'THE new airport seems to be the answer for our prayers but it is not the case,' says Thomas Axmacher, chairman of the Hong Kong Hotels Association in trying to dispel the illusion that the new airport will allow huge numbers of visitors into the territory. Indeed, a more likely answer will be the early completion of the second runway. However, the question of how many more visitors will be brought in by the new airport has to be resolved first. According to the Provisional Airport Authority, Chek Lap Kok will have an annual passenger capacity of 35 million, compared with 25 million at Kai Tak. This contradicts Mr Axmacher's conclusion that the new airport will not be able to handle a far greater number, based on the assumption that the number of take-offs and landings will be limited by a single runway. The key to increasing the capacity rests with extended operating hours at the new airport, which will provide round-the-clock service. That leads to another question: how many airlines will be willing to fly in at odd hours. Mr Axmacher's answer was negative as airlines would be unable to sell those time slots because passengers would lose out on two fronts. Not only would they lose half a day by the time they settled themselves in town, they would also have to pay for the brief hotel accommodation. It can be argued that cargo flights can be rescheduled to the odd hours, freeing up the time slots during the day for passengers. Again Mr Axmacher disputes that, saying not all cargo flights can be rescheduled as they will be constrained by the flight schedules at other parts of the world. How many more visitors can be flown into Hong Kong at the new airport remains to be seen as the scheduling of flights has to be worked out. In any case, the industry may not have significant growth in occupancy with the opening of the new airport because of the near capacity of hotels. But the growth in earnings will be quite heartening because of the tight supply of rooms. The constraint at the Kai Tak airport have cost Hong Kong $5.6 billion in tourism receipts a year, according to Government figures late last year. But if the problem is solved, can the territory accommodate the vast inflow of visitors? Assuming the new airport operating at full capacity and the same ratio of visitors among passengers, Hong Kong would have four million more visitors in 1998 over last year. The hotel industry is now operating at 80 per cent level of occupancy, which is expected to be pushed to the 90 per cent level. A significant amount of fresh supply will not come about until 1999 when Hopewell Holdings completes its 2,400-room Mega Tower Hotel. The new airport will be accompanied by 10 new hotels with 9,750 rooms at the airport site or along the airport railway, which are expected to become operational at the turn of the century. A research report shows the number of visitors can reach 17 million by 2004, assuming it maintains its market share. To meet this growth, Hong Kong will need a net gain of 16,500 rooms by 2004, assuming the industry runs at 90 per cent occupancy. The question then falls back on the issue of hotel development. The Government has heeded the advice of the hotel industry to relax the plot ratios for hotel developments to a maximum 15 times the site area as for other commercial developments. But the industry argues the accompanying decision to remove the concessions to exclude the basement and engineering plant rooms from the calculation of the plot ratio will not make hotel developments more attractive than previously. Until and unless there is corresponding growth in hotel room inventory, the extra visitors brought in by the second runway will only hurt the industry in the long run. This is more possible as the limited hotel room supply would increase occupancy and subsequently room rates. The high room rates have long been hailed by industry watchers as the reason for lower-than-expected growth in tourist arrivals and shorter stays. If that is so, the second runway will not help the industry much given the consistently high room rates and limited supply of rooms. Perhaps the new airport may not handle as many visitors as the hotel industry would have hoped. It nonetheless represents an improvement which will ensure a long-term steady growth in the industry.