Why we should worry about the current trend in HK tourism

January 14, 2019 18:15
Mainland visitors take in the sights at the promenade near Golden Bauhinia Square in Wan Chai.  Our tourism industry has been increasingly relying on mainland visitors as the growth engine. Photo: CNSA

The Hong Kong Brands and Products Expo (HKBPE), which drew to a close on Jan. 7, was a success in terms of the number of shoppers and sales volume. 

The solid figures can be attributed to factors such as the overall revival of the local tourism industry as well as the opening of the Hong Kong-Zhuhai-Macao Bridge and the Hong Kong section of the Guangzhou–Shenzhen–Hong Kong Express Rail Link (XRL). 

According to data from the Hong Kong Tourism Board, visitor arrivals in November last year hit nearly 6 million, up a significant 20.6 percent from the same period in the previous year. 

Meanwhile, the number of mainland visitors to Hong Kong also soared by an impressive 25.8 percent, the highest among all inbound travelers.  

Financial Secretary Paul Chan Mo-po has estimated that the total number of inbound visitors in 2018 could have hit an all-time high. 

However, the significant growth in the number of inbound tourists has failed to reverse a worrying trend with regard to the source of our visitors. 

There are two potential causes for concern behind these impressive numbers. 

First, our tourism industry has been increasingly relying on mainland visitors as the growth engine in recent years. 

For example, in 2012, mainland visitors accounted for 71.8 percent of all inbound tourists to Hong Kong. That percentage jumped to 75.5 percent in 2016, and then to 78.4 percent in the first 11 months of 2018. 

Our over-reliance on mainland tourists means that our tourism sector and other related industries are getting increasingly vulnerable to the economic fluctuations in the mainland as well as the changing consumption patterns of mainland travelers. 

Moreover, as our tourism industry focuses more and more on catering for mainland visitors, Hong Kong’s overall appeal to travelers from other countries is likely to be undermined. This could give rise to a vicious circle under which the growth in the numbers of non-mainland inbound tourists would continue to slow down. 

Second, official figures have also indicated that the proportion of same-day visitor arrivals is continuing to rise. 

The percentage of same-day visitors to Hong Kong rose from 51.1 percent in 2012 to 53.1 percent in 2016, and up further to 55 percent in the first 11 months of 2018. 

As we all know, compared with same-day visitors, overnight visitors are always spending substantially more money on accommodation and food and beverages.  

But according to statistics, the amount of expenditure per capita among overnight visitors to our city has been falling for four consecutive years, down from HK$8,123 in 2013 to just HK$6,443 in 2017. 

Although their spending per capita during the first half of 2018 saw a slight rebound to HK$6,723, it was still at a relatively low level in recent years. 

The continued decline in the proportion and spending power of overnight visitors suggests that Hong Kong’s tourism industry must step up efforts at exploring new sources of high value-added visitors. 

Moreover, it is worth noting that Tung Chung was recently swarmed with same-day mainland visitors. Other residential areas such as Tsuen Wan and To Kwa Wan were also swamped with cheap guided tours from the mainland. 

What is worrying is that the structural problem of our tourism industry is not only showing deteriorating signs but could again be taking a heavy toll on local livelihoods and cross-border relations like it did several years ago. 

As the Lunar New Year long holiday is just around the corner, I believe both the tourism sector and the government must coordinate better in order to defend our city’s reputation as the world capital of hospitality. 

Meanwhile, another urgent task facing our government and the tourism sector is to find out how to facilitate a more “high-quality” and “diversified” growth in our city’s tourism. 

This article appeared in the Hong Kong Economic Journal on Jan 10 

Translation by Alan Lee 

[Chinese version 中文版

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Dr Dennis Ng Wang-pun is the president of the Chinese Manufacturers' Association of Hong Kong