Speech at Panel on Economic Development

Tourism policy and performance

Hong Kong Tourism Board Work Plan for 2017-2018

Tourism policy and performance

Mr CHAN Chun-ying asked about the reasons for the drop of visitors from the India market. He also considered that those arrivals from India who raised non-refoulement claims to the Hong Kong Government should not be counted as tourists.

Mr Anthony LAU of HKTB responded that India was one of the new markets that HKTB had been paying promotion efforts for years. However, due to various factors including flight capacity, fall of Indian rupee since the last quarter of 2016 and the intensified competition due to reduction of travelling expenses to Europe, the number of visitors from India had started to drop in 2016. Looking ahead, the performance of this market would still suffer from the above situations which had been reflected in the visitor projection in 2017. He also said that the tourism figures kept by HKTB could only reflect the number of arrivals. The Immigration Department should have the figures on those arrivals who had breached the immigration law in Hong Kong.

Marketing strategies

Mr CHAN Chun-ying noted that the Government had allocated an additional funding of $17 million to further promote the diversification of tourism products. He sought more details of this initiative.

Mr Anthony LAU of HKTB said that among the $17 million funding, HKTB planned to support the local trade in developing new green tour products. C for T supplemented that HKTB would also launch two pilot schemes to promote in-depth green tourism as well as tourism projects with local characteristics. HKTB, in collaboration with Government, would work out the funding criteria and guidelines for the two pilot schemes taking into account the views of relevant key stakeholders. At the Chairman’s request, Mr LAU agreed to provide a list of relevant projects to the Panel after the meeting.

Government’s funding and working relationship with HKTB

Noting that the recurrent fund allocated to HKTB had decreased in 2017-2018, Mr CHAN Chun-ying enquired about the mechanism for determining the funding level. Given that HKTB would strengthen the corporate governance in this year, he enquired how its governance could ensure that the Government’s funding would be used effectively to drive the tourism performance and enhance the achievement of HKTB’s objectives.

C for T said that the recurrent fund allocated to HKTB in 2017-2018 was 1% less than that of 2016-2017 due to the Government’s 0-1-1 savings programme. However, in addition to the recurrent fund, the Government had earmarked an additional funding of approximately $300 million in 2017-2018 to HKTB, which was about $83 million or 36% more than the additional funding allocated in last year.


Update on Hong Kong Disneyland Resort

Performance of HKDL

Mr CHAN Chun-ying cast doubts on the cost-effectiveness for marketing HKDL in South Korea. He said that this country was so close to the Tokyo Disneyland and hence it was more convenient for the South Koreans to visit the Tokyo Disneyland instead of HKDL.

Mr Samuel LAU of HKDL replied that the international markets displayed robust growth momentum with a year-on-year increase of 11% in attendance in FY16, and some Southeast Asian markets had marked double-digit growth. For example, the guests from Japan, who had high affinity for Disney products, increased by 37% in FY16. Besides, Guangdong cities also had strong potential, with double-digit growth in attendance during the Halloween period and the Chinese New Year holiday. HKDL would continue with its efforts in driving guests from all potential international and Mainland markets.

Royalties and management fees of HKDL

Mr CHAN Chun-ying pointed out that based on the 2009 formula, the base management fees paid to TWDC for FY15 and FY16 were largely reduced, as compared to the ones deriving from the old formula. He sought more information about the way to determine the charging rate for the variable management fee which was within the 0-8% range, in particular, whether such fee would be waived when HKDL made a financial loss as in FY15 and FY16.

C for T responded that the calculation of HKDL’s management fees was fully linked to the resort’s performance, i.e. EBITDA. Given that HKDL’s performance in the past few years was better than that in FY16, the amount of management fees for FY16 was, therefore, smaller than that for previous years.