The recent anti-tourist protests surely dampen Hong Kong’s image as an international tourist destination. However, it does force us to rethink if Hong Kong can withstand the economic consequences if Chinese tourists were to stop coming to Hong Kong in increasing numbers. Deep down, most of us understand and appreciate the economic benefits they bring to Hong Kong. The question is how to find a balance?

The city’s financial secretary stated in the 2014/15 budget speech that Hong Kong overnight business travellers, who on average spend about HKD 10,000 per head (about 20% more than vacation overnight visitors), will be the city’s prime inbound tourism target. These business travellers allocate about 40% of their spending to shopping and 40% to hotel bills. In absolute terms, business travellers spend almost three times more on hotel bills than vacation visitors, while spending only about two-thirds the amount as vacation visitors do on shopping.

However, in the government’s recently published Assessment Report on Hong Kong’s Capacity to Receive Tourists, it noted that high hotel room rates will reduce the desire of visitors, including business and MICE (Meetings, Incentive Travels, Conventions and Exhibitions) visitors to come to Hong Kong. Inherent in this is a dilemma, i.e., increasing the supply of hotel rooms in order to bring down room rates will lower the overall spending of these high value visitors.

For this reason, I think Hong Kong needs to build on existing provisions and expedite long discussed tourism enhancement initiatives to increase leisure and entertainment offerings in the short and medium term. Another reason for having new tourist attractions is to relieve some of the pressure on crowded areas of the city as the number of tourist arrivals continues to increase toward 70 million in the next three to four years.

Amongst many others, Lantau Island has good potential to be positioned as an enhanced tourist destination by improving the connectivity of the cluster of attractions, such as Disneyland, Nongping 360, Discovery Bay and Tai O Fishing Village. Furthermore, establishment of new retail, MICE, entertainment, leisure and resort hotel offerings elsewhere in Lantau, such as the airport commercial district, the artificial island for the Hong Kong-Zhuhai-Macao Bridge Hong Kong, which is under construction, and the beaches along the coastal line, should also be expedited.

Another short to medium term option to divert cross border shoppers from crowded areas could be opening up the closed Chung Ying Street area in Sha Tau Kok and establish retail facilities there.

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