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Hong Kong Tourism Industry

Tourism industry is important

  • Tourism is the fastest growing of the Four Pillar Industries in Hong Kong.
  • The industry is relatively labour intensive and thus is an important driver for generating jobs. Between 2000 and 2009, 28.4% of the new jobs created were in the tourism sector. 
  • Many jobs in the tourism industry require relatively less skills, as reflected in the hourly wages. This is particularly important when demand for lower skilled workers  is limited at present amidst Hong Kong’s transformation into a more knowledge-based economy.

The Mainland factor is of increasing importance

  • Hong Kong’s tourism sector has benefited from mainland travelers’ increasing demand for overseas leisure travel underpinned by their rapidly expanding income.
  • The relaxation of Mainland’s policy has accelerated the development. 
  • Mainland visitors now form the largest contingent of visitors to Hong Kong and are also among the biggest spenders.

Promising prospects in the near-term

  • The number of visitors could increase by about 10% to 40 million in 2011.
  • Mainland visitors are likely to remain the growth driver, underpinned by the simplified visa arrangement under the “Individual Visit Scheme” and rising travel demand from Mainlanders amidst strong income growth

Challenges for sustainable growth in the longer term

  • The World Tourism Organisation believes the region will be of growing importance to the world’s tourism market, in particular with the Mainland’s rising popularity as a destination and increasing importance of Mainlanders as a source of international tourists.
  • Yet, over reliance on Mainland market poses challenges for sustainable long term growth, as Hong Kong’s competitive advantages are narrowing amidst increasing competitions from other Mainland cities and neighbouring economies. For instance, Hainan has launched a pilot tax refund program for visitors and Shanghai is building its Disney Park. Singapore and Macau are aggressively developing their resort and business travel industries.
  • Hong Kong needs to capture the rising opportunities and emerging industry trends to be able to attract more visitors and reinforce its position as a top tourist destination in Asia.

 

Why Tourism Industry is Important

Tourist arrivals registered a strong rebound in 2010, surging 21.8% to a record of 36 million. Mainland visitors soared 27% to 22 million and tourists from other parts of the world rose 17%. In the first two months of this year, the total number of visitors rose 11.9%, driven largely by a 15.2% growth of visitors from the Mainland.

Tourism is one of the four pillar industries in Hong Kong along with financial services, trading and logistics, as well as professional services. The tourism sector’s growth is the fastest of the four pillar industries. Between 2000 and 2009, tourism grew by an average annual rate of 5.7%, compared to a 2.2% growth of the overall economy.

The valued added of the tourism industry amounted to HKD50.9 billion in 2009. While tourism accounts for only 3.3% of nominal GDP, it employs 5.5% of total workers in the territory. The higher percentage contribution to total employment relative to that of GDP indicates that the sector is relatively labour intensive. Between 2000 and 2009, 28.4% of all new jobs in Hong Kong created were in the tourism sector.

Moreover, many jobs in the tourism industry require relatively less skills, as reflected in the hourly wages. This is particularly important when demand for lower-skilled jobs is limited at present amidst Hong Kong’s transformation into a more knowledge-based economy.

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Economic Focus (April 20, 2010). Hang Seng Bank Limited. All rights reserved. Reproduction of article(s) in whole or in part is permitted provided the source is quoted. Please direct any inquiry to Economic Research Department, G.P.O. Box 2985, Hong Kong.


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