Hong Kong’s Silly Plan To Boost Tourism

Filed Under: Travel

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 ClassCathay 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…

Comments
  1. I’ll be there in a couple weeks. The hotels are dirt cheap but my flight on UA 869 is pretty full.
    I have weathered the Asian currency crisis and the SARS storms and can tell you that they were far worse than this blip.

  2. Give me ~$1500 round trips in biz from the east coast, and I’m there. Extra points for QR. But CX would do.

    Also, hotels should lower their costs. Not seeing much discounting at all for this spring.

  3. Agree that this will only bring in more visitors from Mainland China which would seem to be the goal. I don’t think that they’ve fully thought this trough as I’m fairly certain China doesn’t want their citizens seeing what’s going on in Hong Kong (or they’d be showing more of it on state controlled media) so this might be a counter-productive program for the regime.

    If they really wanted to boost high-end international tourism the traditional bread and butter
    for HK; the regime would help out Cathay rather than bullying them.

  4. I’m guessing it doesn’t specify how these tourists ought to arrive. As others have said, it will probably be targeted for Mainland tourists. I could see many travel agents simply pocket this.

  5. It is because the aim of the plan is to not for boosting tourism but instead giving out money to those pro-Beijing agents. Don’t forget nearly all major travel agency in HK are pro-Beijing and have mainland China investment. Those benefiting from this policy are those who have voting rights for choosing HK chef executive and the Legislative Council.

  6. I would ask the airlines to allow free stopovers on revenue or award tickers
    Have an overnight there but must leave or book a second ticket so I’m off to Tokyo rather than spending more nights in Hong Kong

  7. Or just, ya know, make flat beds available from the US(assuming they even want US tourists) at a reasonable price($$ and miles). Make airport transfers to and fro free/heavily discounted and lower hotel prices. Seems pretty simple.

  8. And because of this stupid idea…
    The kids skip school and come out burning the city again.

    What a stupid endless cycle.

  9. This is a good plan for the target audience. This is about mainland China….so great, now they will flood HK even more and push the takeover to the limit.

    Mainland Chinese tourists are NEW to the whole travel/tourism game, and make things, ummm, not great for everyone else with their selfish uncouth behaviour.

  10. I remember in 2003 after the SARS outbreak that Singapore ran hotel promotions at that were very attractive.

  11. I was there last week. The airport is operating just fine. There are no issues at all there. These protests are primarily a weekend event. The city is functioning normally during the week.

  12. Quick look at CX PE fares, it remain silly and overpriced compare to other carriers… I’m sure their upcoming Black Friday deals will be dud like usual.

  13. It is reflective of the Hong Kong Government – limited in creativity & solutions which work! They’d rather spend HKers money on subsidising Mainland Chinese access to our city (the stupid bridge) or the High-speed train which is constantly below capacity & predominantly used by Mainlanders.

    Instead of supporting CX & HX, they throw money across the border and wonder why millions take to the streets.
    #HongKongstandup!
    #SupportHongKong

  14. I am scheduled to transit HKG in mid Nov: DEL-HKG-ORD, has anyone recently been through HKG transiting and experienced significant issues?

  15. HK government can simply meet the demands of the protestors and that would end this crisis and will help tourism. But they can’t do that because their boss (Communist Chinese) won’t let them because saving face is more important than peace and prosperity for the people.

    I just came back from my Taiwan business trip and transited in HKG. No problem at all at the airport. Now CX has added mattress pad and slippers to business class offering, and I found the mattress pad helped my quality of sleep quite a bit. The food has also improved as I ordered mainly Cantonese dishes. Flew the A350-1000 twice and found them to be very comfortable and quiet. The 77W’s new screen is a bit slower in response but definitely sharper than the old screens.

  16. 1) Subject HK people to mainland China Government’s BS authoritarianism

    2) Act surprised that people object to this BS

    3) Turn the police against people and ally with gangs

    4) Act surprised that they economic outlook and tourism is suffering

    5) Offer travel agencies $15 USD to improve situation

    6) ???

    7) Profit

  17. I agree but as of this point, the current Hong Kong government is as incompetent as this plan is. Basically they have no idea on what they are doing. All these branches of governments are run by pro-China politicians, instead of experts in these relative fields. The problem with Mainland Chinese tourists are not going to be resolved in these silly schemes of commissions. I almost sense that it is an opportunity for these agencies to abuse these programs to make silly money for their own. Instead of resolving a problem, Hong Kong government just uses this chance to make more money for its lackies. Once again, political problems must be resolved politically. Cathay Pacific/Dragon will be fine because they have already long been relying on transit traffics these days. For now, they just have to focus on that transit traffic and hopefully they will survive these short term hurts. My friends have just flown a round trip to Canada (Toronto in/Vancouver out) and both his flights were packed, but he noticed that many of them are transit passengers.

  18. They had a plan back in 97/98 that I would jump on to get tourists back. For $1,100, two round trip tickets plus a room at the Grand Hyatt plus pickup at the airport and return in a Mercedes S class. Adjust for inflation and I will book.

  19. I dont think you understand. Its a small fee waiver to YOU but to THEM, when you announce a “discount” or “free” in places like HK, SG etc you will be shocked by the lengths people go through to get something for less……

  20. Have been trying to get a points ticket on CX J using AA points from YYZ to HKG and it has shown no availability for months.

    If things are that bad, why does CX not release more J?

  21. How about lower fares? I fly out of IAD and for all my trips to Asia, the option on CX, be it direct to HKG or connecting via HKG to some other city in Asia, and CX is always at least 50% more expensive than the other options, in business class.

    For example, pricing a one-week trip IAD-PEK for January, and it’s $3500 on CA’s non-stop, $3200 on AC via YYZ, and $11,000 on CX. What are they thinking? AA, UA, AC, CA, SU, NH all offer one-stop options at less than half the price of CX.

  22. @Nick in Chicago – Transiting in HKG is absolutely business as usual at the moment. With tourism down, airside is actually less crowded than usual. The main risk is that protests might prevent crew getting to and from the airport, but we haven’t really seen that happen since August. The airport and roads and trains leading to the airport are under heavy security to prevent disruptions, which has been working. Of course, anything could happen over the next month, but keeping the airport running is pretty much the HK Government’s top priority at the moment.

  23. @Jordan is correct. Mainland Chinese are quite uncouth, and, are widely disliked by Hong Kongers. HK will continue to be a place to avoid so long as Curried Lamb and her puppet government continue to deny the HK people a decent future.

  24. It’s local politics rather than a proper policy to boost tourism.

    The benefactors are owners of travel agencies, whom are the only voters for the the Tourism Functional Constituencies in the forthcoming March LegCo (the city’s de facto parliament). Employees like tour guides have no vote so they have not been taken care of.

  25. Ben, it is incorrect to say that “given the disruptions the airport has seen, the number of connecting travelers has dropped as well” – you make it sound like disruptions have happened more than once and/or are continuing to happen, which is simply not the case (of course the annoying new access controls into the terminal has something to do with it).

    And I also don’t think there is much indication that the number of transfer passengers has dropped, given that CX reported only a 7.1% drop in overall traffic in September, which I think is a sign that their transfer traffic is still robust. They may be pushing attractive fares on secondary markets like India, but planes to North America and Europe are quite full. Outbound traffic is also quite solid.

    Tourism is a totally different issue – here the damage is clear, especially from mainland China and elsewhere in Asia.

  26. Many Asian tourists coming to Hong Kong use traditional travel agents ( especially Indians, Mainland Chinese, Thais, Indonesians and others ) so it is a good plan because the HK travel agents can pass on some of the subsidy and reduce the cost of the package to Hong Kong. Many of these packages are only for 2 or 3 days and are using low cost hotels and airlines .
    HK will benefit because inbound tourists spend on F and B and shopping .
    It is a good idea .
    It is not aimed at Americans or European or even tourists from Middle East .

  27. Ben, respectfully this is not aimed at what the general world probably thinks of as a ‘tourist’. This is squarely at the mainland Chinese market where your average booking fills a 50 seater coach. So an extra HKD 5000 per group, yeah, I think it will push it a bit.
    HK is bliss right now without so many people, though.

  28. It seems to me that this can all come to an end by letting the people of Hong Kong have a say in their own future.

    Just have a referendum – vote for China or vote for independence. The Hong Kong people have never been asked what they want. I am sure Beijing is pretty confident their system is the best and therefore have nothing to worry about.

  29. Most of hong kong tourists are from mainland and main landers heavily use travel agencies. Applying this logic their plan isn’t as bad as you make it sound.

  30. @david no, that idea is a non-starter. Beijing will have tanks in the street if they even thought such a thing may happen.

  31. I’ve no idea why this jump to mainland Chinese. I see everyone here is begging a cheaper F J flight to hkg and somehow mentioned mainland Chinese for no reason.
    Tbh I’m from mainland China and don’t care a shxt abt HK coz been there done that.
    This strategy will not work for sure coz hk is the same as Catalonia. Though CNN will never film it and put in front of Americans’ eyes.
    Who is the worst trourist among the world before Chinese coming out? American. Who’s before American? Japanese in 90s. It’s just the same cycle. One nation traveling the most gets the worst reputation.
    People do whatever they can and say whatever they say, but take the bite.

  32. What an ignorant post! Local travel agents are the lowest paying jobs in HK and those are the people being affected most by the riots. The government clearly is trying to ease the pain at least temporarily to those unfortunate people. Why should they subsidise someone sipping champagne on first class? As if 150 hkd plays a major hand in your decision making process!

  33. It’s worse than “silly”; it’s on the cretinous side of dumb.
    While mainlanders make up the cheap-Charlie mass market, the big spenders are Japanese, Taiwanese, Singaporeans, Malaysians, Koreans, plus some wealthy Thais and Indonesians; plus the traditional vacationers from UK, US, Canada, Aus. The central consideration for the non-group leisure markets ( and the business market, of course) is: am I able to get around, see sights, eat and drink out, access public transport, make my flight. There has been virtually zero communication from the govt about the extent to which leisure activities can be pursued safely.
    I would go to Hong Kong for a vacation ( as I did during the financial crisis, and for work/other reasons during SARS), provided the hotel rates reflected the risk of disruption: they don’t ( evidently the hotels have decided not to reduce rates significantly, for reasons best known to themselves). Even a 20% reduction would be attractive.
    IMO, the HK govt would be better advised to focus on tax breaks, rebates, even subsidy per hotel guest rather than the travel agent route.

  34. I canceled my trip there this week. I have never been there and didn’t want to worry whether something crazy would erupt during my 2-day visit in a place I would be not super comfortable, to begin with. (not a city person)

  35. @Paolo

    Err, are you talking from your experience and facts? Cause I’m Indonesian who always visits HK and those high scale shops were always full by mainland tourists especially in places like Tsim Tsa Shui and Causeway Bay. Those shops were always packed with them and you can read the news how these shops are now closing early as the Mainland tourists have dropped by 90% in September.

    Just one of the example from Reuters report

    https://www.reuters.com/article/us-hong-kong-protests-luxury/worlds-luxury-brands-count-costs-of-hong-kong-protests-idUSKBN1WH1R9

    Next time, please don’t talk as facts when you are airing false information here. Not all of us, readers in here as ignorant as the others 🙂

  36. This is definitely aimed at Mainland Tourists, and to travel agencies in PRC this is a lot of money. I lived in HK for a long time and now work in Marketing Consultancy, and have worked with a Mainland Chinese Travel Agency so I can say that compared to commissions on HK travel, this does go a long way (remember mainland tourists pay pennies compared to intl. tourists so commissions can be VERY low per person.). You’ll also find that multiple travel agencies will be owned by the same person/group and from my reading I can only assume it applies to each Agency so this will definitely add up a whole lot. 8k USD is a lot of money for a travel agency and they’ll probably book tens if not hundreds of packages a week so I can definitely see this being quite lucrative.

  37. @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.

  38. @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.

  39. 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.

  40. @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.

  41. @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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