FULL STEAM AHEAD
Hong Kong’s tourism industry shows no sign of slowing down despite declining arrivals
By prudenCe Lui
espite a promising start to the year – for the first four months arrivals were up 1.5% year-on-year – Hong Kong SAR is now following other tourism destinations around the world with a significant downturn in numbers due to the ongoing global economic malaise and the Type A (H1N1) influenza. Double digit declines in May and June mean overall figures for the first six months of the year fell 3.4% compared to the same period last year. Long-haul markets have been the worst performers, with double digit decreases recorded from the US and Canada (-14.8%); Europe, Africa and the Middle East (-14.2%); and Australia, New Zealand and the South Pacific (-11.6%). Markets closer to home have not fared much better: North Asia is down -25.4%, South and Southeast Asia down -6.6% and Chinese Taipei down -13.2%. Only mainland China showed positive figures during this six month period, registering a 4.6% increase.
May was a particularly bad month for Hong Kong, following the negative publicity generated from the compulsory seven-day quarantine of Type A (H1N1) infected tourists at the Metropark Hotel, Wanchai. To reduce the arrivals shorthall, HKTB has boosted its promotions on the mainland and focused on short-haul markets. A spokesperson for the tourism board says that authorities beefed up promotional efforts during the summer period to encourage peak season travel and to overcome bad press from the flu pandemic. “We have also intensified our PR efforts in overseas markets to reinforce the point that it is business as usual in Hong Kong and no quarantine action is being taken. We have also increased the number of trade and media familiarisation trips to let people see the city first hand and report positively on the current situation,” she adds. MICE, as always, is under the microscope. Between January and April the sector grew 1.9% for overnight MICE arrivals, but HKTB expected momentum to slow down during the summer
pata Compass september/october 2009
PATA Compass talks to CeCe Hoang, marketing Communications manager of the new Habour plaza 8 degrees
Tell me about the new Harbour Plaza 8 Degrees. What makes this property unique? We offer a refreshing, creatively designed hotel with a boutique feel – both in terms of the software and the service despite having so many rooms. Who is your target market? Business/MICE, leisure travellers or both? What facilities/services will you offer for each of these sectors? We will target both corporate, leisure, long-stay and weddings. Our facilities include an outdoor garden terrace, a large function room (which can be divided into nine smaller rooms), an outdoor swimming pool, whirlpool, fully-equipped fitness centre and outdoor pool bar. Which source markets will you be targeting? We will be targeting both short-haul and long-haul markets as we would like to invites guests from all over the world to stay at our hotel, whether it be for corporate, leisure, MICE or long-stay. 2009 has been a very challenging year for tourism around the world and Hong Kong is no exception. Are you not concerned about opening a new hotel during this difficult time? We have a very qualified and positive management team that meets on a regular basis ensuring proper planning. Moreover, the theme of Harbour Plaza 8 Degrees is ‘Happy’ and we aim to portray this via every qualified candidate we hire to work in the hotel in order to better serve our guests. What kind of marketing efforts will you use to raise awareness and interest in the hotel? We will employ on and off-line advertisements both locally and internationally. In addition, through search engine optimisation and online marketing, we hope to drive traffic to our website, as well as via print, TV and other media advertisements. We also hope to tempt guests with a number of attractive packages, which will start at HKD800 (plus 10% service charge and prevailing government tax) per room per night.
BREAK FROM THE NORM
school holiday period as corporations cut spending on business travel. “The MICE business is a long-term process. We will continue to stay focused on implementing our strategies and efforts have been stepped up to engage all trade sectors and our target customers,” explains the HKTB spokesperson. She adds that an Online Incentive Specialist Programme will be launched in South and Southeast Asia to educate and incentivise the travel trade to promote Hong Kong. “Value-for-money incentive packages are also being developed to capture the pent-up demand, especially from the mainland,” she says. Hong Kong is, she says, still a very competitive MICE destination in the region despite the economic doldrums. “Having said that, the major challenge is how we keep our plans flexible in response to the everchanging environment.” Rebecca Kwan, General Manager of Lan Kwai Fong Hotel, is positive about HKTB’s efforts, highlighting the ‘Super Value Hong Kong’ promotion during June and July which helped attract leisure travellers and reinforce Hong Kong’s status as a world-class shopping paradise. Large hotel chains are also expanding their presence in Hong Kong – an indication of confidence in the city‘s long-term prospects. Despite sluggish inbound traffic and hotel occupancy averaging 74% (compared to 83% last year) for the first six months of the year, new properties continue to enter the market. This includes the 828-room Harbour Grand Hong Kong, a luxury brand from Harbour Plaza Hotels and Resort, which opened in June. The hotel's general manager Benedict Chow is hopeful that the initial downturn caused by the Type A (H1N1) influenza will not have a lasting impact on tourism. “International travellers tended to be worried at the beginning and reduced their travel because they were afraid that it would be like SARS. Now travelling is starting again with summer arrivals,” he says.
september/october 2009 pata Compass
photograph courtesy of HKtB
“We have intensified our PR efforts in overseas markets to reinforce the point that it is business as usual in Hong Kong.”
Hong Kong Tourism Board.
He also hopes to see an upturn in business arrivals by the end of the year, which is a key target for the hotel. “MICE is very important to a hotel of our size. It generates revenue for almost every aspect of our business like rooms, F & B and catering. We believe our excellent meeting and banquet facilities will be able to capture the market and fulfill client needs.” His confidence is reflected at group level, with Harbour Plaza Hotels and Resorts set to open another new property – Harbour Plaza 8 Degrees this October (see box out). Other hotels set to open by the end of this year include Cosmo Kowloon Hotel, Crowne Plaza Causeway Bay, Empire Causeway Bay, The Upper House, Pacific Place in Admiralty and 1881 Heritage.
pata Compass september/october 2009
photograph courtesy of HKtB
Hong Kong Disneyland is also aiming to raise its game, following the recent approval from the Hong Kong Government for its ambitious expansion plans.
Meanwhile, existing hotels are ramping up their marketing efforts in a bid to minimise the impact of the downturn. Lan Kwai Fong’s Rebecca Kwan says they have created a number of value-added packages to capitalise on new business opportunities, and encourage repeat visits. “We always focus on service and guest interaction, ensuring guests feel at home,” she comments. Hong Kong Disneyland also aims to raise its game, following the recent approval by the Hong Kong Government of its ambitious expansion plans. The park will add three new themed areas ‘Grizzly Trail’, ‘Mystic Point’ and ‘Toy Story Land’, which will feature more than 30 new attractions. The expansion will be completed in phases with a total cost of HKD3.63bn. Meanwhile, rival Ocean Park is continuing its six-year HKD5.55bn Master Redevelopment Project, which started in November 2006. Once complete in 2011/2012, the park will double its attractions to more than 70. Other attractions include the recently opened Noah’s Ark theme park on Ma Wan Island, which boast’s the world’s first ‘full-size’ Noah’s ark replica. Facilities include a five-storey entertainment complex equipped with multi-media exhibition hall, museum and learning centre, a sea-view 19-room hotel and a restaurant overlooking the Rambler Channel and Tsing Ma Bridge. In anticipation that tourism will eventually rebound, Hong Kong International Airport (HKIA) is building a new North Satellite Concourse to cater for the growing volume of small aircraft and provide additional bridge-served aircraft stands. “The new facility is expected to be ready in late 2009. NSC is one of the major projects under the HKIA’s HKD4.5bn facility and capacity enhancement programme announced in 2006,” says an HKIA spokesperson. Additionally, the long-awaited permanent SkyPier – which will provide cross-boundary ferry services that connects HKIA with seven ports in the Pearl River Delta – is targeted to open by the end of the year, In the short term, however, the airline industry continues to struggle – not only from the general downturn in tourism but also the increasing number of cross-strait flights between mainland China and Chinese Taipei that threaten Hong Kong’s position as a transit hub for Taiwanese travellers. Local carrier Cathay Pacific announced an across-the-board capacity cut of 8% from April, with flight frequencies and seat capacity trimmed back on routes to London, Paris, Frankfurt, Sydney, Singapore, Bangkok, Seoul, Taipei, Tokyo, Mumbai and Dubai. Its sister carrier Dragonair introduced a 13% capacity cut from the beginning of May, but on a positive note is launching twice-daily service to Guangzhou starting September 14.
pata Compass september/october 2009
photograph courtesy of HKCeC
photograph courtesy of Hong Kong disneyland
RAISING THE STAKES
regal Hotels in Hong Kong is upgrading both its facilities and its offers in an effort to woo visitors says dora Liu, Vice president, sales
Tell me about Regal Hotels in Hong Kong Regal Hotels International manages five quality hotels in Hong Kong (Regal Airport Hotel, Regal Hongkong Hotel, Regal Kowloon Hotel, Regal Oriental Hotel and Regal Riverside Hotel), providing the utmost in Asian hospitality. With their strategic locations and unique style, all Regal Hotels offer a diverse range of accommodations and facilities, unparalleled service and attention to detail. What new developments have you recently undertaken? We have added four floors on top of the Regal Hongkong Hotel structure to accommodate a ‘Boutique Hotel within Hotel’. The Regal Royale executive floors offer luxury facilities to cater to business and MICE travellers’ needs. MICE was also the reason behind our introduction of a new room category at Regal Riverside Hotel – Regal iClub – where we now have an additional 280 rooms. A major facelift has taken place at the Regal Kowloon Hotel, covering the Club Floors and Regal Club Lounge, while the Regal Oriental Hotel has refurbished its lobby exterior and added 49 rooms. How important is the MICE market for you? All Regal Hotels are mainly focused on business and MICE travel from international markets, supported by secondary business segments in wholesale and tours. To cater to the needs and expectations of the international discerning travellers, Regal Hotels have taken the following actions: i) Upgrading hotel facilities, which include new Executive Floor rooms at the Regal Hongkong Hotel, Regal Kowloon Hotel, Regal
regal Hongkong Hotel - regal royale room
Oriental Hotel and Regal Riverside Hotel with a full range of facilities and privileges. ii) Provide an instant booking channel through the hotel’s website with value added offer – free in-room internet. iii) Offer ‘Free Meeting at Regal’ with free meeting venue, food and beverages arrangements for booking 10 Deluxe rooms or above. iv) Expand sales and reservations networks and service by opening regional sales office in prime cities. How has business been this year and what efforts have you made to minimise the impact of the downturn? The hotel business environment in Hong Kong is proving to be remarkable resilient due to continued positive demand from mainland China. Despite this we are offering competitive rates with value-added amenities, such as free in-room internet access, to entice more visitors from our established markets. We are also exploring new markets and have lined up direct contacts in Japan, Korea (ROK), India, Russia, Vietnam and others. In addition, members of frequent flyer programmes can earn free mileage for every stay at an eligible rate at any of the Regal Hotels, while our own ‘Regal Rewards‘ offers frequent travellers refined services and unmatched privileges.
pata Compass september/october 2009
photograph courtesy of Harbour Grand Hotel Hong Kong
In an effort to help airlines, HKIA has reduced both landing and parking fees by 10% untill the end of 2009. This move comes under its HKD450mn relief package started earlier this year. The cruise sector, on the other hand, has been relatively sheltered from the downturn. April saw China relax the rules for mainland tour groups, allowing them to travel to Chinese Taipei via cruise vessels home-ported in Hong Kong. This has invigorated the industry, with Star Cruises and Costa Cruises organising itineraries to tap this traffic. Costa Cruises, for example, will introduce a regular Chinese Taipei cruise itinerary from January 2010 for mainland tours. They will offer a total of 15 cruises throughout the year, departing from Hong Kong aboard the Costa Classica to Taipei, Keelung and Taichung. Looking further ahead, the long-awaited cruise terminal at Kai Tak is set to debut in 2013. It will have two side-byside berths allowing the concurrent moorings servicing of different types and sizes of cruise vessels, up to 17 hotels totaling 6,800 rooms and a cross-boundary heliport. Hong Kong may be witnessing its first serious tourism decline since SARS in 2003 yet, with so much development, there is a real sense of confidence that this downturn is a merely a temporary setback and one the SAR hopes to rebound from stronger than ever. For further information: www.discoverhongkong.com