Hong Kong Budget 2017-2018

Help for Hong Kong tourism on the way in Paul Chan’s first budget

F inance chief to waive licence fees and pump cash into promotions as visitor numbers tumble

PUBLISHED : Tuesday, 21 February, 2017, 11:43pm
UPDATED : Thursday, 23 February, 2017, 10:54am

Financial Secretary Paul Chan Mo-po is expected to waive licence fees for travel agencies, hotels and restaurants and grant extra funding for Hong Kong’s tourism promotion body when he delivers his first budget on Wednesday.

The measures are expected to cushion the persisting downturn affecting the sector, with the Tourism Board predicting visitor arrivals will drop 2.2 per cent this year.

They are among a package of incentives to be unveiled by the new financial chief in the budget, including a salaries tax rebate, funds for free kindergarten education and initiatives to promote innovation and technology, the Post has learned.

Having taken on his role just one month before the budget announcement, Chan’s approach to tourism will be “more along traditional lines”, a person familiar with the plans told the Post, including offering subsidies to the Tourism Board.

The tourism promotion body has secured a total of HK$480 million from the government so far this year, including recurrent funding of HK$328 million, an additional HK$82 million handed out in the chief executive’s policy address, and a special fund of HK$70 million designated for organising celebratory events for the 20th anniversary of the city’s handover to China.

Most of the funds will be used to promote the city’s image on the mainland and in overseas markets, and to organise large-scale events such as the Dine and Wine Festival, according to the board’s report.

Travel Industry Council chairman Jason Wong Chun-tat welcomed the potential licence waivers.

“It will definitely help the industry if such measures can be implemented,” he said.

Similar licence fee waivers have been on offer since 2014 as a way to boost the industry in the wake of the 79-day Occupy pro-democracy protests.

Last year the government unveiled a short-term relief package for the industry costing HK$140 million, including waivers for licence fees for a year for 1,800 travel agents, 2,000 hotels and guesthouses and 27,000 restaurants.

Watch: Why the Hong Kong government has so much money saved up

Wong said the council had made a series of requests when its representatives met government officials earlier this year, including licence fee waivers, to help companies reduce their operational costs.

Other suggestions included government-led initiatives to upgrade the business models of tourism operators and get them using the internet more.

“There is no way tourist numbers will rebound to the level we used to see,” Wong said. “The government should assist industry players to transform if it has enough surplus.”

The beleaguered sector might have to endure another year of poor sales before it bottoms out however.

Tourism Board chairman Peter Lam Kin-ngok predicted a decline of 2.2 per cent in visitor numbers this year, following the 4.5 per cent drop the industry experienced in 2016.

He said unfavourable currency movements and lingering adverse effects from the tightening of visa regulations for Shenzhen permanent residents would rein in the sector’s recovery.

The comments come despite a noted improvement in numbers for December, which saw 5.4 per cent more travellers visiting the city, fanning hopes the industry may have finally put the worst behind it.

“[The 2.2 per cent decline] is an indication to us that the tourism industry is getting better, but the general environment in 2017 is still very challenging,” the board’s executive director, Anthony Lau Chun-hon, said.