Tianjin resident Wang Xiaomei wiped sweat from her brow as she joined 30 other people queuing outside a luxury fashion and accessory shop in Tsim Sha Tsui on a recent balmy afternoon. 'This is one of the most important activities during my first trip to Hong Kong,' said Ms Wang, the director of a food company who visited the city on the individual traveller scheme. Ms Wang, who planned also to shop at jewellery and cosmetic outlets, said she had a hefty budget for Hong Kong as her friends had asked her to stock up on handbags and health food during her stay. 'I'll keep buying as long as I spot good items. But a lot of the international brands in Hong Kong are familiar to me because I've visited their shops in Beijing and Shanghai,' she said. Tourists such as Ms Wang have been a driving force behind growth in the Hong Kong tourism sector since 2003, when the central government launched the individual traveller scheme. The move helped to revive the city's tourism industry after a heavy blow from the Sars outbreak, which came amid simmering discontent over the government headed by former chief executive Tung Chee-hwa. Even though the number of cities covered by the individual traveller scheme has increased since 2003 from four to 44, tourism experts warn of tougher years ahead as well-heeled mainland tourists head to other cities and overseas. Adding to concern is the rise of Macau, with the glitz of the casino industry attracting hordes of travellers to the boom town on Hong Kong's doorstep. Latest Tourism Board statistics showed that 2.185 million people visited Hong Kong in July, a year-on-year rise of 5.7 per cent. About 55 per cent of these tourists came from the mainland. According to Tourism Board figures, mainland tourists spent an average of HK$4,554 last year for a trip to Hong Kong, up from HK$4,355 in 2004. But those spending figures are under threat, as shoppers such as Ms Wang find other travel destinations on the mainland and beyond. Some local retailers are already feeling the pressure of competition from abroad, saying that recent mainland visitors to Hong Kong were not spending as much as those who came in the previous two years. The retailers attributed the difference in spending to the fact that the first individual travellers came from cities which were better off, such as Shanghai, and now tourists are starting to arrive from second- or third-tier cities. Hang Fung Gold Technology, which operates the 3D Gold jewellery retail chain, plans to slow expansion in Hong Kong, citing a reduction in spending by mainlanders. A company spokesman said average spending in the Hong Kong stores of Hang Fung, famous for creating a gold toilet that holds the record for the world's most expensive lavatory, was between HK$2,000 and HK$3,000 for the year to the end of March, compared with HK$3,000 to HK$4,000 a year ago. Average receipts at its first Macau store, which opened last year, were equivalent to HK$3,000. The company aims to open two stores in Macau this year, but only one more in Hong Kong this year - at Yuen Long. Meanwhile, some Hong Kong retailers have recently admitted that they expanded too quickly as a result of misplaced optimism about forecast visitor numbers to Hong Kong Disneyland, which opened in September last year. The theme park, which had projected 5.6 million visitors for the first year of operation, has admitted it won't reach the target as its anniversary approaches. A spokesman for cosmetic retailer Sa Sa International said it rued a decision to open new stores in key areas last year, which he said was inspired by optimism about Disney. Sa Sa reported an 8.4 per cent fall in full-year net profits. Its recent expansion included new stores in prime areas and staff hiring and training - despite a 4 per cent drop in sales at comparable stores that hurt profit margins. Hang Fung also plans to scale down the expansion of its Gold Tourism Exhibition Hall in Hunghom as the expected flow of tourists on side-visits from Hong Kong Disneyland had fallen short of projections. Experts in tourism said Hong Kong had to stop relying heavily on mainland travellers and that more efforts had to be made to attract regional and overseas visitors. They said competition for every dollar spent by tourists was becoming fierce in the region, with Macau and Singapore making themselves popular destinations for gaming and for exhibition and conference tourism. Las Vegas Sands, the world's largest casino company by market value, last month unveiled a 50 per cent capacity expansion at its Macau casino, making it the world's largest by number of tables. The former Portuguese enclave is also expanding its exhibition tourism segment. The Venetian Macau casino and hotel will officially open a 75,000- square-metre exhibition area next year. Cliff Wallace, the managing director of the Hong Kong Convention and Exhibition Centre, said exhibition space in Macau had the benefit of being connected to affiliated hotel rooms and casinos under the same ownership. It drew people to fill hotel rooms and casinos and, therefore, space could be made available at a much lower rate. In Singapore, Las Vegas Sands is finalising the design of its US$3.6 billion Marina Bay Sands, the city's first casino. Sands will start building the development's three hotel towers, 300-plus meeting rooms and retail arcades later this year, to meet a 2009 deadline. Already a regional hub for trade shows and conferences, Singapore has pledged to spend S$8 billion (HK$39.7 billion) to transform Sentosa into a more popular tourist destination through a revamp schedule, to be completed in 2010. A casino-resort, including a hotel, retail centre and theme park, will be the key attraction. Howard Young, the Legislative Council's tourism industry representative, also warned of tough challenges for the tourism industry. 'We will see diminishing returns on further opening up of [mainland] individual travel, now that the most potential areas are open,' he said. 'The current imbalance [in mainland tourist proportion] is not the result of deliberate distortion of promotion, but the exceeding success of the mainland market where the conditions and potential previously did not exist. 'It's unrealistic to think the phenomenal growth over the past three years will continue as the original base was low.' Joseph Tung Yao-chung, chairman of the Travel Industry Council, said the slowdown in spending by mainlanders was natural because most of the returning tourists did not spend as much as they previously had. Development of the facilities underpinning Hong Kong's tourism industry has been rapid in recent years. Following the opening of Disneyland last year, the tourism sector this year was boosted by the opening of the Hong Kong Wetland Park in Yuen Long - to which the local celebrity crocodile Pui Pui was relocated last month. After months of delays and technical glitches, Lantau's cable car, which serves a 5.7km route between Tung Chung and the Ngong Ping plateau with its giant Buddha statue, is scheduled to open in time for next month's National Day holiday. However, in terms of what analysts refer to as tourism 'software', Hong Kong seems to be sorely lacking. A Reader's Digest survey earlier this year which ranks politeness around the world, listed the city in 25th place out of 35 cities investigated by the magazine. 'The survey had its own cultural bias, but [it] serves as a reminder that tourism is not just hardware - in which we are now quite competitive - but also the quality of software, which includes imbedding the notion to be polite to everyone, including tourists, into the general population's mind,' Mr Young said. Joseph Tung said the lack of gaming development in Hong Kong meant the city was at a disadvantage compared with neighbouring cities. 'Many tourists complained that they had nothing to do at night in Hong Kong,' he said. He added that if a casino was ever built in Hong Kong, its chief purpose had to be complementing other entertainment developments such as shows staged by top international artists. 'Gaming development in Hong Kong should not be like those in Macau, which serve purely for gambling purposes,' Mr Tung said. Ultimately, Mr Young said, Hong Kong's tourism sector could not depend on the mainland. 'We need to ensure adequate promotion in other markets, including the easier Southeast Asia region, and competitive long haul and new markets like the Middle East, India and Russia.'