Because of the global financial meltdown, the total number of tourists visiting Hong Kong dramatically declined over the past year, said James Tien, chairman of Hong Kong Tourism Board.

While the total number of visitors from long-haul markets has shown improvement recently, he sounded a note of caution, saying the situation needs to be monitored very closely in the coming months.

Speaking to China Daily exclusively, Tien disclosed that the overall number of visitor arrivals in Hong Kong, from all markets, was 2.83 million in August this year, showing an increase of 19 percent over 2.38 million in July, and 5.8 percent over the same period last year.

The number of visitors from these long-haul markets, including the US and Europe, recorded an increase in August for the first time since the financial crisis, rising by 9 percent over the same period in 2008. The rebound came after a decrease of over 10 percent between January and July this year.

On the other hand, the number of mainland visitors decreased by 10 percent per month on average since May this year. "The financial tsunami was the major cause for the decline in the tourist arrivals from the US and Europe, because the people's spending power had shrunk as a result of their ailing economies," he analyzed.

"On the other hand," he noted, "China has been relatively unperturbed by the financial tsunami. However, mainland visitor arrivals have been dropping since May because of the outbreak of H1N1 swine flu in Hong Kong, as the mainland people are deterred by the disease prevention measures and are afraid of being locked up in the hotel for a week.

"The swine flu has had little impact on the decrease of long haul visitors perhaps they do not treat this as a serious problem. Before the swine flu broke out in Hong Kong, the volume of mainland visitors was increasing by more than 10 percent from January to April until it started to fall in May.

"Understandably, the government's quarantine and separation measures are meant to safeguard public health in Hong Kong, yet it has yielded negative impacts on tourism, leaving HKTB offices all over the world to answer numerous enquires about the swine flu situation in Hong Kong," he added.

Talking about the 'Golden Week' holiday from September 29 to October 6 for mainland citizens, he expects that mainland visitor arrivals will increase by 5 - 10 percent over last year, the reason being this year's golden week has eight days as the Mid-Autumn Festival also falls within this period.

Despite the projected gain, Tien retains a cautious outlook. "The number of long haul visitors increased by 9 percent in August 2009. But if we look carefully, we find that the August 2008 figure decreased by 18 percent over the same period in 2007, and so we are still 9 percent below the 2007 level," he said.

"It was because China, for security reason, tightened the issuance of inbound tourist visas during the Olympic Games in August last year, thus greatly reducing the number of foreign visitors from long haul markets.

"While we are happy for the rebound, the situation is not all that good if we find out the real reason. We have to wait and find out a clearer picture in the next few months," he said.

Similarly, as a great many mainland citizens remained home to watch the Olympic Games, the number of mainland people visiting Hong Kong was not too high in August 2008. Because of such a low base number, HKTB is not too excited about the 10 percent growth in August 2009.

In anticipation of tourist arrivals from the long haul markets, Tien guessed the US economy would remain sluggish and that it would take quite a long time for the global, US and Hong Kong economies to bounce back.

The latest jobless rate in the US was 9.6 percent in August 2009. "According to financial analysts and the banking sector, it will definitely rise beyond 10 percent by the end of the year," he said.

In his view, the severe unemployment problem, together with the banks' tightened credit card issue and debt recall polices, will affect greatly the spending power of the American people, as well as dampening their desire to travel to overseas destinations.

He said: "The weakened power of consumption of the American people also impacts the retail industry seriously. In a chain reaction, it affects the manufacturing and export of China. It also affects Hong Kong's service sectors in terms of import and export, shipping, transportation, insurance and banking services."

The other countries in Europe, including the UK, France and Germany, are faring no better.

He noted: "Our Financial Secretary (John Tsang) recently said the worst is over and we are seeing light at the end of the tunnel. But given analyses from all sources, I have the impression that he is overly optimistic. The best he is talking about is a mere L-shaped recovery, he said, meaning that "the road to recovery is rather long and who knows if it may slide again."

Regarding the mainland market, Tien said the question of day-trippers from the mainland still remains. Of the 17 million mainland visitors last year, about 40 percent did not stay overnight in Hong Kong and instead found accommodation across the boundary in Shenzhen.

"The reason is perhaps there are not many budget hotels rooms within the price range of $300 - $400 in Hong Kong," he said, noting that the large majority of the day-trippers came from the nearby Guangdong province.

He, however, noted the spending of the day trippers was not meager. "Their average spending is HK$2,100, knowing that shopping is their only mission in Hong Kong," he said. "Compared with the overnight visitors who spent about HK$5,600 over 3.5 nights on average, the spending power of the day-trippers is not low at all."

(HK Edition 10/02/2009 page2)