Tourism as an Important Contributor to the Hong Kong Economy - Essay Example

? TOURISM INDIVIDUAL REPORT Executive Summary Tourism has grown to be a crucial industry for the of Hong Kong. The Government in conjunction with other stakeholders have worked hand in hand to ensure that Hong Kong maintains it competitive edge as one of the leading tourist destinations in the world. This has been achieved through upgrading its service standards and quality, easement of visitor’s entry, and having tourist’s attractions that are multi-faceted. Despite this measures, the prosperity of Hong Kong as a tourist’s destination has not reached the desired level to become the leading destination in the world. This means a lot more has to be done in different areas to achieve this dream. This report is going to analyze the economic, social and political contexts in the development of Hong Kong as a tourist destination, evaluate and come up with recommendations as to the future opportunities and challenges facing Hong Kong. The report will include the manner in which Hong Kong has responded to impacts of the named development factors and the policies in has put in place. Table of Context 1. Introduction ........................................................................................................4 2. Literature Review................................................................................................7 3. SWOT Analysis .................................................................................................10 a. Strengths and Weaknesses…………………………………………………..10 b. Challenges and Opportunities………………………………………….…….11 4. Future of Hong Kong...........................................................................................13 5. Conclusion............................................................................................................14 1. Introduction Over the years, tourism has remained an important contributor of the Hong Kong economy. The sharp increase in the number of tourists visiting Hong Kong was witnessed after the Individual Visit Scheme (IVS) introduction in the year 2003. The total expenditure on tourism was approximated to be about $117.3 billion in the 2006 financial year. The overall visitors flocking into the city was over 36 million in 2010. Of this number, long-haul arrivals were approximated to be 4.8 million and mainland arrivals to be 8.2 million. The destination has witnessed a string growth when it comes to the number of visitors from the Mainland as well as both the short and long-haul markets which have doubled over the years. The long-haul visitors mainly come from Africa, Europe, and the Middle East making Hong Kong the leading performing market. Hong Kong has been facing stiff competition from Macau and other Mainland cities and the Hong Kong Tourism Board has reacted to this by working close with the trade and authorities to ensure that Hong Kong remains a multi-itineraries destination. It intraregional tourism has witnessed a rapid increase over the years as it has been receiving more regional short-haul tourists. In addition, the rapprochement between China and Taiwan as well as the China’s economy that has been booming over the years have led to desirable changes in the visitor’s arrivals composition to the destination. However, the political environment and the switch in sovereignty to China from Britain have impacted its current markets and are expected to continue impacting its future strategies and position. Travel and Tourism is now considered as a strategic industry in Hong Kong and is being developed to become a socialist’s market economy. The current situation at Hong Kong has taken more than two decades of development and has yielded hard lesions and positive experiences. Hong Kong is still searching for better strategies of coming up with a strong tourism industry that will be able to successfully compete in both global and regional markets. Hong Kong has faced many challenges and opportunities in its development. Despite the already attained achievements, Hong Kong still has a bright future though it requires arduous efforts to achieve this effectively. Hong Kong has rich tourism resources which include incredible landscape diversity and cultures which stretch across the city’s vastness, old traditional structures, modern skylines and cultural heritages. The City has also managed to bring fourth agricultural villages to the city which include tropical vegetation that are lush and nomadic horse riders. The city’s other attractions included ice-capped mountains, entertainment activities, world class golf and quality resort. The economy of the city as well as the support from the government have both been in full support of tourism development. One of the main strategies that Hong Kong has been using over the years is leveraging most of its unique attractions like the Peak and Victoria Harbour to enhance its competitive and it achieves this through cultivating professionals who are highly qualified and ensuing that the city is readily accessible through issuing policy on open-door visa or efficient airport. The Cathy Pacific has grown over the years and now provides intercontinental flights network enhancing the city’s international profile. The duty free and low tax environment in Hong Kong has stimulated a well established retail economy that has attracted global reputation making Hong Kong a shipping paradise. This report is out to analyse the manner in which tourism has been organized in Hong Kong and how the current strategies and policies have influenced the destination at local level in relation to the prevailing economic, social and political condition. The report will further account for the infrastructural responses of the named conditions in policy terms. Major opportunities and challenges will also be examining in relation to the future of Hong Kong as a tourists destination and how the stated aims of Hong Kong’s managers relate to these challenge and opportunities. The report will determine the necessity of new markets and find out which future markets are appropriate. 2. Literature Review Tourism in Hong Kong is mainly managed by the Tourism Commission and Hong Kong Tourism Board (HKTB) and the two are out to promote tourism development in Hong Kong (Hemerlyk and Gammack, 2012, p. 30). The Tourism Commission is mainly charged with the responsibility of formulating, coordinating and implementing strategies, policies and plans for the development of tourism. At the same time, the commission oversees and coordinates the work of policies department and Government bureaux as well as initiatives that are meant to impact tourism development. The primary role of HKTB is to promote and market Hong Kong to become a leading tourism destination in the world and initiates strategies to enhance the experience of visitors in Hong Kong. The Board also comes up with recommendations which it presents to the Government on the range and visitors facilities quality (Hemerlyk and Gammack, 2012, p. 28). While Hong Kong as a leading tourist destination has maintained its distinct political, legal and social systems in relation to tourism, its economic and political influence have really been felt in the last two years. The government has come up with positive policies to ensure that tourism in Hong Kong advances. One of the policies in place is the government move to identify tourism as a crucial part of service industry. This was followed by further designation tourism as a growth point of the Hong Kong economy. The provincial government has been committed to ensure that tourism remains the pillar industry of the city. Several plans have been set up by the tourism management in the Hong Kong such as including more service industries that are related directly to resident consumption on tourism, recreation, entrainment and travel (Hemerlyk and Gammack, 2012, p. 23). More preferential policies by the government have been worked out in support of the development of tourism at both international and local levels. A good example is the way the central government has coke up with public holidays and weeklong holidays with an aim of giving the local tourists more time for leisure. Local tourism has been used as the driving force to increase consumptions of local attractions and stimulate further production. HKTB has come out strongly to encourage the private sector to be fully involved in promoting and developing tourism in Hong Kong. This has seen the private sector step in the industry aggressively investing in tourist’s hotels, recreation and relevant tourism projects. This has led to the number of local tourist’s facilities to increase dramatically increasing the occupancy levels of both domestic and foreign tourists (Hemerlyk and Gammack, 2012, p. 34) Individual participants and private sector involved in tourism development in Hong Kong are in full support of Hong Kong plans and strategies by implementing the time sharing concept that offers opportunities through sharing property holiday and sharing holiday time. To support the tourism industry economically, the government is in full support of the initiatives by the private sector by implementing a number of tourism programmes. Some of the programmes include enhancing tourism amenities and facilities, historic venues conservation and increasing middle cost hotels numbers. Travel packages have also been introduced by Hong Kong tourism management included with high quality products and high standard services. Key segments in the Hong Kong’s market include leisure holidays, shopping, MICE (Meeting International Conference and Exhibition), eco-tourism and dinning packages (Stone and Chen 2010, p. 60). Now that Hong Kong has been recognized globally as a shopping paradise, the tourism management has ensured that it has bolstered its retail sector though the expenditure of tourists on shopping. To ensure that its retail sector is strong and competitive, the management has freed sales tax, have come up with an import-export sector that is hassle-free and vibrant and high quality and wide range retail stores. Even though most destinations direct their policies on tourism on inbound travel, Hong Kong has appreciated the fact that outbound tourism is also an important socio-cultural and economic force (Stone and Chen 2010, p. 68). The city has gone further to encourage outbound tourism by employing more airline tickets agents, travel agents and passenger transport across the border who in additional to performing their duties, they advertise the city’s tourism potential through the word of mouth. The tourism management in Hong Kong has developed special interests and have come up with programmes to promote; medical, health tourism and education tourism programmes. Hong Kong has stood out as a preferred health tourist’s destination in Asia and has also emerged as a money destination having world class medical and health facilities with over 200 international standard clinics and hospitals. Education tourism has been another major contributor to the development of tourism in Hong Kong. Twinning programmes in association with both local and international universities now offer affordable tertiary education on tourism development to the locals (Stone and Chen 2010, p. 72). 3. SWOT Analysis a). Strengths and Weaknesses The Hong Kong tourism Industry is mostly controlled by the private sector. Travel agents and hotels form the better part of the private sector firms. Efficient airport and home carrier, general service sector vibrancy, entrepreneurial retail sector, educational sector and skilled labour force have all contributed positively in developing tourism in Hong Kong. Now that the service industry is labour intensive, the firms taking part in the tourism industry offer training and employment to many skilled labourers. The city caters for tourists from different backgrounds and cultures and this has cultivated its entrepreneurship. However, the long-term competitiveness of this sector that has been witnessed over the years may lead to a hinge with regards to the firm’s sustained competitiveness like travel agents and hotels (Executive summary 2001, p. 3). Hong Kong enjoys the luxury of a strong chain of international hotels like Shangri-la and Langham Hotels that have continued to benefit from the rich business environment around Hong Kong. The combination of services in Asia culture and English as well as the hospitality talent in the city has made Hong Kong stand out as the best destination in Asia. The Hotel sector in Hong Kong is a well organized industry and is being run by the Hong Kong Hotels Association overseeing more than 100 hotels (Executive summary 2001, p. 3). The Convention and exhibition industry in Hong Kong has grown over the years and fetches the city thousands of procurement and sourcing agents globally. The Trade Council and C& E firms like Global Sources and CMP Asia come up with several wholesale fairs in an effort to capture a large number of attendees (Hong Kong 2005, p 6). Hong Kong’s new airport unique efficiency in addition to the Cathy Pacific historical strength as the city’s home carrier have played a significant role in attracting international travellers who spend heavily while in Hong Kong. The airlines have been well managed over the years making significant strategic investments in the city through investing in infrastructure, purchase of modern aircraft and training high quality management and service staff. The travel agents have been identified as to lack the same loyalty to Hong Kong as compared to what is seen with the hotels. Services like corporate meetings organization might be offered in the city but the oversees clients itineraries might not include Hong Kong. Complacency has been another challenge as the over-optimistic look on the tourism industry could make the playmakers, the public in general and industry professionals to be vulnerable to competition. It is a great risk for the tourism authorities to make use of raw data in judging the city’s tourism sector competitiveness. b. Challenges and Opportunities Hong Kong challenges have been increasing over the years as its competitors try to strategise and improve their tourism sectors following the many years of recession. The city is also suffering in the wake of the handover in governance as well as the economic turmoil that followed in Asia countries. The government has also cut down on its support as an industry making it difficult to gain funding and incentives. Statistics have it that Hong Kong’s market perception has been deteriorating and it is loosing its market identify as a leading tourist destination (Hong Kong 2005, p 5). The city has also lost the ability it once had of compelling tourists to visit urgently. There has also been a misconception about the vitality of the city, its international image, money value and diversity in its attractions. The introduction of Mainland outbound travel provides great opportunities for tourism hubs in Hong Kong. The emergence of China as a global economic power has attracted international business as well as multinational firms increasing the number of visitors coming to Hong Kong. Now that tourism has been recognized as one of the leading foreign exchange source, the locals have stepped up to the opportunity and are coming up with several new promotions and marketing plans boosting local tourism. Grand Deals which have been introduced in Hong Kong have allowed for free shuttle services, discounted rooms and free use of the gym. Packages have also been introduced targeting business travellers and the packages including free pressing, usage of mobile phones, meeting room space and airport transfers (Hong Kong 2005, p 8). These measures will attract more tourists into the City and make marketing easier. 3. The Future of Hong Kong From the current statistics, it is clear that the number of tourists visiting Hong Kong has been increasing every year and this trend is expected to increase in future. It is projected that come 2120, more than 50 million tourists will be visiting the city every year (Tan 2002, p. 79). Despite the upcoming markets in Hong Kong, Mainland is expected to remain the leading source market even in future with its growth rate being averaged at 10%. Hong Kong is expected to receive stiffer competition from other tourism destinations as its attraction as a shopping destination is expected to worsen in future. China as a country is gaining popularity as a tourist destination and this is projected to continue and expectations are that by 2020, it will become the largest tourist destination in the world (Tan 2002, p. 82). This will boost Hong Kong’s position. Hong Kong is also expected to come up with joint tourism attraction and resorts and market such products together with the mainland failure to which it will loss its competitive advantage. The management of the city has based its hopes on the city’s key attractions, its diversity, the energy of its people and several marketing initiatives to help Hong Kong to have a positive growth in future. This is not enough as more has to be to develop the city’s tourism industry 4. Conclusion Hong Kong beyond any doubt has developed into a leading tourist destination over the years and is now being refereed to as “the Pearl of the Orinet.” This remarkable development can be credited to its British-Sino culture and its natural harbour. In addition to the natural attraction, the city was included with strategic development of entertainment and recreation business such as hospitality industry, traditional tourist’s spots and its movie industry. Hong Kong also faced stiff competition from cities such as Singapore. Despite the challenges, the city management has come up with strategies that have maintained the City as a leading tourist’s attraction globally. The future of the city looks bright as the city but the current market strategies are not enough. The management has come up with long lasting strategies and put exclusive and unique measures in place that will keep its image and ensure it attracts more tourists in future. Bibliography Executive summary, 2001. Tourism 2020 vision: Volume 3, East Asia & Pacific, World Organization, Madrid Hemerlyk, S & Gammack, J., 2012. Tourism and the Branded City, Ashgate, New York Hong Kong Tourism Board annual reports 2001/2002 to 2004/2005 Stone, A & Chen, P. 2010. Hong Kong & Macau (City Travel Guide), Lonely Planet, Hong Kong Tan, E., 2002. “Tourism Management & Policy: Perspectives from Singapore,” World Scientific Read More