Hong Kong must invest to remain a first-rate tourist draw
B.C. Lo calls for a concerted government effort to expand and upgrade Hong Kong's capacity to cater to tourists because a failure to meet rising demand will put our competitive edge at risk
Hong Kong tourism has enjoyed 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. According to World Travel & Tourism Council estimates, the industry's total contribution (direct and indirect) to Hong Kong's gross domestic product was about 15.2 per cent in 2011, and continued growth is expected.
The numbers demonstrate that our tourism industry is thriving, and they underline the city's edge as a leading tourist destination and an international travel hub. As other countries across the region increasingly lean on travel and tourism to boost their own economies, Hong Kong will continue to face intense competition. In response, we need to take Hong Kong tourism to an even higher level.
According to the world travel council, a total of 463,000 people were employed in the tourism and related industries in 2011, making up 12.8 per cent of total employment. This means one out of every eight workers in Hong Kong depends on travel and tourism for their livelihood.
In 2011, total visitor arrivals were almost six times that of the population of Hong Kong. They spend money that contributes directly to our economic well-being.
Hong Kong has long enjoyed a central, strategic location within four hours' flight time of major cities throughout Asia, from Tokyo to Singapore, and our city is about to become even better connected. Next summer will see the opening of the Sir Norman Foster-designed cruise terminal at Kai Tak. The high-speed rail system will link Hong Kong with 28 major cities on the mainland in 2015, significantly reducing travel times. The opening of the bridge that links the city with Macau and Zhuhai in 2016 will make it even easier for visitors from mainland China - by far our most important tourist market - to access Asia's World City.
These projects will undoubtedly facilitate visitor flow. However, a successful tourism industry also relies on tourist spending. Currently, overnight tourists spend an average of HK$7,333 per trip. Spending is closely correlated with length of stay, but over the past 10 years this has remained stagnant, hovering between 3.3 and 3.6 days per visit.
This is an area where Hong Kong must improve, but our relatively limited tourism infrastructure development is proving to be an obstacle. The challenge is to extend the length of stay of visitors and to cater to their needs once they're here. To maintain Hong Kong's reputation as a world-class tourist destination, a vigorous review into how we can enhance and develop the city's transport network and tourism infrastructure is in order.
For example, many of our world- renowned shopping areas are in close proximity to one another. Much could be done to better utilise areas with more space. The land around Hong Kong International Airport, Hong Kong Disneyland, Sunny Bay and Discovery Bay all have enormous potential for the development of new attractions - not necessarily limited to shopping - outside the current "grid".
Accommodation supply and rates have a direct bearing on the length of stay. In the past 10 years, the number of overseas visitors has increased significantly, from 16.6 million in 2002 to a record high of 41.9 million in 2011, a jump of 152 per cent. Over the same period, the number of hotel rooms in Hong Kong has gone up from 35,450 to some 62,830, or around 77 per cent.
Meanwhile, the occupancy rate has held steady at an average of 89 per cent - with the exception of 2003, when the severe acute respiratory syndrome outbreak brought much of the region to a standstill, and 2009, the first full year of the global financial crisis. Near-full occupancy combined with an expected increase in tourist demand call for urgent measures to provide more accommodation.
Our government and lawmakers should be doing everything they can to nurture the industry, a major pillar of Hong Kong's economy. As the figures for visitor arrivals, length of stay, average spending and hotel occupancy attest, we need to focus on encouraging the expansion of Hong Kong's major attractions and enhancing our tourism services. This also includes tighter integration with Macau and our other neighbours in the Pearl River Delta to form attractive multi-stop itineraries.
If Hong Kong is to remain competitive in the regional tourism sector, these factors need to be considered as Chief Executive Leung Chun-ying prepares for his maiden policy address next week.
Other major Asian cities recognise the importance of travel and tourism, and they are investing substantially to attract visitors. We have already seen keen competition developing in places such as Singapore and Korea. Delaying further investment in our own offerings will serve to benefit other markets at the expense of our own.
Hong Kong's ability to attract more high-spending tourists who stay for longer trips will help secure future economic growth for the next generation. The Hong Kong Association of Amusement Parks and Attractions is working hard to help develop the software powering our tourism industry, by enhancing service standards and fostering talent.
If we are to succeed in an increasingly competitive environment, we are also going to need the hardware, that is, infrastructure that is built to last. We need a long-term tourism development policy that will take us well into the next decade.
B.C. Lo is vice-president of the Hong Kong Association of Amusement Parks and Attractions