Wake-up call for tourism sector

Updated: 2015-05-04 06:36

By Hong Liang(HK Edition)

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In the past few months, Hong Kong's notoriously gullible media had gone into a frenzy, regurgitating warnings from politicians and industry leaders that the demise of the tourism industry was threatening to trigger a wave of unemployment and drag the economy into the pit of a recession.

But, before we get too depressed, let's put the issue in perspective.

The tourism industry is indeed facing a number of problems that are seen to have contributed to its slower rate of growth.

There were fewer tourists, especially those from the Chinese mainland, coming to Hong Kong in March. But the overall growth rate for the first quarter had remained positive.

Nevertheless, the minor hiccup was enough to bring the many leaders and representatives in the tourism-related sectors, including retail, catering, hotel and tour agencies, out into the open to pin the blame on everyone and everything, except themselves. Many tourists were turned off not so much by the occasional outburst of largely harmless hostility but rather by unashamed greed in overcharging tourists on goods and services ranging from in-room Wi-Fi to rare Chinese herbal remedies.

Instead of trimming their profit margins to entice tourists, the industry has been calling on the government to come to their aid with public funds. The influence they can wield seems strong enough to goad the government into action although the effectiveness of its planned promotional campaign, lasting all of five weeks, has been brought into question by acclaimed industry experts, including Allan Zeman, who is best known for turning a neglected back street into a popular nightspot.

Wake-up call for tourism sector

The government shouldn't really be faulted for what is widely seen as a half-hearted effort. The government has much more weighty matters to consider other than making more low-return investments in tourism.

Despite the unprecedented boom in the past several years, tourism accounts for less than 5 percent of Hong Kong's gross domestic product. It is a small part of the colossal services sector and can never be counted as a pillar of the local economy.

To be sure, the tourism industry, as a whole, is a major employer in Hong Kong. But most of the jobs in this sector are of the low-skill and low-paying kind that holds scant promise for advancement. What's more, the industry employs a large number of foreign workers to meet demand.

Instead of shifting the blame and seeking government help, the industry should take the slack as a wake-up call for a thorough reexamination of past practices which have left a bad impression in the minds of many tourists. A group of retailers have taken the first step in this direction by offering discounts for one week at their outlets. But, it is too minor a gesture to do the industry any longer-term good. The entire industry needs to face up to reality and adapt to changing economic conditions. Hong Kong has little to offer to tourists, particularly those from the mainland who account for about 80 percent of all visitors, other than shopping.

Its competitiveness as a shopping center against Tokyo and various European capitals has been eroded by the appreciation of the Hong Kong dollar against the Japanese yen and euro.

As a free market, Hong Kong has no choice but to restructure its pricing mechanism to stay in the game.

And, yes, the days of making a fast buck on unsuspecting tourists are gone.

The author is a senior financial editor of China Daily.

(HK Edition 05/04/2015 page1)