|Hong Kong, Macau & China performance Q1, 2014.|
Monday, 12th May 2014
Source : Daniel J Voellm & PuReaNae Jang ~ HVS Hong Kong
Hong Kong received 54.3 million visitors in the year 2013, including 14.4 million visitors in the fourth quarter alone, reflecting 9.0% year-on-year (YOY) growth for the quarter.
This growth was driven by an 11.1% YOY increase of 10.6 million visitor arrivals from mainland China, accounting for 73.7% of total visitor arrivals.
The higher number of Chinese visitors in the fourth quarter was attributable to the National Day Golden Week in October and the appreciation of Chinese Renminbi against the Hong Kong dollar. The Malaysian market posted the highest YOY growth of 17.2%, aided by the country’s booming economy and the appreciation of its currency.
Among the top five source markets, only the US slowed, recording a decline of 1.9%.
The Japanese market, remarkably, posted growth for the first time since the third quarter of 2012; for the past four quarters, Japanese visitor arrivals registered declines in excess of 20% every quarter, following the political fallout with China and the depreciation of the yen.
The South Korean market, meanwhile, recorded 8.0% growth, while the European market also showed signs of recovery, with Russia and France notably recording 8.5% and 6.9% growth, respectively. In Oceania, Australia declined by 6.1% YOY, while the New Zealand market grew by 2.9% YOY.
The share of overnight visitor arrivals slid from 48.0% in the fourth quarter of 2012 to 46.3% over the same period in 2013.
More Chinese visitors stayed overnight, with numbers increasing by 4.9% YOY.
Furthermore, visitor arrivals from Macau and Taiwan grew 6.4% and 5.8% YOY, respectively. Notably, Malaysian overnight visitor arrivals to Hong Kong rose by 23.2%, supported by increased total visitor arrivals. Japanese overnight visitor arrivals, meanwhile, started to recover, posting growth of 10.4%.
The India and Singapore markets respectively recorded 12.7% and 9.3% YOY growth in overnight visitor arrivals, fuelled by increased consumer spending power.
While the timing of a full recovery of Japanese visitor arrivals to Hong Kong is uncertain, it is clear that the traditional high-spending Japanese market can provide further support for the Hong Kong tourism industry.
Among long-haul markets, all European markets, apart from the UK, registered single-digit growth, while the US and Canada decreased by 2.2% and 9.1%, respectively.
HONG KONG OVERNIGHT VISITOR ARRIVALS
According to the Hong Kong Tourism Board (HKTB), the Hong Kong market is set to register additional supply growth of approximately 12,200 hotel rooms between 2013 and 2019, with 76.2% of this new supply in non-core locations.
While supply continues to be introduced in core areas, such as Tsim Sha Tsui and ‘Kowloon South’, much growth will come from fringe locations such as Kwai Chung and Tsuen Wan, Kowloon Bay and the New Territories.
Increased supply in these fringe locations will be supported by several expansion projects for the MTR network that are under way to improve accessibility across the city.
These projects include the West and South Island Line that will connect the western and southern part of Hong Kong Island to central areas, as well as the Sha Tin Central Link that will connect the New Territories to urban areas. The Sha Tin-Central Link is expected to be completed by 2020 and will allow visitors to travel directly from the Shenzhen border to Central, improving access to the city’s central business district.
In addition, in order to ensure sustainability of visitor arrivals growth and further induce demand, Hong Kong is constructing a number of large-scale infrastructure and revitalisation projects, namely the Kai Tak redevelopment, the Express Rail Link with Guangzhou and Shenzhen in West Kowloon, and the Hong Kong-Zhuhai-Macau Bridge.
The Kai Tak Development is a large-scale masterplan redevelopment project spanning over 320 hectares on the site of the former Kai Tak International Airport, which is the largest available land fronting Victoria Harbour. The project’s first component – a new cruise terminal − opened in October 2013 and while accessibility challenges remain, the terminal is expected to enhance the appeal of the Kowloon Bay side of the harbour.
The Guangzhou-Shenzhen-Hong Kong Express Rail Link will connect the three cities via a 142-km track. The travel time from the West Kowloon terminus to Guangzhou will be 48 minutes, and 12 minutes to Shenzhen’s CBD Futian. The proposed opening year of the Hong Kong section is 2015 and it will greatly enhance connectivity between Hong Kong and its mainland peer cities.
The Hong Kong-Zhuhai-Macau Bridge is among the largest infrastructure projects currently under development. At a budgeted cost of US$10.5 billion, plans are to connect the eastern (Hong Kong) and western (Zhuhai and Macau) banks of the Pearl River via a 50-km roadway link. This will cut travel time to less than 30 minutes (from Tung Chung) as compared to about one hour via ferry (from Central and Tsim Sha Tsui).
Growth in total visitor arrivals to Macau slowed in the fourth quarter of 2013, with figures increasing by only 1.9% to 7.4 million during the period.
Mainland China continued to drive the market, posting 4.4% YOY growth and accounting for 63.1% of total visitor arrivals.
The second-largest source market Hong Kong, which accounts for 22.5% of total source markets, registered a YOY decline of 3.7%.
Visitors from elsewhere in Asia-Pacific, with the exception of Japan, the Philippines and Thailand, increased − albeit in single-digits.
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