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Hong Kong's Visitor Arrival Figures Surge to 1.64 Million in August 2003

Travel News Asia 30 September 2003

Just four months after Hong Kong's tourism industry was devastated by the impact of SARS, visitor arrivals returned to positive year-on-year growth in August, the Hong Kong Tourism Board (HKTB) have announced. A total of 1,644,878 arrivals were recorded in the month, 9.6% ahead of the 1.50 million arrivals in August 2002.

The results mark a V-shaped recovery for the tourism industry, following year-on-year shortfalls of 64.8% in April, 67.9% in May, 38.2% in June and 5.6% in July.

HKTB Executive Director Clara Chong said that although the Board had been confident that the industry would stage a strong comeback, the speed of the recovery had surpassed all expectations, thanks to the strong, all-round support of the trade in providing attractive hotel and travel offers, as well as many special privileges to visitors. "At the start of our Hong Kong Welcomes You! promotion in mid-July, we set ourselves a target of two million visitors during the two-month promotional period," she noted. "In fact, we reached that target some three weeks early, during the third week of August, and for the full welcome period up to 15 September we saw more than 3.1 million arrivals."

Nevertheless, Ms Chong cautioned, it would be premature to assume the recovery was complete. "The challenge ahead of us is to ensure the revival can be sustained, now that the pent-up demand has been satisfied and most of the irresistible offers have run out. After some rapid catching up since June, we expect the pace of the recovery to become more gradual in the coming months."

Ms Chong emphasised that the HKTB would strive to restore all markets to pre-SARS levels as quickly as possible, in line with the objective of maintaining a balanced portfolio of visitors. "This is why we have just launched our new global advertising campaign under the "Hong Kong - Live it, Love it!" theme," she explained.

"It is also why we intend to continue staging a series of mega-events until the first quarter of 2004 at least, and thus reinforce Hong Kong's long-term image as a spectacular and exciting destination. Now is the time that many long-haul visitors will be starting to plan next year's vacations, so it is crucial that we keep creating excitement and international publicity for Hong Kong, and so help to ensure a full recovery across all markets within 2004."

Analysis by Markets, August and January-August 2003

Boosted by the new visa relaxations allowing certain Mainland China residents to travel to Hong Kong as individuals, which was extended from four cities in Guangdong to eight from 20 August, arrivals from the Mainland hit an all-time high of 946,122 for the month, a 43.4% increase on the figure for August 2002.

Most other markets continued to show negative year-on-year growth, although the gap is now rapidly narrowing. Arrivals from The Americas were a modest 12.6% down, with the United States showing only a 10.4% decline, compared with 41.7% in July. Arrivals from Australia, New Zealand and South Pacific were 18.2% down in total, but New Zealand recovered to the same figure as last August. And most countries in Europe, Africa & the Middle East continued to make a steady fightback, with the market overall showing a 20.8% decline.

In the short-haul markets, arrivals from North Asia were 28.8% down, with South Korea improving to a single-digit shortfall of 9.0%. Arrivals from South & Southeast Asia were 16.0% down overall, but India returned to positive growth of 1.1% while the Philippines, Indonesia, Malaysia and Thailand all showed continued recovery. Arrivals from Taiwan were 11.9% down. 

Cumulatively, arrivals for the first eight months of 2003 now stand at 14.4% down compared with the same period in 2002, due to four consecutive months of substantial negative growth from April to July. Arrivals from the Mainland, however, are showing positive overall growth of 18.6%. All other major markets are currently in negative overall growth of between 30% and 41% for the year.

Same-Day Visitors

In August 2003, 33.5% of all visitors continued to other destinations on the same day as arrival. This is a significant improvement on the 40.8% recorded in July and 44.8% in June, showing that more of the longer-staying leisure visitors are now coming back.

Many of those who depart on the same day as arrival are business people from Taiwan, travelling via Hong Kong to or from other destinations in Southern China. In August, only 26.4% of all Taiwan visitors stayed for one night or longer. In contrast, 77.1% of visitors from The Americas stayed for at least one night, as did 74.6% of those from the Mainland, 74.5% of those from Australia, New Zealand & South Pacific and 74.2% from South & Southeast Asia.

For the first eight months of 2003 to date, 61.8% of all visitors have stayed for one night or longer, compared with 64.6% for the same period in 2002.

Hotel Occupancy

Average occupancy rate across all categories of hotels and tourist guest houses in August was 88%, compared with 86% for the same month in 2002. This is the highest figure so far this year, reflecting a continued strong recovery from the 71% average occupancy in July, 34% in June and just 18% in May.

Hotels of all tariff categories and in all locations benefited from the improved figures, with the highest tariff hotels achieving 78% occupancy, the same as in August 2002. However, the improvement was most marked in medium tariff hotels, which are popular with Mainland tour groups; these establishments averaged 94% occupancy during the month. Similarly, hotels outside the prime tourist areas performed most strongly; those in districts of Hong Kong Island outside the Central to Causeway Bay corridor achieved 96% occupancy, and those in Yau Ma Tei and Mong Kok 93%.

Despite these improved occupancy rates, the average achieved hotel room rate slipped slightly further in August to HK$556, 11.1% below the rate in August 2002.

Cumulatively, occupancy for the first eight months of 2003 now stands at 61%, compared with 82% for the same period in 2002, while the average achieved hotel room rate is 7.0% lower at HK$630.

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