HK travel industry must develop new growth engines
Ocean Park announced on Dec 7 that it registered a HK$240-million loss in the 2015-16 fiscal year. The loss was the most since it began independent operation in 1987 and the first loss since the 2002-03 fiscal year, which came as a result of the SARS (severe acute respiratory syndrome) epidemic. It also said the main reason behind the record loss was a significant drop in the number of mainland visitors. In response to the challenge, Ocean Park plans to raise the admission price next year from day one and open a night entertainment zone to take advantage of the MTR South Island Line.
The travel industry is one of the four economic pillars, accounting for 4.5 percent of Hong Kong’s GDP and employing some 230,000 local residents. In recent years, however, it has faced challenges from three directions.
The top challenge is the decreasing number of mainland tourists. Latest figures released by the government on Dec 8 show arrivals from the mainland fell by 5.4 percent in the first 11 months of this year; the total number of arrivals in November went down only 2.1 percent yearon-year, but those from the mainland dropped by 3.5 percent. Also that day the Hong Kong Tourism Board announced the number of tour groups from the mainland plunged by 40-50 percent in the first 11 months of the year and the trend is continuing.
The second challenge was flawed industry management, mainly reflected in the illegal practice of forced shopping, which even resulted in one tragic death. Local business associations in the travel industry are not capable of trade supervision while self-discipline of travel agencies is sorely lacking.
The third challenge was stiff competition from new attractions on the mainland, such as Hainan Island, where the provincial government offered purchasing tax rebate to tourists, and the newly opened Shanghai Disney Resort theme park.
The SAR government and the travel industry are working hard to head off those challenges. On Nov 22 the Hong Kong Disneyland Resort unveiled a plan to invest HK$10.9 billion in 2018 through 2023 to add a Marvel cinematic universe themed area and a Frozen-themed zone based on the eponymous popular animated movie. On Dec 7 the SAR government unveiled the Travel Industry Bill, which is aimed at establishing the Travel Industry Authority to improve industry regulation and administration. The question is whether these measures will help enhance the competitiveness and appeal of Hong Kong’s travel industry.
The decrease in visitors from the mainland in recent years can be blamed to a certain degree on hostility toward them, but mostly on the fact that Hong Kong’s competitiveness in tourism is fading. Hong Kong as a tourist destination has never been widely known for its natural wonders or historical relics. What attracts visitors the most is affordable shopping and related consumer experience born of a unique free port. Sightseeing spots have been few and far between, includ- The author is a senior research fellow of China Everbright Holdings.
As international trade and tourism expand with globalization, even duty-free shopping has become less attractive to many people because they now have more options in the region.”
ing the Peak on Hong Kong Island and the giant bronze Buddha on Lantau Island. First-timers from the mainland may be interested in visiting the Disneyland theme park and Ocean Park, but shopping will always be their top priority in Hong Kong — the nearest “shoppers’ paradise” they can access more than once a year.
However, as international trade and tourism expand with globalization, even duty-free shopping has become less attractive to many people because they now have more options in the region. Hong Kong may still hold the upper hand in affordability and variety for hoarders but is no match to its Southeast Asian competitors in terms of natural attractions and exotic fun. As for the two world-class theme parks, the Hong Kong Disneyland Resort now has the newer, larger and expanding Shanghai version to contend with, while Ocean Park has even more competitors on the mainland (as close by as Guangzhou).
Back when most people on the mainland could not afford to travel overseas, Hong Kong was their first or even the only choice outside the mainland as a tourist destination. Now those days are gone as more and more mainlanders have the financial means to go and see other countries on other continents, which is why more and more foreign countries are wooing mainland people however they can as their guests. Hong Kong can no longer depend on existing attractions to compete with the rest of the world.
Hong Kong Disneyland’s expansion plan will take years to materialize if it gets Legislative Council approval at all; while Ocean Park’s planned admission hike may prove suicidal. As for the SAR government, a truly innovative solution to rejuvenate the travel industry with new attractions remains to be found. Without new attractions any plan to build more hotels and other tourist facilities will only exacerbate woes caused by dwindling arrivals. We must “think outside the box” in search of new ideas, but they have to be uniquely Hong Kong.