisation (WTO) anticipates 1.6 billion worldwide travellers and a tourist dollar value of some US$2,000 billion for the year 2020.

Amid all this predicted growth, the WTO expects that by 2020 China will become the top visitor destination worldwide and Hong Kong will rank fifth in the top ten visitor destinations with close to 60 million visitors that year.

"Hong Kong is best positioned to capitalise on the growth of China tourism acting as a transportation hub to capture both in- and out-bound visitors," she said.

"A shortage of investment capital is seen as a major barrier to growth in tourism throughout the region. Tourism as a sector of economic activity is one that tends to generate relatively conservative returns over longer periods despite the high risks," she said.

In Hong Kong, the investment market and the development industry have little experience in tourism projects. This lack of experience may dampen investment particularly during periods of relative capital scarcity, or when the cost of borrowing is high.

"Another important issue is poor environmental conditions that will eventually lead to disaster for the tourism sector by turning away potential visitors," she said.

Hong Kong is facing challenges on two fronts the price competitiveness of the SAR compared to long-haul markets is gradually disappearing and Hong Kong is losing its price advantage over other cities in Asia.

With anticipated dramatic urban growth, it is important that tourism assets, such as the quality of air, water and landscape are protected.

The HKTA plans to develop North Lantau as a major tourist generator taking advantage of its close proximity to Chek Lap Kok.

"We are actively exploring the possibility of developing a film city that will be the 'Universal Studio of the East' and a theme park on Tsing Yi that will include hotels, a golf course and resort," she said.

In Tung Chung the HKTA is considering designating a site for an aquatic centre for water-based recreation.

"There are also a number of valuable historic assets in Tung Chung New Town such as the Tung Chung Battery and Hau Wong Temple," she said.

The Mass Transit Railway Corporation has also been asked to spearhead the cable car project linking Tung Chung with the giant Buddha at Ngong Ping.

"A cable car link from the airport to one of the world's biggest Buddhas should prove a fascinating attraction," she said.

Tai O, close to Tung Chung, is one of Hong Kong's few remaining unspoiled fishing villages retaining its traditional character and unique stilt houses. The HKTA aims to sympathetically develop this into a major tourist attraction.

The Territorial Development Strategy that was approved by the SAR Government in early 1998 recognises tourism as a sector with long-term opportunities for private-sector investment and job creation.

"This recognition of tourism's importance is a significant breakthrough for the industry," she said.

Central and Western has been selected as an area where existing tourist attractions might be proactively developed and marketed. A study into this possibility will inventory all tourism resources, including attractions, events, facilities and other unique characteristics of the district and will analyse the potential for their enhancement.

The HKTA is also working on a Green Guide to Hong Kong in the hope of attracting eco-tourists.

"The guide will include useful, scientifically-based but non-technical information for visitors and local residents interested in the natural environment," she said.

The guide will encourage users to appreciate and learn about the diversity and richness of Hong Kong's flora and fauna, detailing many of Hong Kong's beautiful trails.