Hong Kong’s Silly Plan To Boost Tourism

By: Ben Schlappig

Published: October 23, 2019

49 comments

Hong Kong has seen a huge drop in visitors after months of protests, which have increasingly impacted the airport and airlines as well. Not only has the number of inbound travelers dropped, but given the disruptions the airport has seen, the number of connecting travelers has dropped as well.

Cathay Pacific A350 Business Class Cathay Pacific has seen a drop in passengers

About a month ago I wrote about how airlines operating to & from Hong Kong asked for waived airport fees, in light of the situation. We’ve seen several airlines reduce service due to decreased demand, and it was said that waived airport fees would make flights more sustainable for the time being.

In fairness, there was a precedent for this, as relief had been provided to airlines in similar situations, during the financial crisis and SARS crisis.

Well, Hong Kong has now unveiled a plan to boost tourism, and it doesn’t help airlines much at all. It’s not entirely clear whether waived airport fees are still on the table, or if this is being done in place of that.

This 100 million HKD (~13 million USD) plan will run between November 2019 and March 2020, and provides incentives to travel agents:

Travel agencies will get 120 HKD (~15 USD) for every overnight visitor they book
Travel agencies will get 100 HKD (~13 USD) for every outbound tourist they book
Each travel agency is capped at 60,000 HKD (~8,000 USD), and they can do what they want with the money (so they can pocket it, pass on the savings, use it to promote Hong Kong, etc.)

That’s really a pretty disappointing plan to boost tourism, in my opinion. A 13-15 USD incentive to travel agencies hardly seems like it will move the needle.

Furthermore, arguably this is actually bad for airlines. Travel agency bookings often come with commissions and are more costly than direct bookings, so this actually encourages people not to book directly with airlines, which seems counterintuitive, since airlines need relief here.

United has cut their Chicago to Hong Kong flight in recent weeks

Hopefully Hong Kong has more of a plan than this, because this seems unlikely to move the needle…

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Paolo Diamond

October 26, 2019, 10:30 am

@Ivan It’s NOT the same thing at all: the stay patterns are dramatically different, as they are in every city Chinese tourists visit in groups. It depends on duration, daily expenditure, tour group ( including the notorious ‘ zero dollar’ tours) or independent and many other factors.

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Ivan Guest

October 26, 2019, 1:55 am

@Paolo It's the same thing. Mainland China tourists recorded to be the majority for Hong Kong tourism sector. Do these tourists don't need to eat, sleep and use transportations while there are in HK as well as the in and out to HK? Your comment does not make sense.

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Redfish Guest

October 26, 2019, 12:13 am

This HK$100 million plan is to help the travel agencies. Many of them are small. The owners are losing money as they continue to pay rent. The commission-based employees have very low income. They are possibly doing worse than the airlines. The airlines have the transit business and cargo business, which are ok. Maybe that's why the HK airport has so far resisted the calls to lower fees. It seems the hotels offer a lot of bargains now, even the best ones like Four Seasons, Shangri La, Peninsula, etc. If the riot situation doesn't get worse, maybe the low price will draw more people here.

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Paolo Diamond

October 25, 2019, 7:08 am

@Intan My comments were in reference to hotels, leisure , restaurants and airlines. I have no interest in the luxury retail sector ( but it contributes relatively little to the economy of HK). In any case, Beijing has no interest in facilitating tourism to HK...and if it gets very bloody-minded it can restrict travel in the same way it has done with Taiwan. @Nick I gather the independent hotels are discounting ( just as they have been in Bangkok because of the tourism downturn) . I don’t see anything cheaper at Hyatt or Marriott ( and during both GFC and SARS, they discounted heavily. People need incentives to go to HK: not rebates for travel agents designed to get mainlanders into a Rolex store; tourism related employment is in the hospitality/ leisure sectors. I’d go for a weekend/ few days if discounts were significant..but only for the hotels at which I’d want to stay.

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Nick Guest

October 24, 2019, 11:38 pm

@Paolo Hotel rates are down by a lot more than 20% at the moment. Luxury brands are discounting less, as are hotels in areas away from the protests, but all hotels are discounting at least a little. I stayed at Disney Hollywood Hotel and Marriott Ocean Park recently, and both were about a third off their usual rates. I also stayed at Holiday Inn Express Sheung Wan and Bishop Lei House, and they were at least half price. Kowloon hotels have even deeper discounts.

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