21 October 2016
Hong Kong needs to rework its tourism policies as locals increasingly resent being crowded out by mainland visitors. Photo: Bloomberg
Hong Kong needs to rework its tourism policies as locals increasingly resent being crowded out by mainland visitors. Photo: Bloomberg

HK must focus on high-end tourists, not overall numbers

Hong Kong has seen a series of demonstrations recently against mainland tourists, with some protests even turning violent.

There has been widespread criticism of the increasingly ferocious xenophobic actions. I, too, hope that the protesters would exercise restraint so that we can preserve our international image.

However, that doesn’t mean we should turn a blind eye to the growing discontent among local citizens over the issue of mainland visitors. Indeed such discontent has intensified and become a social phenomenon, which, if not addressed properly, might turn into yet another wave of even more violent protests.

The crisis has come about as our society has been swamped by hundreds of thousands of visitors to such an extent that the daily lives of our fellow citizens have been disrupted. Now, it’s time our government stepped forward to address this urgent issue and introduce substantial measures to resolve the current conflicts between locals and mainland visitors before things spin out of control.

At present, most discussions have mainly focused on how to root out cross-border parallel trading activities, but I think it just isn’t simply enough, because parallel traders are only part of the problem. In fact what irritates Hong Kong people most is the soaring number of tourists.

In 2014 a total of 60.8 million tourists visited Hong Kong, almost 8.4 times our local population. Compared to 2004, the tourists were up nearly 179 percent. It doesn’t take an expert to figure out that it’s way too many visitors for a city that only has a land area of only 1,100 sq km.

According to the “Assessment Report on Hong Kong’s Capacity to Receive Tourists” released in 2013, the number of foreign tourists visiting Hong Kong is likely to hit 70 million in 2017, and 100 million in 2023.

I believe rise of visitor numbers cannot continue indefinitely, as there is limit to our capacity. Therefore, the government must review the direction of growth and development of our tourism sector thoroughly.

Some have suggested that the government review the policies of Individual Visit Scheme and the multiple-entry permits. I agree that the abolition of the multiple-entry permits is a step forward in the right direction.

However, since the power of issuing the multiple-entry permits rests with the Shenzhen authorities, any policy shift will certainly require a bilateral agreement and coordinated efforts between Hong Kong and Shenzhen, which are unlikely to materialize in the short run.

Despite that, however, there are still some handier ways for the administration to curb the increasing number of tourists and focus more on high-end travelers.

Last year I had proposed the imposition of arrival tax on inbound tourists as a means to broaden our tax base and to establish a new source of stable revenue. For example, we can charge every tourist HK$50, which would be peanuts for tourists staying overnight.

Last year a tourist who stayed overnight in the city spent an average of HK$7,975, so an arrival tax of HK$50 would have only made up 0.63 percent of their total expenditure.

However, an arrival tax will prove a potent weapon against parallel traders who enter Hong Kong multiple times per day, as this will significantly increase their operation cost. The introduction of an arrival tax can help us focus more on the high-end segment of tourism and change the spending pattern of foreign tourists.

Meanwhile, the revenue generated from the tax can be used to improve our infrastructure and community facilities.

The WTO put forward the concept of “sustainable tourism” back in 2004, under which tourism must not only meet economic, social and aesthetic demands, but also be able to help preserve local tradition and natural environment.

I think the administration should take this set of standards seriously in order to strike a better balance between the continued development of tourism and public interests.

In conclusion, given the scarcity of our resources, Hong Kong should stay focused on attracting more high-end travelers rather than measure the success of our tourism purely by the number of visitors.

This article appeared in the Hong Kong Economic Journal on April 1.

Translation by Alan Lee

[Chinese version 中文版]

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Member of Legislative Council (Functional Constituency – Accountancy)

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