Lead the way

PUBLISHED : Saturday, 04 June, 2011, 12:00am
UPDATED : Saturday, 04 June, 2011, 12:00am


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Accounting for 3.3 per cent of Hong Kong's gross domestic product and providing some 190,000 jobs, not to mention spurring growth in related sectors, tourism is one of the pillars of our economy. Marred by a spate of ugly episodes involving mainland visitors, the industry needs more than just a new coat of paint. It needs some drastic refurbishment.

Last month, in response, the government finally launched its consultation process for the review of the operation and regulatory framework of the sector. Four proposals are on the table. First, retain the existing two-tier regulatory model, but add more non-trade members to the Travel Industry Council's board of directors, making it more broadly representative of the community.

Second, transfer some of its regulatory functions, including the processing of appeals, to an independent committee. Third, establish an independent statutory body to replace the existing council to perform its oversight functions. Fourth, a total takeover by the government of its regulatory regime.

Options one and two are similar in that they both preserve the self-regulatory functions of the industry. Options three and four both lean towards regulatory control by an independent body, leaving the council with nothing more than its status as a trade organisation.

Predictably, these proposals have made industry leaders squirm, even before the public has time to react. Travel Industry Council chairman Michael Wu Siu-ieng believes that a review does not have to end in the dismantling of the council. He points to the fact that there has been a significant drop in the number of complaints by mainland visitors in recent months. To him, drastic reform is bureaucratic overkill.

On the other side of the debate, James Tien Pei-chun, chairman of the Tourism Board, is against keeping the self-policing set-up. If no reform is forthcoming, the problem-plagued industry may eventually self-destruct. He sees no choice but to go with either option three or four.

I lean towards this view. James Tien is, of course, my brother. But this is not a case of blood being thicker than water; rather, the logic for self-policing is insupportably thin. But I differ from my brother in that I am firmly in favour of option four, for the simple reason that the third option opens up a can of worms with the potential for heavy political lobbying by trade people on the ratio of insiders to outsiders in the composition of the independent body, and who gets to chair it.

In deciding the merits of each proposal, we are mindful of history. In the past, the council has introduced many measures and issued many directives to redeem the reputation of the tourism industry, but they have all fallen short. Piecemeal changes and minor tinkering no longer suffice. The public's patience is also wearing thin. Things have got so bad that the National Tourism Administration has issued its first-ever travel advisory against Hong Kong's service quality. This tarnishes our otherwise squeaky-clean image. The industry needs to be overhauled.

In its consultation paper, the government seems to neutrally point out the relative merits and drawbacks of each option. What I do not understand is why it chooses to characterise the first option as having the merit of 'being simple and easy to understand'.

That hardly matters if the option itself is ineffectual or otherwise fails to restore our reputation as a 'shoppers' paradise'. Maybe it is 'simple' in the sense that the bureaucrats will not have to do much.

Options three and four entail amending the relevant ordinance. In fact, with option four - since it calls for the government to assume regulatory control - getting the amendments through the legislature alone could take up to 21/2 years.

There has been persistent public demand for the government to do what other economies have done in terms of regulating the tourism sector. Both the mainland and Macau have established their own tourism authority and bureaucracy. This government has chosen to drag its feet until the public forces its hand. Now that the review process is under way, it should refrain from calling legislative changes a 'time-consuming exercise'.

I think the stars are perfectly aligned for the government to make a move. On this issue at least, the public is fully behind our officials. Industry self-regulation is not a viable option. We cannot allow an industry that is steeped in a subculture of 'you scratch my back and I'll scratch yours' to muddle through its problems.

The argument goes that outsiders should not poke their noses into a trade of which they have little knowledge. But this argument has no legs. After all, the licences for all eateries are issued by the Food and Environmental Hygiene Department, karaoke licences are handled by the Home Affairs Department, and licences for private homes for the aged are processed by the Social Welfare Department, none of them significantly staffed by industry insiders. But their regulatory regimes have worked well. The trick is to learn by doing, guided by those with industry background and experience.

Once you get to the nitty-gritty of creating an arm of bureaucracy to police this growing industry, you are unavoidably talking about what it would cost to re-burnish the Hong Kong brand. Believe it or not, by the government's estimate, we are talking about adding only HK$12 million to the annual operating budget. With 190,000 jobs at stake and Hong Kong's reputation as a desired destination on the line, that is a tiny investment with a huge return.

Michael Tien Puk-sun is vice-chairman of the New People's Party and chairman of the international garment retailer G2000