Tourism: A period of high investment and rapid change
By Victor Mallet
Published: September 19 2005 16:53 | Last updated: September 19 2005 16:53
 Hong Kong’s tourism industry – one of the service sectors that has powered the economy since low-cost mainland China lured away most of the territory’s manufacturing – has entered a period of high investment and rapid change.
For the past two years, the number of mainland Chinese visitors has risen sharply to reach more than half the total, partly because Beijing now allows residents of 34 mainland cities to visit Hong Kong without being obliged to join a group tour.
Chinese travellers, richer than most of their compatriots, are not the low-spending visitors that the country’s modest average income would suggest. Each overnight Chinese visitor spends almost as much in Hong Kong as Americans or Europeans, and the day-trippers who come to shop spend far more than other nationalities.
Even so, the Hong Kong government is anxious to encourage trips by international visitors as well as Chinese tourists to maintain what Selina Chow, who chairs the Hong Kong Tourism Board, calls a “balanced portfolio”. This means selling Hong Kong’s attractions to Australians, Europeans and Americans, as well as to wealthier inhabitants of emerging markets such as India.
“Hong Kong has not lost its attractiveness at all to the international tourists,” says Eva Cheng, commissioner for tourism. “But the mix has changed. This is truly where the East meets the West.”
Even the outbreak of severe acute respiratory syndrome (Sars), the virus that spread to Hong Kong from the mainland in 2003, caused only a 6 per cent dip in visitor arrivals to 15.5m in that year. Since then, tourism has grown rapidly.
Numbers rose 40 per cent to a record 21.8m last year, are expected to reach 23m this year and could hit 27m in 2006 – compared to a resident population of only 6.9m. According to government figures, total tourism spending last year was HK$92bn.
“Hong Kong – not only the government but also the whole community – is now more focused on tourism,” says Ms Cheng. “The community now believes that tourism is very important to the economy.”
A crucial part of Hong Kong’s strategy is to send the message that the city is not just an exciting and efficient place for business visitors, but also a destination for families.
The new Disneyland, which is majority-owned by the government, opened last week on Lantau island as the new flagship of the family-friendly policy. “Up to that point, people around the world have looked at Hong Kong as a business city,” says the tourist board’s Ms Chow.
The government has committed HK$22bn to the project, but it expects it to generate economic benefits of HK$148bn over 40 years. In its first full year, Disneyland is projected to attract 5m visitors, including 1.4m new tourists.
Another government goal is to broaden Hong Kong’s appeal by marketing its hitherto neglected cultural and natural assets and encouraging “ecotourism”, an aim encapsulated in the marketing slogan for next year: “Discover Hong Kong”.
Important projects include the Hong Kong Wetland Park in the northwest of the territory and a cable car ride to the giant Buddha on Lantau; both are due to open early next year. The government is also considering a plan to develop the existing Ocean Park theme park on the south side of Hong Kong island.
“We would like to reposition Hong Kong, emphasising not just our traditional strengths in shopping and dining, but also in the family market,” says Ms Cheng.
There will be constraints on Hong Kong’s growing tourism industry, not least the worsening smog coming over the border from the factories, power stations and vehicles in neighbouring Guangdong province.
On many days, for example, the views from the top of the Lantau cable car will be obscured by air pollution, although Ms Chow says feedback from tourists suggests they are less concerned by the problem than Hong Kong residents.
The government’s investments in new attractions – equivalent to $4bn over the past few years – are undoubtedly helping to draw in more visitors, but critics say the government has a poor record on planning and may end up drawing in more tourists that the infrastructure can handle.
A particular problem is the harbour front. The harbour, its size already much reduced by land reclamation, lies at the heart of Hong Kong but is already disfigured by motorways and tower blocks and has few facilities for pedestrians.
“They think that tourism brings a lot of money,” says Christine Loh, who heads the think tank Civic Exchange and fears a spiral of over-development.
“But what Hong Kong refuses to consider even is that there might be a limit to the carrying capacity. In Hong Kong we’ve never had the shock of thinking we have limits. So we fill up the harbour, so there can be car park spaces and bus parks, so that we can take the tourists to see the ever-diminishing harbour.”
However, Hong Kong businesses, which have traditionally paid scant attention to environmental concerns, are beginning to wake up to the need to beautify the city.
“The harbour is a tremendous tourism opportunity,” says Andrew Thomson, chief executive of the Business Environment Council. “The harbour can be made a much more valuable resource for tourism than it is today.
“I think we’re at the start of a very exciting 20 years for Hong Kong’s development and for tourism development. We just need to make sure that we plan it right and implement it in the proper way.” | 
