Hong Kong’s tourism industry must be able to adapt

The three-day Labour Day “golden week” saw surprising figures, with the number of travellers up on last year, although most came as individuals rather than in tour groups

PUBLISHED : Saturday, 07 May, 2016, 12:47am
UPDATED : Saturday, 07 May, 2016, 12:47am

Public holidays on the mainland are a good indicator of the state of Hong Kong’s tourism industry. With 80 per cent of visitors being mainlanders, breaks such as the recent three-day Labour Day “golden week” offer insight into the effectiveness of policies and promotions. The vacation gleaned surprising figures, with the number of travellers up on the same time last year, although the majority came as individuals rather than in tour groups, and then largely on day trips that meant a drop in hotel occupancy rates. More data is needed to reach meaningful conclusions, but a clear message is the need to be adaptable to trends.

The US dollar peg makes Hong Kong’s retail sector vulnerable to the whims of shoppers; a recent decline in value against other currencies could partly explain the 7.1 per cent year-on-year rise in mainland visitor numbers during the holiday. So far this year, figures are up 2.5 per cent. But a three-day break also limits travel plans, which makes our city favourable for day trips, especially for those living in Guangdong province.

Tour groups have long been the lifeblood of the hotel sector, ensuring room occupancy rates as high as 90 per cent. This Labour Day, though, numbers more than halved despite discounts and special packages.

One reason for a decline could be the negative publicity from forced shopping excursions. But Hong Kong is also a compact city with an excellent public transport system, a perfect fit for visitors with their own itinerary or mainland tourists who have become seasoned travellers. Technology has also brought alternatives to hotels through websites like Airbnb, especially popular among the young and budget-conscious.

Tourism is one of our four pillar industries, accounting for almost 5 per cent of GDP and about 7 per cent of employment. But as much as tourism-related industries would like visitor numbers to be on a constant upward swing, arrivals are determined by economic conditions, mainland policies, attractions and, in recent years, public sentiment.

Responding to growing anger against districts crowded by mainland shoppers, particularly parallel traders, the government last year won Beijing’s support to end multi-entry visas for Shenzhen residents.

Chief Executive Leung Chun-ying said this week there were no plans to relax or drop the restriction, which limits visits to one a month.