Tourism in Hong Kong

Tourism in Hong Kong
ntroduction: tourism is one of the major economic pillars of Hong Kong: the most popular city destination in Asia. The Hong Kong government has spent a big sum of money to strengthen the tourism image of Hong Kong. Methodology: In this coursework, I will investigate whether tourism is indeed a major economic pillar of Hong Kong and if Hong Kong needs tourism. I will use many resources such as: books (Hong Kong Year Book), internet (mostly information and data that was published by the Hong Kong Tourism Board, Hong Kong Tourism Commission), questionnaire (conduct a questionnaire in popular tourism districts to gather information from tourists and locals). [image] Introduction to Hong KongTourism Board: The Hong Kong Tourism Board (hktb) is established to promote Hong Kongas a tourist destination. If Hong Kong attracts a lot of tourist, the big spending of the tourists will contribute to the Hong Kong economy. hktb often uses new strategies to attract tourist to Hong Kong, especially in those sectors that can bring the highest yield in terms of visitor spending.
To endeavour to increase the contribution of tourism to Hong Kong
To promote Hong Kong globally as a leading international city
in Asia and a world class tourist destination
[image]To promote the improvement of facilities for visitors
[image]To support the Government in community promotion on the
importance of tourism
To support, as appropriate, the activities of persons providing
services for visitors to Hong Kong
[image]Make recommendations to and advise the Chief Executive of the
Hong Kong Special Administrative Region in relation to any measures
which may be taken to further any of the foregoing matters
Introduction to Hong KongTourism Commission: [image] Much like the hktb, it?s job is to enhance our tourism facilities, and support the development of new attractions and events, so that Hong Kong remains a premier tourist destination. Hong Kongin General Hong Kong has a bustling economy highly dependent on international trade. It is one of the world?s freest economies, as well as the world?s 10th largest trading entity and 11th largest banking center. Natural resources are limited, and food and raw materials must be imported. Hong Kong has extensive trade and investment ties with the People?s Republic of China, even before its reunification with China on July 1, 1997. The tertiary industry represented 86.5% of the gdp in 2001. Therefore, tourism must be needed in order to bring economical growth to Hong Kong since tourism is such a major section of the tertiary industry. As mentioned above, Hong Kong has extensive trade and investment ties with China. Majority of the tourists who visits Hong Kong are mainlanders. This is due to the recent implementation of the Individual Visit Scheme by China. Individual Visit Scheme The economy suffered dramatically upon the impact of the sars outbreak, which led to a drastic downfall on tourist visiting Hong Kong, business makings and trading. However, it was backed by a strong rebound in visitors arrivals from the Mainland, especially after the launch of the Individual Visit Scheme in late July of 2003. The surge in visitor arrivals from the Mainland soared from 2.36 million to 6.83 million, making the Mainland the largest source market.Visitor arrivals in 2002 rose to 16.57 million, representing an increase of 20.7 per cent over 2001. This growth was driven by a substantial increase in Mainland visitors as a result of a number of measures to facilitate entry for tour groups and business travelers. The number of Mainland visitors increased spectacularly by 53.4 per cent to 6.83 million. To maintain the high number of Mainland visitors, Hong Kong must maintain its status as Asia?s World City. To accommodate mainlanders, many shops in Hong Kong allow mainlanders to use rmb [China?s currency] to purchase goods and services instead of needing to exchange it into hkd [Hong Kong Dollar]. This will enable mainlanders to have an easy experience while shopping in Hong Kong. Also, [in appendix] there are 3 maps of Ocean Park, one of them is in Simplified Chinese [the official language of China], this is to accommodate Mainland tourists. Current Attractions Attractions that Hong Kong already has to lure tourists from all over the world to come to Hong Kong are: The Peak is a mountain in the South-West of Hong Kong Island. It attracts around sex million every year because of its great sightseeing destination. From there you can see Hong Kong Island and the Kowloon Peninsula. On The Peak, there is a Peak Tower, which lets tourists go and purchase some native Hong Kong goods. There is also an attraction in the Peak Tower, which is ?Ripley?s Believe It or Not!?. [image] [image] There are so many attractions that it is difficult to list them all out. Basically just going any shopping district in Hong Kong such as Wanchai, Causeway Bay, will let tourists experience what Hong Kong culture is like. What has Hong Kongdone to enhance the tourism image? hktb has done many things to enhance the image of Hong Kong as a great tourist destination. During these few years, Hong Kong has done many things to attract tourists from all over the world. For example: the numbers of large-scale fireworks have increased a lot (Chinese New Year, Chinese National Day, S.A.R. Establishment Day). In the past, there was only one large-scale firework in several years. Quality Tourism Services Scheme ? 2003 April In today?s competitive environment, successful businesses must not only establish high standards to retain customers, but also communicate this quality to attract new clientele. The Quality Tourism Services (qts) Scheme, organized by the Hong Kong Tourism Board (hktb), provides an effective and efficient method for achieving both objectives. A qts [Quality Tourism Service] sign stating that your shop/restaurant is recognized by the hktb, which in turn will attract customers, both local and from abroad, searching for shops and restaurants they can trust. [image] Global Tourism Revival Campaign ? 2003 June On 23rd June 2003, hktb implemented the Global Tourism Revival Campaign (gtrc). This campaign was put into operation immediately upon Hong Kong?s delisting as a sars affected area by World Health Organization. The main objective was to attract visitors through irresistible travel offers and take initiatives to maximize their spending. Through various special welcoming activities, tourists who visited Hong Kong would pass on positive words of Hong Kong?s hospitality overseas, so generating continued arrivals growth. Also, series of mega-events will happen in Hong Kong so that it?ll reinforce Hong Kong?s tourism image and keep Hong Kong in the international spotlight. Key Points mentioned in the Progress Report on the gtrc include: ü 5 video news reels released to 368 stations in 69 countries ü 93 events confirmed between June and December 2003, expected to attract 200,000 international delegates. ü 26 international ship calls confirmed in Hong Kong for 2004 and 2006 ü 100,000 hotel room nights sold under the ?Be Our Guest? promotion ü This graph and table is taken from the Progress Report on the Global Tourism Revival Campaign [number in millions on graph] 6 new tours with appeal to individual travelers developed and added to regular tour portfolio ü Over 800,000 attendees at the first two mega-events [image] During April ? June, the tourist arrivals are at its lowest point. However, since the delisting by who, hktb immediately implemented its plans. As you can see, there is a great growth in total arrivals to Hong Kong during June ? August period. The total number of arrivals in August even surpasses the total arrivals in January [before the sars crisis]. During this period, Jackie Chan, a long-time Hong Kong Tourism Ambassador and international film celebrity, plays host in the television commercial and invites visitors worldwide to come to Hong Kong to enjoy the unique and memorable experiences the city has to offer. [image]Hong Kong ? Live it, Love it! Global Premiere of hktb Advertising Campaign ? 2003 September Mega Events Phase One of gtrc (23 June ? 15 September) ? Look at Appendix [Progress Report on the Global Tourism Revival Campaign [pg 2,9] for more information Global Advertising Campaign (September 2003 onwards) ? [pg 10 of progress report] Future Developments There are many tourist attractions in Hong Kong. Places such as Victoria Harbour, Wong Tai Sin Temple, The Peak, and many more. Hong Kong is recognized by its great beauty of Victoria Harbour. Hong Kong government is undergoing enhancements on existing attractions. For example: [extracted from] ?Stanleyis one of the most popular visitor attractions in Hong Kong. To make it a more attractive place and to enrich the quality of the experience for both the local community and visitors, we are carrying out the StanleyWaterfront Improvement Project." [image]Overall, hktb has done many things to boost Hong Kong?s image as a tourism district and also set up many things to improve tourist?s experience. [image] [image] Disneyland The most anticipated Disneyland project [which opens in 2005] is expected to create 18400 ? 35800 jobs over a 20 year period. Also, it is predicted that it?ll bring 5.2 million visitors and gradually reach to 10 million per year. Nearly all employees at Hong Kong Disneyland will be Hong Kong people, therefore can help reduce unemployment rate in Hong Kong. [image] List of current projects to enhance image of Hong Kong It is also estimated that additional spending by tourists will amount to $8.3 billion in Year 1, rising to $16.8 billion per annum in Year 20 and beyond ? from Disneyland. Some more details on future developments: [image]AsiaWorld-Expo Offering more than 70,000 square metres of rental space, Asia World-Expo creates a dynamic new option for conventions, exhibitions, meetings and events. The complex consists of 10 halls, eight of which are interconnected, featuring over 66,000 square metres of ground level, column-free exhibition hall space. A 10,880-square-metre multipurpose hall can hold 13,500 people making it ideal for large events. Located beside the Hong KongInternationalAirportand on an Mass Transit Railway line, the facility will be easily accessible and demonstrates once again why so many event planners choose Hong Kong. Completion date: December 2005 [image]Tsim Sha Tsui Beautification ? Waterfront Promenade The popular Tsim Sha Tsui waterfront will receive a facelift turning it into an even more attractive, visitor friendly gathering place. Visitors will surely love the waterfront?s stunning new appearance and enjoy the acclaimed VictoriaHarbourand skyline of Hong KongIslandin an enhanced enironment. Completion date: In phases from 2004 to 2008 [image]Observation Wheel A giant 75-metre-tall observation wheel on top of the 38-metre-high Ocean Terminal Extension building will provide a new way to enjoy the unique and incredible Hong Kongskyline and harbour. This signature attraction will provide stunning views with its 32 self-rotating capsules each carrying 12 people. Target completion date: 2008 [image] ?Mega events planned through early 2004 include an international musical fireworks competition in October, Hong Kong WinterFest from November to early January and the International Chinese New Year Night Parade early next year. Another major programme is the pre-launch of Avenue of Stars (a Hollywood-style walk to fame) in March 2004 to cater to visitors? interest in Hong Kongmovies. That?s not all. Visitors and residents are being tempted to spend more. A Hong KongSuper Draw, featuring prizes worth over HK $15 million, is up for grabs for those who splurge in select outlets till September 31." ? Extracted from The Hindu, Online edition of India?s National Newspaper Evidence of advertising, countries outside Hong Kong gets information on what is happening in Hong Kong to attract tourists. [Online news extract] What does tourism bring to the society? Money Flow [image] [image] The circular flow of income and spending illustrates the linkages between different sectors of the macro-economy. In the left diagram, it illustrates the Money Flow. The firms pay households for producing and the households use the income to consume goods and services. The left diagram is the basic picture, but in reality [right diagram] households do not spend all their income on goods and services, some is saved up. This is an example of Withdrawal. Not all the income returns to the firm [like the left diagram], some are saved, used to pay taxes and imports. Still looking at the right diagram, the taxes paid by the firms and households are used by the government ? Government Spending/Expenditure. This is an example of Injection. Injections are addition income to firms which does not normally arise from the expenditure of households e.g. changes in investment, government spending or exports. Tourist expenditures on goods and services are export spending. As seen in the right diagram, export spending flows back to the firms [injection]. Tourists spending are on goods and services such as hotels, sightseeing, native products, etc. Therefore, if Hong Kong attracts a lot of tourists, causing an increase in export spending, more money will flow to the firms and demand will increase. Firms will then need to increase their output to meet the rising demand. To increase their output, they might employ more people or employ skilled workers, who will evidently request for higher income. This will increase the amount of money to flow back to the households, so they can spend more money. The cycle is restarted. The export [tourist spending] will be used for consuming a good/service, then that good/service?s firm will use the money received on other goods and services, and so on, causing the Multiplier Effect on the national income which is many times more than the initial one. Production Possibility Frontier Under the field of macroeconomics, the production possibility frontier (ppf) represents the point at which an economy is most efficiently producing its goods and services, and therefore allocating its resources in the best way possible. If the economy is not producing quantities indicated by the ppf, resources are being managed inefficiently, and the production of society will dwindle. The production possibility frontier shows there are limits to production, so an economy, to achieve efficiency, must decide what combination of goods and services can be produced. The better the tourism system, which results in more tourists coming, would cause more injection so firms will receive more money. As a result, they would have more money to put in practical uses, so it?ll shift the ppt [Production Possibility Frontier] outwards. [image] This means that the firm will be able to produce more. Although it doesn?t secure that the firm will use its resources effectively, but the production possibility frontier shows there are limits to production, so by shifting the curve outwards, it means the limit is also moved outwards [so the firm can produce more of the goods/services until it reaches the limit]. The limit can only be reached if the firm allocates its resources most efficiently. However, injections apply not to only one firm, but all that are directly linked to tourism. Also, with the multiplier effect, it doesn?t only benefit the firms that are directly linked, even the indirectly ones are benefiting from it. So as a result, the society?s ppf will shift outwards. This indicates that the whole society will be able to produce more goods and services, in other words, the standards of living will rise. Tourism Satellite Account [image] This Tourism Satellite Account illustrates what sectors the tourism contributes. According to the World Travel & Tourism Council 2004 Hong Kong Travel & Tourism Economic Research, the travel and tourism will generate 78,043 jobs and 2.0% to gdp (hkd 25.8 billion) [in the sectors that tourism affects directly]. However, tourism, as seen in the Tourism Satellite Account, touches all sectors of the economy, therefore its real impact is even greater. If including the sectors tourism indirectly affects, the total number of jobs creating is 292,759 jobs and 12.4% gdp (hkd 162.8). Also, as more tourists come to Hong Kong and consuming goods, the demand for Hong Kong currency will increase, as seen in the supply and demand diagram, the demand curve shifts right, causing a rise in price. Balance of Payment The benefit of having a rise in price of the currency is that it?ll help balance of payment [payments and receipts between one country and all the other countries it trades with.]. If the price of the currency is increased, it means that Hong Kong is able to import same amount of goods/services using less money. Therefore, Hong Kong wouldn?t need to use as much money to import the same amount, while assuming the export stays the same, so in the long term [if more and more people continue to come to Hong Kong], export> import [money-wise]. Tourism can also enhance Hong Kong?s image. If Hong Kong can attract lots of tourists, not only tourists will come, even business people will come to Hong Kong and invest. Considering Hong Kong?s location, a city which is only around 4 hours flight away from about half the world?s population, is a prime location for business people to use Hong Kong as a place for exchange and attempt to enter Asian market. With a good tourism background, Hong Kong can create trust and people will not hesitate to come to Hong Kong to do business since Hong Kong is such a successful city (if Hong Kong has a good tourism image and good location). [image] General advantages of Tourism
Creates jobs [directly and indirectly]
Help balance of payments
Can increase currency value
Attract people to make investments in Hong Kong
Hong KongAirport However, tourism doesn?t only give positive externalities. It also gives negative externalities. Pollution is one of them. An example of this is the construction of Chek Lap Kok Airport (Hong Kong International Airport). The construction obviously created a lot of pollution. To build the airport site, they formed land reclamations, which damaged the ecology of the surround marine life. Noise and Air pollution affected people who lived on Lantau Island. A lot vegetation was removed in order to create more free space for the construction. The airport will also increase air travel, causing more planes to fly from one place to another, as a result, world pollution will increase. Garbage Tourism also brings garbage. Evidently, the more visitors come to Hong Kong, more rubbish will be produced. Although majority of the rubbish are not because of tourists, they do still contribute. These pollution and wastes not only affect us as a society, but also ruins the image of Hong Kong as a tourist destination. Would you want to come to a city filled with pollution and wastes? Clearly, it repels tourists. Negative Externalities produced by Individual Visit Scheme Recently, the individual visit scheme enabled people from Mainland China to enter Hong Kong without any restrictions. This caused many problems. Many people come to Hong Kong to work illegally, jobs such as construction workers is a popular choice. This affects our unemployment rate, because Mainlanders come to Hong Kongand take our jobs illegally. Another problem caused by the individual visit scheme [as said in a rthk TV show recently] is that Mainlanders come to Hong Kong and give birth in Hong Kong hospitals. This will turn the baby into a Hong Kong citizen. A sudden surge of demand for medical workers [creating a shortage of medical workers] would make the health system in Hong Kong poor. Since there are so many people from the Mainland coming to Hong Kong to give birth, that means birth rates of Hong Kong increases [since those babies are still considered Hong Kong citizen]. With so many new births, the Hong Kong government doesn?t know whether they would stay in Hong Kong and take education [if they do, education system will suffer as well with the sudden surge]. Increased tourism brings traffic congestions as well. Since many tourists come in groups and not individually, they would use travel buses. A large number of travel buses would cause heavy traffic congestions, causing problems to Hong Kong people who use the transport system to go to one place to another. This may cause disruptions to people?s work and lives. Inflation One of the main problems of tourism might cause is inflation. As the tourists coming increases, the more they need to consume and thus, demand rises and prices rise on goods and services. If inflation happens, the people with jobs will request for higher income/wages. Although employers might increase the income/wages of some skilled workers, they would most probably sack some of the workers, as a result, potentially causing unemployment. However, according to the statistics provided by the government [], [image] As you can see, the prices continue to drop and rise and drop [inflations and deflations]. However, according to the graph below this one [Implicit price deflator of gdp -The implicit price deflator of gdp, as an overall measure of inflation in the economy] all of the values are negative, meaning the overall market is deflating. a 1566 wo [image] Although deflation brings good points, it causes some problems. Deflation will cause people to save up and invest instead of spending it on goods and services. [image][image] Nevertheless, according to these two graphs on the previous page, which also was obtained from the Hong Kong government?s websites, there is an overall rise in consumption [graph on left] compared to the years before. Looking at the graph on the right, which shows retail sales, you can clearly see that there is a rise retail sales compared to the years before, even though deflation is happening [according to the ?Implicit price deflator of gdp? graph on the previous page]. Questionnaire Results and Analysis: I carried out a questionnaire in the Peak and Stanley (both popular tourist districts). A total of 50 people [19 locals and 31 tourists] took part. Not 100% of the people who participated in this questionnaire are tourists. With some locals taking part in this questionnaire could also obtain some of the local?s views on the overall Hong Kong tourism. [See questionnaire in Appendix] Do you think the shop keepers are fluent in the English language? 80% of the people who I surveyed as said Hong Kong people can communicate well in English. This is crucial for Hong Kong to have a good hospitality image internationally. Since 80% thinks most of the shopkeepers are good /acceptable at speaking English, the hospitality image of Hong Kong is good, and hopefully the tourists will spread a good word about Hong Kong, bringing more tourists to here. Do you think Hong Kong is Asia?s WorldCity, or City of Life? 80% above said they agree that Hong Kong is ?City of Life?. This is good because if they think Hong Kong is Asia?s World City, they would recommend Hong Kong as a tourists destination. Therefore, more tourists would come and help improve the economy. What do you think the price of goods and services in Hong Kongare? Majority say the prices in Hong Kong are either well priced or cheap. Since the consumption of goods and services determine whether the consumer is willing and able to consume it, so if they say its well priced or cheap indicates that they are not just willing, but also able to consume it. Therefore, tourist spending will be increased, so injecting more to the economy. [image] What is the best way to promote tourism in Hong Kong? More attractions and advertising are the popular choices. This proves Hong Kong government and hktb has done extensive research because the government is doing a lot on increasing tourist attractions (e.g. wetland park, Disney Land). hktb is still undergoing a lot of advertising in many countries [released to 368 stations in 69 countries ? Progress report on the gtrc pg 3] This shows the government?s and HKTB?s efforts are very successful. [image] How many times or how often do you come to HK? Assuming that the 19 others are from the permanent residents,47% of the people have came to Hong Kong more than once. Although they might not be coming here just for sight seeing, but they will still be injecting to the Hong Kong economy, by spending on goods and services provided in Hong Kong. [image] My Opinions- In my opinion, I think tourism provides great economic advantages for Hong Kong. Thus, Hong Kong government and hktb has put a lot of effort and money on enhancing Hong Kong?s image and promote Hong Kong as Asia?s World City, in other words promoting Hong Kong as a tourist destination. Hong Kong is a place which survives on tertiary industries, therefore tourism is vital for the economic development of Hong Kong. With upcoming tourist attractions like Disney Land, Hong Kong will continue advancing towards a real Asia?s World City. However, for Hong Kong to continue improving, the government must be careful how it allocates its resources and what to do with them. The government must not [or at least at the minimum] of damaging the environment and must keep a close eye on the health system to prevent any epidemic such as sars to cause severe damage on the image of Hong Kong. Conclusion To conclude, Hong Kong needs Tourism to survive. Tourism brings many benefits to the economy as a whole. Through the multiplier effect, the outcome is many times of the initial injection. Since tourism benefits about all parts of the economy [directly and indirectly], it definitely contributes to the standards of living. With tourism contributing 12.4% of our gdp and creating around 292,759 jobs, it must be an asset Hong Kong could not look lightly upon. However, there are many international competitions such as Beijing and Shanghai. China has concentrated in improving the image of Beijing [especially for the 2008 Beijing Olympics] and Shanghai, therefore attracting tourists to there. This will have a great impact on Hong Kong as a tourist destination. Since the price of goods and services in China are relatively cheaper than Hong Kong, so more people will prefer to go to Beijing and/or Shanghai. This will cause a shift in demand curve to the left because the demand of Hong Kong as a tourist destination has decreased. In order to keep the demand for Hong Kong as a tourist destination constant or even shift the demand curve to the right, Hong Kong must keep its good image as Asia?s World City and an Events Capital of Asia to attract more tourists to visit Hong Kong.

Tourism in Hong Kong 7.5 of 10 on the basis of 3227 Review.