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Thursday 11 January 2001

Thank you for the kind introduction and a very good afternoon to you all. I am most grateful and honoured to have the opportunity to address such a respected body of business leaders in Hong Kong.

I am particularly delighted to use this forum to announce the provisional visitor arrival figures for last year - a record 13.06 million. That's more than 15 per cent up on last year and - since it tops the 1996 peak - finally puts to rest the post-Handover recession blues.

I am also happy to report that Hong Kong is emerging from the doldrums of the recession with tourism revenues now accounting for some $60 billion annually and, in the longer term, plans are well advanced for a number of new attractions that will ensure Hong Kong maintains its position as the single most popular destination in Asia.

While some sectors, such as retail, have still not reaped the full benefit of the tourism recovery, all signs indicate this year should see continued growth and higher spending.

What we DON'T want to see is any sharp increase in prices. After all, it is the lower airfares, lower hotel rates, and lower retail prices over the past three years that have restored Hong Kong’s competitive edge.

What is of some concern is the continued shorter length of stay and lower per capita spending rate.

To a certain extent, this phenomenon can be explained by the fact that almost a third of our visitors are day-trippers, transiting Hong Kong en route to other destinations, mostly the Mainland.

More than 70 percent of the 2.1 million Taiwanese visitors arriving in Hong Kong fall into this transit category. Again, visitors spend less because they are paying less for the same products and services.

While the hotels are missing out on many of our visitors, their occupancy rates remain strong. Last year through to November, average occupancy was 83 per cent compared to only 79 per cent in 1999. Obviously, one of our goals is to convince more transit travellers to stay overnight in Hong Kong.

More on that later, but first let me update you on the role and functions of the Hong Kong Tourist Association.

For a start, we shall shortly transform ourselves into the Hong Kong Tourism Board. This is no cosmetic facelift, but a reflection of the dynamic changes that will bring new focus to our work. Changes that will give new impetus to the development of our tourism industry. Changes that will benefit the whole community of Hong Kong.

To reflect our new image, we have designed a new logo. After long deliberation and widespread consultation, we decided to retain the red junk. Why? Because it is still the most instantly recognisable symbol of Hong Kong throughout the world. It would take years to obtain that recognition from any new symbol.

But what we have done is give it a sleek, modern look in line with Hong Kong's dynamic image. These are the two short-listed designs. We shall be canvassing the views of the public, opinion leaders and government officials, and, of course, visitors before making a final decision.

As valued industry members you have your finger on the pulse of opinion from both local residents and international travellers visiting our city, so we also welcome your input on our final decision.

I should emphasise, however, that while change will be for the better, the new Hong Kong Tourism Board will have a hard act to follow. Among its international peers, the HKTA is recognised as one of the most innovative and effective tourism bodies in the world.

Receipt of an unprecedented 37 awards and plaques over the past two years for excellence in marketing and promotions is testament to that.

The most obvious change - and legal reason for the revised name - is the abolishment of the Membership Scheme. When the association was established 44 years ago, such a system was devised as a means to co-ordinate and combine resources within the industry, and improve standards. It has served its purpose well.

But times have changed. Virtually all sectors now have parent organisations to coordinate their work and represent their interests.

Instead of a nanny, the industry needs a strategic body that can vigorously market Hong Kong abroad and provide a platform for ALL members of the tourism industry to market their specific products or services.

The decision to do away with the Membership Scheme was a key recommendation in a Strategic Organisation Review that the HKTA undertook in 1997. The Review highlighted the need for the HKTA to divest itself of most domestic activities, including event organisation and tour operations, so that it could concentrate its resources on the primary function of promoting and marketing Hong Kong overseas.

The Government has recognised the need to take a more active role in support of the tourism industry, and established the Tourism Commission in May 1999. This further enabled both the Government and the HKTA to delineate their respective roles, and for the HKTA to restructure and reorganise the Head Office to meet its future role.

Before the creation of the Tourism Commission, the HKTA's role was ambiguous. For instance, in meeting its obligation to increase tourism to Hong Kong, the HKTA created and organised events such as the Arts Festival - long since divested - and currently the Chinese New Year Parade, as a means to attract visitors at an otherwise low season. Very commendable, but very labour intensive.

At the same time, the HKTA has come up with numerous recommendations for enhancement and improvement to existing attractions, and ideas for new products and facilities.

But with no power - nor finances - to bring them to fruition, many proposals have fallen by the wayside.

Thankfully, the Tourism Commission can - and does - provide the conduit to knock the necessary heads together to make things happen. Let me assure you - as a politician as well as Chairman of the HKTA -- this is where Government involvement is welcomed with open arms!

In short, the Tourism Commission's main responsibilities are:

• To formulate tourism policy and strategy, in consultation with the HKTA and the tourism industry
• To study the feasibility of new tourism attractions and facilities, and to oversee their implementation
• To co-ordinate and drive other Government bodies involved in tourism-related projects
• To explore ways to enhance the overall attractiveness of Hong Kong as a tourist destination
• To facilitate the staging of world-class events to develop Hong Kong into the "Events Capital of Asia", and
• To regulate and enhance the service quality of travel agents.

In turn, the HKTA's main responsibilities are

• To promote and market Hong Kong globally as a leading international city Asia and a world class tourist destination
• To endeavour to increase the fiscal contribution of tourism to Hong Kong
• To support other members of the tourism industry, and
• To help promote the importance of tourism to the Hong Kong community.

Through our close liaison and consultation, the roles of the Tourism Commission and the HKTA are totally complementary. Together, we provide the tourism industry with the leadership and support needed to keep Hong Kong at the forefront of world tourism.

Our current mission is to develop a hospitality culture in Hong Kong. Anyone who visited Australia during the Olympics will know what a difference that can make to the impression visitors can gain of a destination.

We have had some success with our "Be A Good Host" Campaign. Now we are about to embark on a mega campaign that will bring tourism to every region of Hong Kong. Not just to cater for overseas visitors, but to tap the vast potential of domestic tourism.

Working closely with District Councils, we aim to open up the treasure trove of scenic spots, historic sites and unusual aspects throughout the territory. We want every citizen to take pride not only in Hong Kong as a whole, but the special nature of their particular home and environment.

This is part of an overall strategy to diversify the Hong Kong product, and give visitors reasons to explore further afield and spend longer in Hong Kong.

At the same time, in meeting our obligations to increase tourism revenue for the benefit of Hong Kong, we are targeting high-yield sectors in all our major markets. In particular, we strongly promote Hong Kong as a meetings, exhibition and incentive centre. Business visitors invariably stay twice as long and spend twice as much as people on holiday.

All of you here today can assist us in this mission. Some of you have already become "Hong Kong Goodwill Ambassadors", but anyone who travels or who hosts visitors from abroad can - and should - be ambassadors for this city. It shouldn't be difficult to convince your overseas colleagues to use Hong Kong for their meetings and even social visits.

Instead of harping on about the pollution, look at the positive aspects of Hong Kong...... the incredible unspoilt countryside within minutes of the urban areas; the quaint back streets with age-old artisans plying their trade only a block from towering office blocks; the fascinating museums that trace Hong Kong's heritage back 6,000 years.

Both the HKTA and Tourism Commission are geared to help you promote Hong Kong. Don't hesitate to contact us for assistance. Think of it as an investment. An investment in your future and the future of Hong Kong as THE must-see destination in Asia.

We will now distribute copies of the two revamped junk designs currently under consideration and would value an indication of your choice of logo to be used in the promotion of Hong Kong in the new millennium.

Thank you.

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