The Future of Hong Kong Tourism

As of this writing, Hong Kong enters its fifth month of protests and the effects on tourism have been catastrophic: Visitor arrivals dropped by nearly 40% in August, some hotels have posted single digit occupancy, and some airlines have suspended long-haul routes.

While the protests and political stand-off show no signs of being resolved any time soon, there is reason to hope that Hong Kong tourism will eventually rebound. The same grit and pragmatism that helped Hong Kong through economic downturns and epidemics prevail but it will call for some audacious visionary thinking and not just textbook tourism measures to get it back on track.

Here are some areas of opportunities:

1) For one, reducing the reliance on the mainland China market has been a rally cry first raised after the Umbrella Revolution of 2015. Yet, as of last year, 78% of Hong Kong’s 65 million visitor arrivals came from the mainland. While it seems inevitable that mainland China will be the number one feeder market due to its porous borders with Hong Kong and increased connectivity with the development of the Greater Bay Area (GBA) initiative, investing in developing a more diversified portfolio of visitor source markets will only benefit Hong Kong in the long run.

After the Mainland, Hong Kong’s top nine source markets in 2018 in the order of arrival number were the Taiwan, Korea, the United States, Japan, Macau, the Philippines, Singapore, Australia and the United Kingdom. Altogether they accounted for over 93% of the total visitor arrivals. Increasing any of these markets, especially short-haul, will help stem the decline of China’s leisure visitors who are now lured to other destinations.

2) Hong Kong has significantly invested in developing its cultural, heritage, and creative tourism initiatives, but it has fallen short of capturing the explosive culinary tourism market, a real shame given its reputation as one of the most exciting gastronomic destinations in the world. While the likes of Singapore, Thailand, the Philippines and even Macao have aggressively courted world-class culinary events like Asia’s 50 Best Restaurants, World Gourmet Summit, and Madrid Fusion, Hong Kong has been content with its local Food & Wine Festival, which functions more as a trade show than a tourism draw.

3) The cruise industry has grown rapidly in Asia, with the number of passengers increasing by an estimated annual average of 33% to nearly 4.26 million in 2018. Hong Kong invested more than HK$6.6 billion in constructing the Kai Tak Cruise Terminal with the capacity to berth the world’s largest cruise vessels. But the city still lags behind other Asian ports in the number of ship calls received. “With nine in ten Asian cruise travellers choosing to cruise in Asia, it is clear that cruising will keep growing in popularity as more capacity will be deployed to Asia in the next few years,” said Mr Joel Katz, Managing Director for CLIA Australasia & Asia. How Hong Kong captures this market will be key.

4) The ambitious Greater Bay Area (GBA) initiative will build a world-class city cluster across the Guangdong-Hong Kong-Macau region. By 2030, the region is expected to play a leading role in advanced manufacturing, innovation, shipping, trade and finance. This development will be supported by Hong Kong’s world-class financial and professional services industries and will also be a boon to city’s current position as a leading M.I.C.E. venue.

Hong Kong currently hosts close to 100 major exhibitions every year. The city is at the heart of Asia and offers excellent transportation, logistics and tourism infrastructure, and provides a superior platform for M.I.C.E. The ongoing development of the West Kowloon Cultural District and recently opened Victoria Dockside add to the attractions.

Hong Kong has much to look forward to despite the current and future political headwinds. With tourism as one of the major pillars of Hong Kong’s economy contributing around 5% to the GDP, restoring stability and confidence in “Asia’s World City” is of paramount importance.

Catherine Feliciano-Chon