A Marketing Strategy to Improve Tourism in Hong Kong - Case Study Example

A Marketing Strategy to Improve Tourism in Hong Kong Executive summary Hong Kong has been the most desired tourist destination all over Asia-Pacific region (Reiber 2011; HKTB 2012). As one of the administrative arms of the larger People’s Republic of China, in terms of tourism industry among others, it is a distinct state with its own economic system to cater for. The economic growth of Hong Kong relies majorly on tourism. Hong Kong displays a modern urban setting; there are no rural settings. For this, the major attraction phenomena are cultural and monumental attractions, events and festivals, arts and performances, culture and heritage, great and luxurious outdoors, tours and walks, and cruise (HKTB 2012). In terms of tourism, Hong Kong is in league with other tourist destinations in the Asia-Pacific region. These include Japan, Macau, Taiwan, Singapore and China mainland among many others (Lew 2003). This study focuses on the main external competitors, Macau and Singapore and seeks to market Hong Kong as the leading tourist destination. The aim is to increase the number of tourists in Hong Kong by 10% in the next six years. Hong Kong’s Tourism Board (HKTB) the main Destination Marketing Organisation (DMO) that is bestowed this task (Hong Kong Tourism Board (HKTB] 2012). One main challenge is the limited funding (Moore & Pareek 2010; Vanhove 2011) to the HKTB for the required marketing undertakings. While Macau has been stricken by severe acute respiratory distress syndrome (SARS), an opportunity to meet the stipulated goal opens up. However, we need to market Hong Kong as the second option for the previously Macau-bound tourists (Coltman 2000). To this effect, the main challenge is the lack of new and enough aircraft capacity to meet the implied high market demand. The main marketing strategy will be to expand the attraction features and tourist reservation utilities (Cathy 2005), using the cheapest marketing option say social networks (Coltman 2000), and seek liaison with a reliable aircraft network mainly the Fly Emirates to meet the market demand. Table of Contents Executive summary 1 Mission Statement 3 Background Information 3 External Analysis 4 PEST Analysis 4 Hong Kong’s political landscape 4 Economic analysis of Hong Kong 4 Social traits of Hong Kong 5 Technological availability in Hong Kong 5 Competitor analysis 5 Internal Analysis 6 SWOT Analysis 6 Weaknesses 6 Constraints 7 Market Segmentation and Positioning 7 Goals and Objectives 8 Action Plan 9 Conclusion 10 References 12 Mission Statement The mission of the HKTB is to market Hong Kong as a world class tourist destination among other Asian competitors (HKTB 2012). However, establishing a healthy competition strategy is the best way (Lumsdom 1997). This will help to build long lasting conditions (Lumsdom 1997) on HKTB’s part. One of the main strategies is to heighten the competitive advantage (Lumsdom 1997) of Hong Kong as a tourist destination by offering as many as possible tourist options (Lumsdom 1997), increase the tourist holding capacity in Hong Kong and employ the best yet feasible marketing strategy. There is a chance to seize the opportunity that has opened up what with Macau’s infestation with SARS. For HKTB, it is very likely that originally Macau-bound tourists will shift ways to other tourist destinations around (Laws 1991). This is why displaying Hong Kong as the second best option at the present, as a marketing effort, promises to yield good results. 10% increase of the number of tourists in Hong Kong sets the hypothesis of this marketing plan but expectations are that even more tourists will turn in for Hong Kong’s offers (HKTB 2012). However, while the short term aim is to convert Macau’s disadvantage to Hong Kong’s advantage, the long term goal is to convince tourists that Hong Kong remains a leading tourist destination globally and maintain the new tourist influx as high as possible. This marketing plan explores various feasible options that will work with strict budgetary allocations for various undertakings and, at its best, serves to offer HKTB with a strategy that will help in achieving its present goals. Background Information While tourism in Hong Kong remains the backbone of her economy, tourism performance has been the main focus of her tourism board. Records for 2009, 2010 and 2011 indicate tourist arrivals as 29 591 000; 36 030 000 and 41 921 000 tourists respectively which indicates a rising trend that need to be sustained at all costs. Out of this, tourists from nearby markets (short-haul markets) carry the day almost doubling the number of tourists received from far markets (long-haul markets). Similarly, tourists’ length of stay (LOS) has been, on average, 3.2 nights in 2009 that rose to 3.6 nights for both 2010 and 2011. Tourists’ satisfaction in Hong Kong has scored and maintained 8.3 pt/10 pt over the three years for the various purposes of their tours and this suggests high resilience and perfection of tourism in Hong Kong. As visitor per capita spending has recorded a rising trend over the three years (that is, 5770, 6728 and 7333 HK$ respectively), there will be a need to maintain supply of tourist attractions to maintain and/or increase visitor’s willing to spend. For the above statistics, the bottom line remains that tourism in Hong Kong is growing and requires adequate funding for maintenance of high ratings and too, developing Hong Kong’s tourism sector even further (HKTB, 2012). External Analysis PEST Analysis Hong Kong’s political landscape The only political tension is between the leadership between Hong Kong and China mainland (Yeung 2011). This has nothing to do with the tourism sector in Hong Kong as little is expected in terms of inter-state conflicts. Hong Kong has experienced long periods of political stability and therefore there will be little or no statutory barriers as far as tourism in Hong Kong is concerned. The economic spectrum analysis of Hong Kong calls for tourism as the leading economic builder (Yeung 2011). The administration of Hong Kong therefore delights at any increase in tourists and the main strategy (Yeung 2011), through HKTB remains to woo as many tourists as possible to visit Hong Kong (HKTB 2012). As a matter of fact, HKTB is an object of the Hong Kong administration that is funded to improve the Hong Kong tourism sector in terms of the number of incoming tourists and of course, monetary accruals in the long run. Economic analysis of Hong Kong Hong Kong ranks number one in terms of economic freedom both regionally and globally (Hong Kong 2012). This means that Hong Kong may be the most preferred tourist destination especially when it comes to international business merchants. With zero tolerance to economically retrogressing factors such as corruption and piracy, plus visibly healthy and working international relations (Hong Kong 2012), the tourism sector never becomes biased while portraying Hong Kong as an all-round safe tourist destination. Already, Hong Kong is a renowned tourist destination at world class rankings (HKTB 2012; Hong Kong 2012). This follows as a result of high economic ability of Hong Kong to transform various phenomena from unsightly to tourist captivating level (TripAdvisor 2012). Examples are numerous world class hotels, multi-brand shopping malls, leisure activity amenities and site-seeing travels (TripAdvisor 2012). Tourism is the leading economic development tool for Hong Kong and therefore it is a sound effort to market (Laws 1991) Hong Kong as a tourist destination for different cultures worldwide. Social traits of Hong Kong Hong Kong differs a great mile in terms of cultural values, beliefs and justice from most other Asian countries including China mainland (Lew 2003). With a population of about 7 million, Hong Kong has no definite and limiting cultural values like do other countries in the region. An example is the existence and freedom of many different religions such as Christianity, Taoism, Islam and Buddhism (Curtin 2012). Generally, however, Hong Kong may be termed as mainly a secular society (Curtin 2012). At any one time, the Hong Kong population comprises of different international visitors (Curtin 2012) mainly as trade merchants, family tourists and other excursionists. This has gradually eroded out the traditions of the people of Hong Kong (who are mainly of Chinese descent) and the society, in general, has learned to appreciate differing external cultural values of the visitors (Curtin 2012). Indeed, most of tourist reservations are in a form that accommodates any tourist from any corner of the world (Curtin 2012; TripAdvisor 2012). Technological availability in Hong Kong Hong Kong is one of the World’s most developed states (Lew 2003; Reiber 2011). In terms of technology, Hong Kong has been able to provide a wide variety of services for its urban lifestyle. Hong Kong administration has been highly sensitive to matters concerning technological availability as most of the functional sectors and departments rely on the aid of the technology (Innovation and Technology Commission [ITC] 2012). An example in the establishment of the Hong Kong Science and Technology Parks Corporation (HKSTPC) in May 2001 to offer one-stop infrastructural support services to technology-based companies and activities (ITC 2012). This has helped Hong Kong to outshine surrounding countries in this context. For tourism, many tourists are likely to appreciate a destination with high quality and/or reliable technology infrastructure for convenience matters (Laws 1991), which Hong Kong already has (Reiber 2011). Competitor analysis Macau, a close competitor of Hong Kong in terms of tourism, offers a wide variety of tourist option. Like Singapore (Oakley & Brown 2009), Macau offers gambling as a complement of tourists’ options which Hong Kong has not done so far (Reiber 2011). This is a challenge for HKTB especially with little funding of the organization by the Hong Kong’s development panellists. Most of Singapore-bound tourists, which is far off Hong Kong’s coast, will not likely be affected by this marketing plan in the short run. However, in the long run, this marketing plan’s strategy may prove a cutting edge in convincing most tourists in the world to visit Hong Kong (HKTB 2012). Despite the high competitiveness of Macau, the current SARS attacks open up an opportunity for HKTB to gain more tourists who will shift ways in fear of the disease in question. The main challenge is to offer services Macau’s tourists are interested in (Howie 2003). The long term aim is to retain as many tourists as possible (Howie 2003) before Macau recovers from SARS shock, but in a healthy competitive strategy (Lumsdom 1997). Internal Analysis SWOT Analysis Strengths The competitive advantage of Hong Kong can be counted on: the number of tourist services a Hong Kong offers currently; the already built reputation of Hong Kong in terms of tourism destination, tranquil social status, little or no political barriers, leading economic freedom at both at regional and international level and high technological resources; and the disadvantage of the immediate competitor, Macau. Practically, Hong Kong has been able to offer tourist options such as attractive sites, events and festivals, arts and performances, culture and heritage, great and luxurious outdoors, tours and walks, and cruise. The opportunity to gather additional tourists is wide open what with SARS terror in the neighbouring Macau, a major competitor of concern to Hong Kong in the Asia-Pacific region in terms of tourism. Weaknesses The major weakness on HKTB part is the lack of the required financial support from Hong Kong’s government for this quest. High financial resources are required especially by HKTB for various marketing undertakings like expansion of tourist destination in terms of numbers, marketing of Hong Kong in the external environment as a tourism one-stop destination and expanding other necessary channels of operation. If the required financial support was provided, the conditional hypothesis of this study is that this marketing plan would be even more successful. However, it is often important to learn to work with limited budgetary allocations at times (Vanhove 2011). Therefore, this marketing plan suggests strategies that will enhance working with limited financial resources (Moore & Pareek 2010) by integrating some of the strengths realized as regards HKTB and Hong Kong in general. For this quest, no threats are likely to appear if Singapore and Macau remains the main focus and control objects. Constraints Apart from limited financial support, the other weakness of HKTB is the lack of the required new aircraft to accommodate the expected additional tourists. Coincidentally, there are no financial resources enough to fill this gap. The failure of the government to offer financial support is not an enough reason to bar the efforts (Vanhove 2011) suggested by this marketing plan either. Therefore, an option of seeking liaison (Vanhove 2011) with the most reliable aircraft body and preferably operating at international levels is consulted later in this study. Market Segmentation and Positioning While the prime objective is to seize the opportunity offered by SARS strike on Macau and the charming business tours in Singapore (Oakley & Brown 2009), major concern will be diverted to what options they offer. Gambling options are not achievable what with the limited finances. However, in the long run, the private sector may be coaxed to offer such options with a promissory (Palmer 1995) redirecting of interested tourists. Examples are private hotel and restaurants merchants (Clarke 2001). For HKTB, key interest is on the family outdoor excursionists, businessmen and honeymooners. Family outdoor excursionists may be directed to the onshore spaces and shopping malls. With limited financial base, local private holdings will be wooed to expand services and if possible cover brands and tastes of Macau. Able and hospitable tourist receptor centres will be encouraged on an arranged agreement basis to redirect various family tourists and other enthusiasts to these new areas. The advantage of family tourists is that a large number of visitors per season can be expected (Clarke 2001). Encouraging local shopping malls to import tourist-interest brands found in Macau, though a long term turn up is expected, will be another activity. While the number of tourists is expected to rise, official website of HKTB will be updated daily if need be to display real tourist options in Hong Kong (HKTB 2012). The HKTB will, as its major marketing campaign, continue with the usual ‘Discover HK’ slogan fed with cookies that link the tourists to the new options in the hopefully expanding Hong Kong tourist attractions window. This is rather a cheaper and affordable strategy (Howie 2003). The constraints of low travel capacity to Hong Kong displayed by HKTB will be countered by seeking a mutually benefitting conviction to the Fly Emirates Limited. The Fly Emirates is an international reliable aircraft network. If there is promised increase in Hong Kong-bound tourists, it will be easy for HKTB to convince the Fly Emirates to partner or rather cooperate with HKTB by increasing to and fro air travels in Hong Kong. There will be an agreement thereof that the Fly Emirates will advertise (Palmer 1995) Hong Kong-bound travels by including Hong Kong’s new reputation as a tourist destination for family outdoor excursionists and businessmen for shopping and trade corridors respectively. This will be practically essential for both long term and short term goals and objectives. HKTB expects to expand the spectrum of services that are likely to captivate family campers and businessmen among others. They key expansion strategy will be to convince private caterers to expand their scope of services and space to accommodate greater number of tourists (Howie 2003; HKTB 2012). This will include a mutually confided trust that each stakeholder interested in the said role play will accrue substantial and equitable benefits (Palmer 1995; Howie 2003) from the plan. This will call for mutual cooperation between HKTB and interested aspirants, that means, extra tourists that HKTB will receive will be redirected to various private reservation quarters as stipulated above. Hopefully, an enough conviction will be derived to include travel agencies that are reliable as the current needs press. Goals and Objectives For this marketing plan, the primary target is to attain and maintain an increase of at least 10% in the number of tourists flowing into Hong Kong per season in the next six years. Within this new marketing plan, goals take to forms; long term and short term goals. Long term goals include: obtaining and maintaining a relatively higher competitive advantage in terms of tourism industry by targeting emerging and previously untapped consumer base; and establishing long term partnership with Fly Emirates and private tourist carers to meet the presumably outraging demands by the hypothesized increase in number of received tourists. In a ripple effect, the expansion of consumer options, in this context, will be expected to trigger a new image of Hong Kong in the emerging markets merely by providing better and diverse services. Long term markets expected include Mainland China, USA, United Kingdom, Canada, Taiwan, Japan, South Korea, Singapore, The Philippines, Malaysia, Indonesia, Thailand, Germany, France and emerging markets such as India, Russia, The Middle East, Vietnam and The Netherlands (Lew 2003). Short term goal is to seize the opportunity offered by the SARS stricken Macau; initially Macau-bound tourists will be convinced that Hong Kong remains the next option and perhaps be permanently persuaded. With limited funds, HKTB will woo interested private stakeholders into the struggle with promised benefits (Palmer 1995; Hall and Lew 2009). Action Plan To achieve the set goals in time, a breakdown of activities by HKTB will be as follows; Date Action 28th September, 2012 Writing and sending of detailed proposals to various private investors willing to cooperate in the plan. This will enhance realization of actual number of willing potential stakeholders. Additional information of this option will be also communicated via HKTB official website (Doolin 2002). Also HKTB will divert attention of its social networks (specifically Facebook and Twitter) to addressing this quest – the breakdown of information on social networks will be as hereunder. 13th November, 2012 Conducting a special meeting with the interested private investors to raise agreements on terms of operation (Palmer 1995) and suggesting the speed of the progress. This will involve agreeing on particular deadlines and scheduling of events such as next meetings. 18th December, 2012 Meeting to finalize terms of agreement and launch the quest. The private sector will be convince to advertise their own operational sites (Doolin 2002) as tourist destination as sponsored by HKTB in the operational agreement. Plans to meet with the Fly Emirates will be underway. 4th January, 2013 Meeting with the Fly Emirates to convince its management of the new effort. This will include laying out terms of agreement. Schedule intended events progress. Agreement to add flights from closer Asia and North America to Europe on probation basis will be made. While the primary target remains Macau, all the potential marketing stakeholders suggested above will be lured to focus on convincing Macau-bound tourists to visit Hong Kong. 17th January, 2013 Following a successful agreement with Fly Emirates, a marketing campaign ‘Discover HK’ will be launched with special efforts to lure tourists from USA, Canada and Asian countries will be launched both at HKTB’s website, the Fly Emirates premises in these markets. Local private carers could also be coaxed to advertise various brands that satisfy tourists from the named markets locally, on their websites and if possible, in target countries. 28th February, 2013 Provisional of additional flight service from closer Asia and North America to Hong Kong. Meanwhile, advertisements of Hong Kong as the leading destination and providing additional list of services will be conducted by means of HKTB official website, the Fly Emirates and local investors as previously agreed. The launching of the new flight service will also be done. 26th March, 2013 Based on the results from the previous Emirates offer, other agreements will be made. 30th March 2013 Launching marketing campaigns for potential Europe-Hong Kong tourists. 15th July, 2013 Launching additional flight service by Emirates: from Europe. 30th July 2013 Launching marketing campaigns for tourists from lower Pacific and Middle East regions 19th September 2013 Additional flight service from lower Pacific and Middle East regions simultaneously. 29th December, 2013 Performing audit of the overall plan (Cathy 2005). This will include performance of the plan, possible problems and privileges in the process (Doolin 2002). It is expected that the Hong Kong government will provide necessary budgetary allocation for HKTB in the next financial year which, together with the accrued benefits, will be used to fix any realized hitches (Hall and Lew 2009). Other audits will be conducted later. Conclusion Hong Kong has been portrayed as one of the leading tourist destinations. With the highest score in economic freedom globally, relatively stable political landscape, great technological infrastructure and well cultivated social ethics and justice, there is a room for improvement (Vanhove 2011). The aim of this marketing plan is to increase Hong Kong’s tourists’ influx by 10% in the next six years corridor through efforts by Hong Kong Tourism Board as the leading Destination Marketing Organization in Hong Kong. The conducted PEST (external) analysis indicates that with required resources (Moore & Pareek 2010) for this quest, the goals explained above are highly achievable. To assist this, there is an opportunity to lure initially Macau-bound tourists to visit Hong Kong instead, following a tourist-terrifying outbreak of SARS in Macau. The SWOT (internal) analysis indicates major weaknesses as lack of the capacity, in terms of new aircraft, to serve the expected increase in Hong Kong-bound tourists. At the same time, Hong Kong’s leading DMO, the HKTB has not been sufficiently funded for such a quest. Therefore, this paper has presented options for a long term marketing strategy that, if conducted well, will lead to achievement of said goals with minimal financial requirements (Moore & Pareek 2010). While the main aim is to increase the family outdoor excursionists and businessmen, the marketing plan will provide extra facilitation of the tourists (Coltman 2000) by seeking liaison with local private yet reliable tourist caterers. There are, as a result of the above discussed strategies, high hopes that tourists will respond positively. The inherent Hong Kong’s good international relations, development and already built up resource base as regards tourism and the rising tourism enthusiasm (Cathy 2005) are the motivating factors. References Cathy, C.H. 2005. Global Tourism Higher Education: Past, Present and Future. 5th Vol. NY: Haworth Hospitality Press. Pp.6-22. Clarke, J. 2001. Marketing in travel and tourism. Oxford, UK: Butterworth-Heinemann Ltd. pp.5-36. Coltman, M.M. 2000. Tourism marketing. NY: Van Nostrand Reinhold. Pp.46-62. Curtins. 2012. Ethics, Equity and Social Justice. Hong Kong’s Sensitive Cultural notes, pp2-5. Doolin, B. 2002. Evaluating the use of the Web for tourism marketing: a case study from New Zealand. Elsevier, 23: 5, pp.557-61. Hall, C.M. and Lew, A.A. 2009. Understanding and Managing Tourism Impacts: an Integrated Approach. NY: Routledge. Pp.21-37. Hong Kong Tourism Board (HKTB). 2012. E-news: Hong Kong, Asia’s World City. Accessed http://www.discoverhongkong.com/nz/see-do/index.jsp 06/09/2012. Hong Kong. 2012. 2012 Index of Economic Freedom. Accessed http://www.heritage.org/index/pdf/2012/countries/hongkong.pdf 07/09/2012. Howie, F. 2003. Managing the Tourist Destination. London: Thomson Learning. Pp.97-123. Innovation and Technology Commission (ITC). 2012. Hong Kong’s Innovation and Technology: The Facts. Hong Kong: Information Services Department, Hong Kong Special Administrative Region Government. Pp.1-4. Laws, E. 1991. Tourism marketing: service and quality management perspectives. UK: Stanley Thornes Ltd. pp.103-24. Lew, A.A. 2003. Tourism in China. NY: Haworth Hospitality Press. Pp.28-41. Lumsdom, L. 1997. Tourism marketing. UK: International Thompson Business Press. pp. 19-41. Moore, K. and Pareek, N. 2010. Marketing: the Basics. 2nd ed. NY: Routledge. Pp.22-39. Oakley, M. and Brown, J.S. 2009. Singapore. 8th ed. Singapore: Lonely Planet. Pp.13-69. Palmer, A. 1995. Tourism destination marketing alliances. Annals of tourism research, 22: 3, pp.616-29. Reiber, B. 2011. Frommer’s Hong Kong. 11th Ed. New Jersey: John Wiley and Sons. Pp.122-38. TripAdvisor. 2012. Hong Kong Tourism. Accessed http://www.tripadvisor.in/Tourism-g294217-Hong_Kong-Vacations.html 06/09/2012. Vanhove, N. 2011. The Economics of Tourism Destinations. 2nd ed. USA: Elsevier Ltd. pp.33-61. Yeung, C. 2011. Political Changes Cloud the Future. Hong Kong Economic Journal, pp.1-5. Read More