HK travel in­dus­try must de­velop new growth en­gines

China Daily (Hong Kong) - - COMMENT - ZHOU BA JUN

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.

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