Hong Kong may be waiting for an influx of holidaymakers from the mainland during the "golden week", but industry players warn that high accommodation costs could drive visitors away. Xu Xiaomeng reports from Shanghai.

About 700,000 visitors from the mainland are expected to spend their seven-day-long National Day holidays in the city this week, up more than 10 percent from the same period last year, according to estimates by the Hong Kong Tourism Board.

But tourism officials in Hong Kong said they are worried about the declining growth rate. This year's expected 10 percent increase in mainland visitors is only half of last year's 20 percent. And this slowdown in growth has been attributed mainly to the high cost of accommodation, while airfares have remained relatively stable.

Most hotels in Hong Kong have jacked up their room rates by 40 percent or more in anticipation of the national holiday rush, said Li Hancheng, executive director of the Federation of Hong Kong Hotel Owners' Association, when he was interviewed by the China News Service recently. The average daily rate for a standard room in a three-star hotel is 1000 yuan, compared with 300 yuan in Shanghai.

"There are many more other destinations mainland tourists can choose now compared with a few years ago," said Li. Hong Kong, however, has retained its attraction as a shopping destination, which has been given a further boost due to the appreciation of the renminbi against the Hong Kong dollar. Since October 2010, the renminbi has risen from 6.70 to 6.39 against the US dollar, to which the Hong Kong currency is linked.

A large proportion of the mainland tourists who visit Hong Kong are from Shanghai. "We have clients who go to Hong Kong three or four times a year to buy clothing, cosmetics and other accessories," said Shen Jie, a manager at the Shanghai CITS (China International Travel Service) branch in Hong Kong and Macao. But now, "more and more Shanghai people are going to Tokyo and even the major cities in Europe to satisfy their shopping cravings."

To entice big spenders from the mainland, some countries, including Japan and New Zealand, have simplified the visa application process for mainland tourists. What's more, hotels in those countries, unlike in Hong Kong, do not raise their prices to "fleece" mainland tourists during Chinese holidays, Shen said.

But still, "we have got solid bookings for Hong Kong tours in the first week of October from more than 200 clients", Shen said. This time last year, however, some 300 clients had booked their Hong Kong tours.

Qian Xiaohang, a Shanghai student of limited means, said she has wanted to visit Hong Kong "to do some shopping" for many years. But "I could never afford to go" until now, she said. Although she has saved up enough money for the trip, she said she did not want to join the crowds and pay the hotel premiums during the week-long holiday. "I plan to go later in October after everybody else has returned to Shanghai," she said.

The price of a CITS organized tour group to Hong Kong is 3,399 yuan per person during the holiday period, compared with the normal fare of about 2,399 yuan. On ctrip.com, the lowest one-way air ticket price was 2,130 yuan from Shanghai to Hong Kong on September 30. But it drops to as low as 750 yuan on October 7. National Day, however, is not the most expensive time to travel to Hong Kong. For that, you'd have to wait till Christmas.

Creating your own itineraries is also catching on. One source said it has risen to about a third of tour groups organized by CITS from about a seventh last year. Instead of traveling around with the tour guide, creating your own itinerary allows visitors to make their own plans and the travel agency only arranges the accommodation.

Meanwhile, Disney Land remains the most popular destination for mainland visitors. "All of our five groups to Hong Kong will visit Disney Land. For most holiday visitors, this is their first time to go to Hong Kong," said Shen. "First-time visitors that are likely to bring their families will surely take their kids to Disney."

Although Shanghai has already started building its own Disney Land, experts in Hong Kong think that will create a win-win situation for both cities, as Hong Kong and Shanghai have different facilities and source of visitors.

Another issue is the proposal to cut the luxury tax on the mainland, which may shake Hong Kong's fame as a shopping paradise. A spokesperson from the Ministry of Commerce announced in June that the import duty will be cut by 2 percent to 15 per cent. Mainland buyers accounted for almost half (43 percent) of Hong Kong retail sales last year.

"If I can buy luxury at a lower price on the mainland, I may not shop in Hong Kong," said one potential tourist. "I can find all the brands I need in Shanghai, and it is more expensive to shop in Hong Kong, taking food and living costs into consideration."

(HK Edition 10/05/2011 page2)