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FIRST-QUARTER GROWTH REACHES 12.4% AS VISITOR ARRIVALS CONTINUE TO BOUNCE BACK

Hong Kong welcomed 1,297,219 visitors in March 2002, the second highest monthly total on record and an 11.8% increase compared with the same month in 2001. For the first quarter of the year, cumulative growth in arrivals now stands at 12.4%.

As in previous recent months, visitors from Mainland China were responsible for a lion's share of the increase, recording 41.1% growth in March. Encouragingly, however, there were also positive growth figures from Europe, Africa & the Middle East (+3.0%) and The Americas (+1.3%), suggesting that confidence is steadily returning to the long-haul markets. Arrivals from Australia, New Zealand & South Pacific showed a modest decrease of 0.5%.

Among the other short-haul markets, North Asia recorded 1.3% growth in March while South & Southeast Asia showed a small decline of 0.4%. Arrivals from Taiwan fell 5.0%, but this pre-dates full implementation of the electronic iPermit facility, which is expected to boost arrivals from this market in the coming months.

Announcing the first-quarter figures, Hong Kong Tourism Board (HKTB) Executive Director Clara Chong said that with three months' results now on hand, clear - and generally encouraging - trends were beginning to emerge. "We can see the long-haul markets moving steadily back into positive growth, a pattern we expect to continue in the coming months," she commented. "On the other hand, we can see mixed performances from other parts of Asia, closely related to prevailing economic conditions.

"The shining star, though, remains the Mainland China market. We knew that the abolition of tour group quotas and an increase in the number of licensed tour agents would boost the Mainland market substantially, but first-quarter growth of more than 40% exceeds our best expectations. We have also been encouraged to see a further surge in Mainland arrivals this last week, to coincide with the long May Day holiday," Ms Chong added.

Analysis by Markets, January to March 2002

A further 465,230 visitors in March brought total arrivals from Mainland China for the first quarter of 2002 to 1.39 million, a 38.7% share of all visitors to Hong Kong. This represents a 42.4% increase over the same period in 2001. With the number of agents licensed to offer Hong Kong tours now increased from four to 67, more packages are coming on to the market each month at attractive prices, and this is continuing to stimulate traffic.

Taiwan remained Hong Kong's second largest source market in the first quarter of the year, contributing 15.9% of all visitors. Its 569,785 arrivals, however, represent a small 0.9% decline compared with the first quarter of 2001, due mainly to the difficult economic climate in Taiwan. It is anticipated that the Hong Kong SAR Government's recent introduction of the iPermit electronic visa system will help re-energise this market from the second quarter onwards. Launched on 18 March and extended to four more airlines on 12 April, iPermit enables Taiwan residents to obtain Hong Kong visas in a matter of hours. The HKTB is already using this opportunity to step up its marketing of Hong Kong as a "fun weekend" destination.

Arrivals from North Asia totalled 451,665 in the first quarter, a 2.4% decrease. While Japan continues to prove a difficult market, in the face of a depressed economy, arrivals from South Korea have maintained the strong momentum they showed last year, increasing 18.1% in the first three months of 2002. March arrivals from South Korea were further boosted by a long public holiday at the beginning of the month and consumer interest in the HKTB's Hong Kong Flower Extravaganza event, jointly promoted across the country with Lotte Travel.
South & Southeast Asia recorded a 1.9% overall fall in first quarter arrivals, although there were wide variations in the performances of individual markets. Arrivals from The Philippines increased 16.6%, including a 30.0% surge in March, stimulated by some highly competitive packages on offer. Arrivals from India and Malaysia showed 11.2% and 9.1% growth respectively. On the other hand, Singapore (-4.8%), Thailand (-17.6%) and Indonesia (-22.1%) all showed negative growth in the first three months of 2002.

In the long-haul markets, The Americas recorded marginal negative growth of -0.8%, but there was an encouraging return to positive figures from the United States (+0.2%), where various joint marketing campaigns by the HKTB and trade or media partners are helping encourage US travellers to take long-haul vacations again.

First quarter results from Europe, Africa & the Middle East are even more encouraging, given the sluggish performance of this market for most of 2001. Arrivals grew 0.6% overall, spearheaded by France (+7.0%) and the United Kingdom (+2.2%). Two attractive new travel packages offered by Cathay Pacific - a combined Hong Kong-Vietnam itinerary and an "Escapades Hong Kong" package offered jointly with specialist agent La Maison de la Chine - are among factors helping to boost the French market.

Arrivals from Australia, New Zealand & South Pacific are 4.0% down overall compared with the first quarter of 2001, although New Zealand is currently showing 4.1% growth. March arrivals from New Zealand were particularly buoyant due to strong interest in the Rugby Sevens. Australia remains a more difficult market, not least because of reduced seat capacity on the Hong Kong route since the demise of Ansett Airlines last year.

Same-Day Visitors

During the first quarter of 2002, 35.2% of all visitors left for other destinations on the same day, compared with 34.4% in the same period of 2001 (Note: These figures only include travellers who passed through Hong Kong Immigration, not those who were solely transit passengers). Visitors most likely to stay for one night or longer were those from The Americas (81.2%), Australia, New Zealand & South Pacific (81.1%), and South & Southeast Asia (78.8%). In contrast, only 24.7% of those from Taiwan stayed overnight, as a significant proportion of Taiwan visitors are business people who continue by land to or from destinations in Southern China.

Hotel Occupancy

Hotel occupancy across all categories was 86% in March 2002 and stands at an average of 81% for the first quarter of the year, compared with 78% for the same period in 2001. Top category (High Tariff A) hotels have achieved average occupancy of 76% in the first quarter (2001: 78%) while those in the High Tariff B and Medium Tariff categories stand at 84% and 83% respectively (2001: 80% and 76%).

Note: Starting from January 2002, the HKTB's surveys have been extended to include data from 109 hotels and tourist guest houses accounting for some 36,300 available rooms, instead of the 91 former Hong Kong Tourist Association (HKTA) Member establishments that were surveyed previously. To ensure fair comparison, the 2001 figures shown above have been adjusted to include the equivalent data. Because of this, however, they may not coincide exactly with previously published figures for 2001.

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