Jake's View

Ignore tourism's absurd economic boasts

The tourism industry's claim that it supports a huge slice of GDP would be laughable if it didn't drain so much money out of the public purse

PUBLISHED : Tuesday, 15 January, 2013, 12:00am
UPDATED : Tuesday, 15 January, 2013, 4:44am

To maintain Hong Kong's reputation as a world-class destination, a vigorous review into how we can enhance and develop the city's transport network and tourism infrastructure is in order.

B.C. Lo, HK Association of Amusement Parks and Attractions
Insight page, January 12

The tourism lobby is at it again. We feed it hundreds of billions of dollars in tourism projects - Disneyland, high-speed rail, cruise terminal, new airport, convention centre, Macau bridge, and the list goes on and on - and what do we get?

We certainly don't get a return on our money. I've long given up hope that this commercial lobby would act in a commercial manner when pitching for public funds. But do we even get a word of thanks?

No, we do not. What we get is the same old whinge that we always get from the tourism lobby - "It's not enough. Give us more. You owe us. Hurry up."

Let's examine some of the claims that Disneyland's Mr Lo makes about tourism in Hong Kong:

"Another impressive year with visitor arrivals totalling almost 44 million as of last November, a 16 per cent increase over the same period in 2011."

And the entire increase came from the mainland alone. As the chart shows, visitor arrivals from the rest of the world are now actually shrinking. We've had more Russians coming, but arrivals of almost every other nationality are down. This pillar industry rests on the one wobbly leg of the individual mainland visitor scheme.

"The industry's total contribution (direct and indirect) to Hong Kong's gross domestic product was about 15.2 per cent in 2011."

The key word is in the brackets - indirect. It's an old trick. When you want your industry to look more important you stretch its reach. So trucking becomes in part a tourism industry. Trucks supply hotels and hotels are tourism, therefore trucks are tourism, QED.

Fine, but then we can also play the same game for trucks. Tourism is a trucking industry. It supports trucks. I don't mind playing this game but only if we stretch overall GDP as much as we stretch any industry. The tourism lobby won't play along, however. It can't puff up its importance that way.

More significant yet is that any calculation of tourism's contribution to GDP must net out the import cost of the goods we sell tourists, as virtually everything we sell them is imported. Even the services have an import component. Hotel accommodation is a service but we import the steel and cement to build the hotels.

No way does tourism contribute 15.2 per cent of GDP. The real figure is probably in the low single digits.

"According to the world travel council, a total of 463,000 people were employed in the tourism and related industries in 2011."

Note that word "related". We're playing the same game here as with GDP. Mr Lo implies that in the retail, food services, accommodation, arts, recreation and entertainment industries, three out of every four employees serve tourists alone. You may join me in laughing.

Here is a contrasting factoid for you. Hotel employment is actually in decline. The latest figures show there are less than 30,000 hotel employees of all categories. Twenty years ago that employment figure was 37,000.

But just as well. The truth about tourism jobs is that they are almost all menial jobs. Tourism is not a way to move a society up the ladder of prosperity.

It does more to freeze than to promote economic development. It's a rich industry only for poor countries.

And it particularly does little for us when we give the tourism lobby a free hand to dip into the public purse for expensive infrastructure projects that drain the money out of us more than they bring the tourists in.