2001-based Manpower Projection for Tourism up to 2007
Government of the Hong Kong Special Administrative Region June 2003
2001-based Manpower Projection for Tourism up to 2007
Economic Analysis Division, Financial Services and the Treasury Bureau in collaboration with
Education and Manpower Bureau and Census and Statistics Department
Government of the Hong Kong Special Administrative Region June 2003
Manpower projection for tourism up to 2007
Introduction
This report supplements the main report on “Manpower Projection to 2007”, by providing a more detailed analysis and projection of manpower requirement in the tourism sector. The format adopted herein is broadly similar to that of the main report, consisting of an overview of the major features and development trends in the tourism sector, quantitative projection of manpower requirement, and a summary of survey feedback from the employers and employees concerned.
Major features of the tourism sector
2. Hong Kong is one of the most popular tourist destinations in the Asia Pacific region(1). The tourism industry has undergone sustained strong growth over the years, in terms of both visitor arrivals and visitor spending. There exist quite a number of underpinning factors. For instance, Hong Kong has an excellent aviation network linking up with all the major cities around the globe.
It is also the principal gateway to the mainland of China (the Mainland).
Moreover, Hong Kong’s free port status allows it to be one of the most favourite shopping centres in the world.
3. Tourism activities are wide-ranging and diverse, straddling across many different sectors in the economy. Based on the target customers, these activities can be broadly delineated into two main groups, i.e. tourist-oriented services, including hotels, travel agents, airline ticket agents, and outbound and inbound passenger transport; and tourist-peripheral services, including the retail trade, restaurants, and other personal services like cultural and recreational services.
Yet the delineation has become increasingly blurred in the more recent years, due to progressive expansion in the scope of business of the two groups to both visitors and local residents, in face of keen competition in the market.
(1) According the World Tourism Organisation, Hong Kong was one of the top 15 tourist destinations in the world in 2001.
- 2 -
4. The Government has been adopting a proactive and multi-pronged strategy to promote tourism in Hong Kong. This is by way of improving the existing infrastructure and developing new ones, upgrading the standards of service providers, facilitating entry of visitors, and stepping up support to the Hong Kong Tourism Board. New initiatives and continuing efforts under this strategy are of much help in enhancing Hong Kong’s attractiveness as a major tourist hub in the region.
Development trends
5. Within the tourism sector, inbound tourism is a major growth area, as manifested partly by the surge in the number of total visitor arrivals averaging at 8% per annum over the past decade. Through its close links with a wide variety of services in the local economy, the growth in inbound tourism has generated considerable spill-over effects on the rest of the economy.
6. An analysis of visitor arrivals by source reveals that since 1994, the Mainland has overtaken Taiwan to become the largest source of incoming visitors for Hong Kong. In 2002, Mainland visitors accounted for more than two-fifths (specifically, 41%) of total incoming visitors, up significantly from only 14% in 1992. The increase was particularly pronounced in 2002, owing to abolition of quota under the Hong Kong Group Tour Scheme in January 2002(2). For all visitors from Asia taken together, they accounted for more than four-fifths (specifically, 82%) of the total in 2002. This differed from the situation a decade ago, when Taiwan was the largest single source of visitors with a share of 20%, and visitors from Asia as a whole had a share of 72% (Annex 1).
(2) As from 1 January 2002, the quota of 1 500 a day set under the Hong Kong Group Tour Scheme is abolished, so as to facilitate more Mainland visitors to come to Hong Kong.
Also, the number of Mainland travel agencies licensed to organise tours to Hong Kong is henceforth increased substantially, from 4 to 528.
Chart 1 : Visitor arrivals by source
1992 2002
United States 1 001 000
(6.0%)
Japan 1 395 000
(8.4%)
Southeast Asia 1 593 000
(9.6%) Taiwan 2 429 000
(14.7%) Mainland of China
6 825 000 (41.2%)
Others 3 323 000
(20.1%) United
States 694 000
(8.7%) Japan
1 324 000 (16.5%)
Southeast Asia 1 236 000
(15.4%)
Taiwan 1 640 000
(20.5%)
Others 1 967 000
(24.5%)
Mainland of China 1 149 000 (14.3%)
7. Outbound tourism has also expanded strongly. Reflecting this, the number of Hong Kong resident departures leaped from 28.9 million in 1992 to 64.5 million in 2002, or by an average of 8.3% per annum (Annex 2). The Mainland has been the most popular destination for outbound travel, as indicated below :
¾ Resident departures to the Mainland (predominantly to Guangdong Province) has exhibited the fastest growth over the years. This was boosted by a host of factors, including geographical proximity, cultural affinity, social relation, travel convenience and cost attraction.
In 2002, resident departures to the Mainland constituted 86% of the total outbound trips, distinctly up from the 74% in 1992. This was followed by resident departures to Macau and to South and Southeast Asia, with respective shares of only 6% and 4%.
- 4 -
Chart 2 : Hong Kong resident departures by destination
1992 2002
Macau 5 247 000
(18.1%) South and
Southeast Asia 934 000
(3.2%) Taiwan
271 000 (0.9%)
Others 1 032 000
(3.6%)
Mainland of China 21 461 000
(74.1%)
Mainland of China 55 648 000
(86.2%)
Macau 4 182 000
(6.5%) South and Southeast Asia
2 422 000 (3.8%) Taiwan 538 000 (0.8%) Others 1 749 000
(2.7%)
¾ Most of the trips to the Mainland for private purpose were destined for the Pearl River Delta region, predominantly Shenzhen, for relaxation, shopping, entertainment, personal care, etc. The average spending per trip in Guangdong, at $540 in 2002, was considerably less than that elsewhere in the Mainland, at $2,880. Overall, Hong Kong residents spent about $26 billion in the Mainland in 2002, amounting to 4% of private consumption expenditure in Hong Kong in that year (Annex 3).
Chart 3 : Spending of Hong Kong residents going to Guangdong Province for private purpose in 2002
Lodging and meals (57%)
Shopping (13%) Entertainment, transportation and
other services (30%)
8. Taking inbound and outbound tourism together, a total of 103 600 persons were directly engaged in the tourism sector in 2001, representing 3.4% of the total employed population. Of these 103 600 persons, 80 500 persons or 77.7% were engaged in inbound tourism (Annex 4).
Chart 4 : Employment in tourism by constituent activity in 2001
Inbound tourism- retail trade
(26.5%)
Total employment in tourism : 103 600
Inbound tourism- hotels and boarding houses
(20.3%)
Inbound tourism- restaurants
(18.8%)
Inbound tourism- cross boundary passenger services
(5.7%) Inbound tourism- other personal services
(6.4%) Outbound
tourism (22.3%)
- 6 -
Projection of manpower requirement in the tourism sector up to 2007
9. Projection of manpower requirement has been done for some selected economic sectors and domains up to 2007, based on statistical models fitted to the employment data and also expert views gathered from an earlier consultation exercise(3). For the tourism sector, manpower requirement is projected to increase from 103 600 in 2001 to 146 400 in 2007, representing an average annual growth of 5.9%, much exceeding the annual growth averaging at 1.0% projected for overall manpower requirement in the economy(4) (Annex 5).
10. The projected manpower requirements pertaining to inbound tourism and outbound tourism are shown below :
¾ For inbound tourism, manpower requirement is projected to be on an uptrend, rising from 80 500 in 2001 to 118 900 in 2007, or at an average annual rate of 6.7%. This is mainly based on the premise that the number of visitors from the Mainland will continue to have a solid growth over the medium term, consequential to further relaxation of outbound travel in the Mainland and better facilitation of visits by Mainland residents to Hong Kong, as well as induced by more tourist attractions in Hong Kong, including in particular the Hong Kong Disneyland theme park to be opened in 2005. Visitors from the rest of the region and from further afield are also expected to rise further (Annex 6).
¾ For outbound tourism, manpower requirement is also projected to increase further, from 23 100 in 2001 to 27 500 in 2007, or at an average annual rate of 2.9%. Local residents are expected to make more trips to the Mainland and elsewhere, in line with a general improvement in their living standard, thereby favouring more
(3) In the projection exercise, statistical models for 40 major economic sectors have been calibrated for projecting overall manpower requirements in Hong Kong, based on their respective employment data series from 1986 to 2001. The preliminary projection results thereby generated are then examined carefully and refined, taking into account the views of industry leaders, trade association representatives, academic experts, and relevant Government bureaux and departments as obtained from a consultation exercise conducted during June - September 2002.
For details, see “2001-based Manpower Requirement Projection by Economic Sector”, Census and Statistics Department.
(4) This includes all employed Hong Kong residents regardless of their place of work, and excludes foreign domestic helpers.
outbound travel, as well as further intensification of business links with the Mainland.
11. Analysed by occupation category, manpower requirement in the tourism sector is expected to increase extensively across all the major groups.
Reflecting increased demand for frontline service staff, services workers and shop sales workers are projected to go up by an annual average of 6.6% over 2001-07, slightly faster than the average annual growth of 5.9% projected for overall manpower requirement in the sector (Annex 7). As a result, the share of this group of workers in the total is expected to rise from 50.5% in 2001 to 52.3% in 2007. The increases projected for managers and administrators and for associate professionals are even faster, by an annual average of 8.3% and 10.2% respectively over the same period, owing to greater demand for personnel with better skills and education for raising operational efficiency and service quality. The shares of these two groups of workers are therefore also expected to move up, to 7.1% and 10.3% respectively in 2007, from 6.2% and 8.2% in 2001.
12. Analysed by educational attainment, considerably faster growth in manpower requirement is projected for workers with postgraduate, sub-degree and matriculation education, at an annual average of 10.9%, 17.9% and 12.1%
respectively over 2001-07 (Annex 8). In consequence, the shares of these three groups of workers is expected to increase to 0.8%, 3.9% and 9.9% respectively in 2007, from 0.6%, 2.1% and 7.1% in 2001. As to workers with secondary education and below, the respective manpower requirement is projected to have a relatively moderate growth, leading to a fall in their share from slightly more than four-fifths in 2001 to about three-quarters in 2007.
13. Statistical models apart, two single-equation econometric models are also calibrated for projecting manpower requirement in the tourism sector, with one model for inbound tourism and another for outbound tourism (Annex 9). The projection results likewise point to a faster growth in manpower requirement for inbound tourism than for outbound tourism. Manpower requirement in inbound tourism is related to the number of incoming visitors. On the other hand, manpower requirement in outbound tourism is more related to the income of local residents. Taking inbound tourism and outbound tourism together, the econometric models project an average annual increase of 4.2% in manpower requirement for the entire tourism sector over 2001-07, which is somewhat slower than that of 5.9% as derived from the statistical model-based projection.
- 8 -
Feedback from the establishment survey on business environment, manpower requirement and training needs in respect of tourism
14. In the third quarter of 2002, the Census and Statistics Department conducted an establishment survey(5) on business aspirations and training needs, upon Hong Kong’s economic restructuring and China’s accession to the World Trade Organisation (WTO). Establishments falling into the following six industry groups are deemed to be within the tourism sector :
¾ Hotels and boarding houses
¾ Travel agents and airline ticket agents
¾ Air passenger transport
¾ Retail trade
¾ Restaurants
¾ Other personal services
Amongst these industry groups, the first three (collectively referred to as Category A) are considered to be more closely related to tourism, while the remainder (Category B) are less directly involved(6).
15. The major feedback concerning future business environment for the tourism sector is given below :
¾ On business prospects, 26% of the establishments surveyed in Category A were optimistic about the business outlook up to 2007, with 5% being “very optimistic”. On the other hand, 28% of them held a pessimistic view about the medium-term prospects, with 6%
being “very pessimistic” (Annex 10).
For the establishments surveyed in Category B, a smaller proportion of them at 10% were optimistic, whereas a much larger proportion at 40% were pessimistic.
(5) The survey successfully enumerated some 4 200 establishments to collect their views on manpower requirements and training needs in Hong Kong over the next five years, amidst further structural change in the economy, as induced by rapid advances in information technology and e-commerce, globalisation and liberalisation of trade and investment, China’s accession to WTO, and closer economic integration between Hong Kong and the Mainland. The response rate attained was 90%.
(6) It is estimated that about 2 400 establishments participating in the survey were in Category A and about 62 100 establishments were in Category B, employing some 60 000 and 537 500 persons respectively, as at mid-2002.
¾ On business turnover, 28% of the establishments in Category A predicted a sustained growth over the next five years, with 3%
anticipating even a “significant increase”. On the other hand, 32%
of them envisaged a contraction, with 18% projecting a “significant decrease” (Annex 11).
Amongst the establishments in Category B, 47% foresaw a reduction in business turnover, while only 6% predicted an increase.
¾ On investment projects in the Mainland, only 3% and 2%
respectively of the establishments in Category A and Category B had undertaken such projects (Annex 12).
¾ On new business opportunities generated from China’s accession to WTO, 35% of the establishments in Category A expected more business opportunities to emerge as a result, while only 10% of the establishments in Category B thought likewise (Annex 13).
¾ On business environment in Hong Kong, China’s accession to WTO was perceived by the establishments in both Category A and Category B as a mixed blessing, bringing opportunities as well as challenges in the coming years. They generally expressed greater concern over the following : “face keener competition from enterprises in the Mainland”, “need to better understand the market and changes in investment environment in the Mainland” and “more companies to relocate business operations to the Mainland”
(Annex 14).
¾ In order to cope with changes in business environment, over two-fifths of the establishments in Category A were inclined to adopt the following measures (Annex 15) :
• increase the use of IT within the company (49%);
• focus on the core business and reduce the peripheral business with lower value-added content (47%);
• upgrade the capability of the workforce on technology and language skills (45%); and
- 10 -
• upgrade the skills of existing staff (45%).
Over one-fifth of the establishments in Category B also intended to pursue the second to fourth measures above. In addition, they would strive to “restructuring of organisation and/or business process to stay competitive” and “diversify the business of the company”.
16. On future manpower requirement and training needs, the establishments surveyed had the following feedback :
¾ For the establishments in Category A, future manpower requirement was expected to shift more towards higher educational attainment, as reflected by increases in shares for persons with matriculation and first degree education, yet decrease in share for persons with secondary education and below, between 2002 and 2007 (Annex 16).
For the establishments in Category B, the share for persons with upper secondary education, along with the shares for persons with matriculation and first degree education, was expected to increase between 2002 and 2007.
¾ Analysed by occupation category, modest increases in shares were envisaged for clerks and professionals amongst the establishments in Category A, whereas decreases of varying magnitude in shares were projected for all the other occupation categories (Annex 17).
By comparison, the occupation mix for the establishments in Category B was expected to exhibit a steadier pattern.
¾ On training plans and budget, the establishments surveyed had the following response :
• Amongst the establishments in Category A, 21% had training plans and 16% had training budget for their staff. The corresponding proportions for the establishments in Category B were lower at 9%
and 5% (Annex 18).
• Analysed by occupation category for the establishment in Category A, managers and administrators were preferred to have their management skills enhanced. For associate professionals
and for clerks and for service workers and shop sales workers, the focus of training should preferably be geared to language skills.
For craft and related workers, enhancement of job-specific skills was deemed to be important. For the remaining occupation categories, the desire was for further improvement in interpersonal and intrapersonal skills for the workplace (Annex 19).
A broadly similar feedback was obtained from the establishments in Category B, except for managers and administrators, professionals and associate professionals whose interpersonal and intrapersonal skills for the workplace, IT skills and management skills were also considered to be in need of improvement.
• As regards mode of training, self-learning was most preferred, followed by in-house training and extra-mural courses for the establishments in Category A. Similar results were observed for the establishments in Category B (Annex 20).
Feedback from the household survey on employment concerns and training needs in respect of persons engaged in the tourism sector
17. In the third quarter of 2002, the Census and Statistics Department had separately conducted a thematic household survey on employment concerned and training needs of the local workforce(7). The tourism-related trades and services were likewise categorised into two main groups, viz. Category A (closely related to tourism) and Category B (less closely related to tourism). The following feedback is relevant to persons engaged in the tourism sector :
¾ On perceived prospects of the sector, 45% of the persons engaged in Category A trade/services were optimistic about the prospects for the next five years, anticipating either a moderate or fast growth. On the other hand, 32% predicted a slower growth, 17% zero growth, and 7%
even a contraction in business (Annex 21).
(7) The survey successfully enumerated some 8 000 households. Within each successfully enumerated household, all economically active persons were interviewed to collect information on their aspirations as well as their employment concerns and training needs over the medium term in face of structural change in the economy. The response rate of the survey was 71%.
- 12 -
The persons engaged in Category B trades/services seemed to be relatively less optimistic, with 24% anticipating fast or moderate growth in the coming five years, and 41% expecting no growth or else contraction.
¾ On challenges/problems faced, “corporate downsizing” was most commonly cited by the persons engaged in Category A trades/services (with a share of 44%). This was followed by “keen competition amongst companies within the sector” (33%), “cost reduction (including salary/wage cuts)” (30%), and “contraction of business”
(27%) (Annex 22).
These challenges/problems were also widely cited by the persons engaged in Category B trades/services, yet with a greater proportion of them expressing concern over “contraction of business”.
¾ When asked about whether they had been affected by the prevalence of corporate restructuring, 23% of the persons engaged in Category A trades/services replied in the affirmative. Amongst those affected, 47% indicated that they had faced “increasing work pressure”, 38% “salary/wage cuts”, and 32% “longer working hours”
(Annex 23).
For the persons engaged in Category B trades/services, a slightly larger proportion (25%) indicated that they had been so affected, with relatively more of them being hit by “salary/wage cuts” and “longer working hours”.
¾ On possession of job-specific skills, 98% and 94% respectively of the persons engaged in Category A and Category B trades/services claimed to have sufficient/very sufficient job-specific skills to cope with the current job requirements (Annex 24).
¾ On training needs, 19% of the persons engaged in Category A trades/services had attended job-related training/retraining courses arranged by their employers in the past 12 months, while 8% had attended job-related training/retraining courses on their own initiative.
The corresponding proportions were lower for the persons engaged in Category B trades/services, at 7% and 5% (Annex 25).
¾ 18% of the persons engaged in Category A trades/services and 12% of those in Category B trades/services had plans to attend job-related training/retraining courses in the coming 12 months.
---
Annex 1
Visitor arrivals by major source
Number of visitors Average annual rate of change Major source of visitors 1992 1997 2002 1992-97 1997-2002 1992-2002
(’000) (’000) (’000) (%) (%) (%)
Mainland of China 1 149 2 364 6 825 15.5 23.6 19.5
(14.3) (21.0) (41.2)
Taiwan 1 640 1 920 2 429 3.2 4.8 4.0
(20.5) (17.0) (14.7)
Southeast Asia 1 236 1 459 1 593 3.4 1.8 2.6
(15.4) (12.9) (9.6)
Japan 1 324 1 624 1 395 4.2 -3.0 0.5
(16.5) (14.4) (8.4)
United States 694 861 1 001 4.4 3.1 3.7
(8.7) (7.6) (6.0)
Australia/New Zealand 304 374 405 4.2 1.6 2.9
(3.8) (3.3) (2.4)
United Kingdom 314 370 380 3.3 0.6 1.9
(3.9) (3.3) (2.3)
Others 1 348 2 301 2 538 11.3 2.0 6.5
(16.8) (20.4) (15.3)
Total 8 011 11 273 16 566 7.1 8.0 7.5
Notes : ( ) Figures in brackets represent % shares in the totals.
Figures may not add up exactly to the total due to rounding.
Annex 2
Hong Kong resident departures by destination
Number of Hong Kong resident departures abroad
Average annual
rate of change Major destination 1992 1997 2002 1992-97 1997-2002 1992-2002
(’000) (’000) (’000) (%) (%) (%)
Mainland of China 21 461 33 678 55 648 9.4 10.6 10.0
(74.1) (80.9) (86.2)
Macau 5 247 4 170 4 182 -4.5 0.1 -2.2
(18.1) (10.0) (6.5)
South and Southeast Asia 934 1 711 2 422 12.9 7.2 10.0
(3.2) (4.1) (3.8)
North Asia# 417 623 774 8.4 4.4 6.4
(1.4) (1.5) (1.2)
Taiwan 271 363 538 6.0 8.2 7.1
(0.9) (0.9) (0.8)
Australia/New Zealand 128 227 223 12.1 -0.3 5.7
(0.4) (0.5) (0.3)
Europe 188 329 347 11.8 1.0 6.3
(0.7) (0.8) (0.5)
United States 152 227 187 8.4 -3.8 2.1
(0.5) (0.5) (0.3)
Others 148 278 218 13.5 -4.7 4.0
(0.5) (0.7) (0.3)
Total 28 945 41 605 64 540 7.5 9.2 8.3
Notes : (#) This includes Japan and South Korea.
( ) Figures in brackets represent % shares in the totals.
Figures may not add up exactly to the total due to rounding.
Annex 3
Expenditure of Hong Kong residents travelling to the mainland of China for private purpose
Travel in package tour mode in 2002
Travel in non-package tour mode in 2002
All modes of travel in 2002 Average expenditure per
person-trip ($) in :
Guangdong Province 880 520 540
Outside Guangdong Province
3,040 2,710 2,880
Mainland as a whole 1,720 590 690
Total consumption
expenditure ($Bn) in :
Guangdong Province 1.8 17.5 19.3
Outside Guangdong Province
3.9 3.2 7.1
Mainland as a whole 5.6 20.7 26.3
Share of total consumption expenditure on private trips to the Mainland in private consumption expenditure (%)
0.8 2.9 3.7
Annex 4
Employment in the tourism domain*
Number of persons engaged# Average annual growth rate
1991 1996 2001 1991-96 1996-2001 1991-2001
(%) (%) (%)
Tourism domain 109 300+ 130 700+ 103 600 3.7 -4.6 -0.5
(4.1) (4.5) (3.4)
Within which :
(a) Inbound tourism 86 700+ 104 300+ 80 500 3.8 -5.1 -0.7
Retail trade 22 700 31 600 27 500 6.8 -2.8 1.9
Hotels and boarding houses
29 000 30 700 21 000 1.2 -7.3 -3.1
Restaurants 16 100 26 900 19 500 10.7 -6.2 1.9
Cross-boundary passenger transport
12 400+ 8 500+ 5 900 -7.2 -7.2 -7.2
Other personal services 6 500+ 6 600+ 6 600 0.2 0.2 0.2
(b) Outbound tourism 22 500+ 26 400+ 23 100 3.2 -2.7 0.2
Travel agents and airline tickets agents
15 900 20 000 16 800 4.6 -3.4 0.5
Cross-boundary passenger transport
6 600+ 6 500+ 6 300 -0.5 -0.5 -0.5
c.f. Total employment in the economy (net of foreign domestic helpers)
2 682 700 2 925 200 3 029 400 1.7 0.7 1.2
Notes : (*) This refers only to persons directly engaged in the tourism domain. The tourist-related sectors, through their linkage with a wide variety of other sectors in the local economy which do not have direct interface with tourists, have also indirectly induced additional employment opportunities.
(#) Figures for 1996 and 2001 are based on the “resident population” approach, while those for 1991 are based on the former “extended de facto population” approach.
(+) Imputed figures.
( ) Figures in brackets represent % shares in total employment of the economy.
Figures may not add up exactly to the total due to rounding.
Source : Composite Employment Estimates, Census and Statistics Department.
Annex 5
Projected manpower requirement for tourism in 2007
Actual employment
in 2001
Projected manpower requirement
in 2007 Change in 2007 over 2001
Number Number Number % change
Average annual %
change
Tourism 103 600 146 400 42 800 41.3 5.9
Of which :
(a) Inbound tourism 80 500 118 900 38 400 47.8 6.7
Retail trade 27 500 44 400 16 900 61.6 8.3
Hotels and boarding houses
21 000 27 000 5 900 28.2 4.2
Restaurants 19 500 32 500 13 000 66.8 8.9
Cross-boundary passenger transport
5 900 6 900 1 000 16.8 2.6
Other personal services 6 600 8 200 1 600 23.8 3.6
(b) Outbound tourism 23 100 27 500 4 400 19.0 2.9
Travel agents and airline tickets agents
16 800 21 300 4 400 26.4 4.0
Cross-boundary passenger transport
6 300 6 200 -100 -0.9 -0.2
c.f Total employment in the economy (net of foreign domestic helpers)
3 029 400 3 222 700 193 300 6.4 1.0
Note : Figures may not add up exactly to the total due to rounding.
Source : 2001-based Manpower Requirement Projection by Economic Sector, Census and Statistics Department.
Annex 6
Projection of manpower requirement for inbound/outbound tourism in 2007
Outbound tourism
50 000 60 000 70 000 80 000 90 000 100 000 110 000 120 000 130 000
98 99 00 01 02 03 04 05 06 07
Year
Number of employed persons
Act ual figure Projected figure
16 000 18 000 20 000 22 000 24 000 26 000 28 000 30 000
98 99 00 01 02 03 04 05 06 07
Year
Number of employed persons
Actual figure Projected figure
Inbound tourism
Main points
z Despite keen competition from some other Southeast Asian economies as a regional hub for tourism and conference facilities, Hong Kong will still possess considerable comparative advantage over its competitors in respect of flight connection, convenient location and infrastructure facilities.
z According to a report published by the World Tourism Organisation, about 56.55 million visitors will visit Hong Kong in 2020.
z Yet should there be direct links between Taiwan and the Mainland, this would reduce Hong Kong’s intermediary role in the future.
z The attraction of Hong Kong Disneyland to Mainland visitors may dwindle, if another Disneyland is to be built in Shanghai.
z Development in the tourism industry in Macau and the Pearl River Delta (PRD) will attract manpower from Hong Kong (manpower outflow to Macau/PRD estimated at around 3-5%).
z To establish and promote Hong Kong as Asia’s premier international city and a world-class destination for leisure and business visitors, continuous efforts are required to :
- create new attractions - diversify tourist interests
- provide more hotels to accommodate various target groups - maintain high standard of services
- ensure a constant flow of events/themes and marketing campaigns - keep a constant stream of trade fairs and conferences
- enhance transport links with the Mainland
Projection methodology
• With tourism being closely related to a number of economic sectors, including the retail trade, hotels, restaurants, cross-boundary passenger transport, and other personal services, manpower requirement in tourism cannot be projected using a single statistical model. Rather, it is extracted from the model-based projection made to the relevant economic sectors, based on the shares of tourism-related employment in those sectors over the past years.
Proportions of tourism-related trades to relevant economic sectors
Historical proportions (%)
Proportion of 1998 1999 2000 2001
Assumed proportion in 2007 (%) Inbound tourism
Retail trade :
"Inbound tourism" to retail trade 10.1 10.4 11.0 11.9 18.6 Hotels and boarding houses :
"Inbound tourism" to hotels and boarding houses 74.0 73.6 72.2 72.6 79.6 Restaurants :
"Inbound tourism" to restaurants 8.9 8.7 8.9 9.8 15.5
Cross boundary passenger services :
"Inbound tourism" to land transport, water transport and air transport
2.7 2.3 2.2 2.3 2.4
Other personal services :
Travel agents and airline ticket agents :
"Inbound tourism" to services incidental to transport 2.4 1.6 1.2 1.2 1.6 Domestic transport :
"Inbound tourism" to land transport and water transport 1.9 2.0 2.0 2.1 2.0 Convention and exhibition:
"Inbound tourism" to business services 0.1 0.1 0.1 0.1 0.1 Others :
"Inbound tourism" to education services and research institutes; medical & health services; sanitary services;
other community and social services; motion pictures and other entertainment services; other sports, cultural
& recreational services; barber and beauty shops; and other personal services.
0.2 0.2 0.2 0.2 0.3
Outbound tourism
Travel agents and airline ticket agents :
“Outbound tourism” to services incidental to transport 42.6 37.6 38.8 37.4 39.1 Cross boundary passenger services :
"Outbound tourism" to land transport, water transport and air transport
2.3 1.9 2.0 2.4 2.2
Projection after incorporating expert views and judgement
Relevant
economic sector
Projected manpower requirement of economic
sector concerned
in 2007
Assumed proportion to
economic sector concerned
in 2007
Projected manpower for
tourism in 2007 (%)
A. Inbound tourism
(a) Retail trade Retail trade 239 100 18.6 44 400
(b) Hotels and boarding houses
Hotels & boarding houses 33 900 79.6 27 000
(c) Restaurants Chinese restaurants and non-Chinese restaurants
209 600 15.5 32 500
(d) Cross boundary passenger transport
Land transport, water transport and air transport
287 400 2.4 6 900
(e) Other personal services (i) Travel agents and
airline ticket agents
Services incidental to transport
54 400 1.6 900
(ii) Domestic transport
Land transport and water transport
257 700 2.0 5 300
(iii) Convention and exhibition
Business services 261 800 0.1 300
(iv) Others Education services and research institutes; medical
& health services; sanitary services; motion pictures and other entertainment services; other sports, cultural & recreational services; barber and beauty shops; and other personal services
540 100 0.3 1 800
B. Outbound tourism (a) Travel agents and
airline tickets agents
Services incidental to transport
54 400 39.1 21 300
(b) Cross boundary passenger transport
Land transport, water transport and air transport
287 400 2.2 6 200
Annex 7
Projected manpower requirement for tourism in 2007
by occupation category
Actual employment
in 2001
Projected manpower
requirement in 2007 Change in 2007 over 2001
Number % share Number % share Number % change
Average annual %
change Managers and
administrators 6 500 6.2 10 400 7.1 3 900 61.0 8.3
Professionals 1 000 1.0 1 600 1.1 500 50.3 7.0
Associate professionals 8 500 8.2 15 100 10.3 6 700 78.9 10.2
Clerks 15 700 15.1 17 900 12.3 2 300 14.7 2.3
Service workers and shop
sales workers 52 300 50.5 76 600 52.3 24 300 46.4 6.6
Craft and related workers 3 000 2.9 3 700 2.6 800 25.6 3.9
Plant and machine operators
and assemblers 6 200 5.9 6 700 4.6 500 8.5 1.4
Elementary occupations 10 500 10.2 14 300 9.8 3 800 36.3 5.3
Overall 103 600 100.0 146 400 100.0 42 800 41.3 5.9
Note : Figures may not add up to exactly to the total due to rounding.
Source : 2001-based Manpower Requirement Projection by Occupation Category and Educational Attainment within Economic Sector, Education and Manpower Bureau.
Annex 8
Projected manpower requirement for tourism in 2007
by educational attainment
Actual employment
in 2001
Projected manpower
requirement in 2007 Change in 2007 over 2001
Number % share Number % share Number % change
Average annual %
change
Postgraduate 600 0.6 1 100 0.8 500 85.9 10.9
First degree 7 100 6.8 11 700 8.0 4 700 66.0 8.8
Sub-degree 2 100 2.1 5 700 3.9 3 600 168.3 17.9
Technician 2 500 2.4 4 000 2.8 1 500 60.8 8.2
Craft 300 0.3 400 0.3 100 40.7 5.9
Matriculation 7 300 7.1 14 600 9.9 7 200 98.5 12.1
Upper secondary 36 700 35.5 49 300 33.7 12 600 34.4 5.0
Lower secondary and below 46 900 45.3 59 400 40.6 12 500 26.7 4.0
Overall 103 600 100.0 146 400 100.0 42 800 41.3 5.9
Note : Figures may not add up exactly to the total due to rounding.
Source : 2001-based Manpower Requirement Projection by Occupation Category and Educational Attainment within Economic Sector, Education and Manpower Bureau.
Annex 9
Econometric model for projecting
manpower requirement in tourism up to 2007
Model structure
Based on the actual data input for 1991-2001, two single-equation models are calibrated for projecting the manpower requirements in inbound tourism and in outbound tourism respectively. By reference to a priori reasoning and revelation from the test statistics, the following two models are chosen :
log EMINBt = 0.446 log VISITORt + 0.502 log PCSPENDt
(3.07) (1.90)
R2 = 0.8707 R2 = 0.8384 DW = 1.450
log EMOUTBt = 3.591 + 0.555 log EMOUTBt-1 + 0.077 log PCGDPt
(5.54) (9.40) (2.06)
- 0.213 DUMt (-13.79)
R2 = 0.9758 R2 = 0.9654 DW = 2.154
Note : ( ) Figures in brackets represent the t-statistics of the respective regression coefficients.
where EMINBt = manpower requirement in the inbound tourism sector in period t EMOUTBt = manpower requirement in the outbound tourism sector in period t VISITORt = total number of incoming visitors in period t
PCSPENDt = per capita visitor spending in period t
PCGDPt = per capita GDP at current market prices in period t
DUMt = a dummy variable to account for the fall-off in employment in the outbound tourism sector in 1998 and 1999
Assumptions
2. The input assumptions adopted for the various explanatory variables are summarised below :
(a) The total number of incoming visitors is assumed to have a trend growth rate at 9% per annum during 2002-07, slightly faster than the average for the preceding five years.
(b) The level of per capita visitor spending in the coming years is assumed to maintain broadly the level as in 2001.
(c) Per capita GDP at current market prices is assumed to grow by around 2%
per annum during 2002-07.
Projection results
3. The projection results are summarised below :
Manpower requirement in :
Actual average annual growth
rate during
Projected average annual growth
rate during
1991* 2001* 2007+ 1991-2001 2001-07
(%) (%)
Tourism 109 300 103 600 132 400 -0.5 4.2
Of which :
Inbound 86 700 80 500 106 100 -0.7 4.7
Outbound 22 500 23 100 26 300 0.2 2.2
Notes : (*) Actual/imputed figures.
(+) Projected figures.
Annex 10
Business prospects over the next 5 years in view of
Hong Kong’s economic restructuring and China’s accession to WTO - Tourism
Category A (closely related to tourism) Number of establishments
Degree of optimism ：
Size of
establishment*
Very
optimistic Optimistic
Neither optimistic
nor
pessimistic Pessimistic
Very pessimistic
No
comment Total
Small 91
(4.7)
291 (15.0)
793 (40.9)
511 (26.4)
143 (7.4)
109 (5.6)
1 937 (100.0) Medium-sized 13
(4.0)
151 (45.5)
126 (38.0)
10 (3.0)
0 (0.0)
32 (9.5)
332 (100.0)
Large 7
(5.1)
64 (48.8)
39 (30.0)
0 (0.0)
0 (0.0)
21 (16.1)
130 (100.0)
Overall 111
(4.6)
505 (21.1)
958 (39.9)
521 (21.7)
143 (6.0)
161 (6.7)
2 400 (100.0)
Category B (less closely related to tourism) Number of establishments
Degree of optimism ：
Size of
establishment*
Very
optimistic Optimistic
Neither optimistic
nor
pessimistic Pessimistic
Very pessimistic
No
comment Total
Small 70
(0.1)
4 665 (8.5)
21 858 (39.9)
18 032 (32.9)
4 922 (9.0)
5 298 (9.7)
54 844 (100.0) Medium-sized 22
(0.4)
1 295 (22.2)
2 818 (48.4)
1 342 (23.0)
162 (2.8)
188 (3.2)
5 826 (100.0)
Large 86
(6.0)
295 (20.5)
621 (43.2)
366 (25.5)
29 (2.0)
41 (2.8)
1 438 (100.0)
Overall 178
(0.3)
6 254 (10.1)
25 297 (40.7)
19 740 (31.8)
5 113 (8.2)
5 526 (8.9)
62 109 (100.0)
Notes : (*) Establishments are categorised into small, medium-sized and large enterprises according to the number of persons engaged. For establishments in the non-manufacturing sector, those employing less than 10 persons are classified as small enterprises, 10-49 persons as medium-sized enterprises, and 50 persons and more as large enterprises.
( ) Figures in brackets represent % shares in the respective row totals.
Annex 11
Impact of Hong Kong’s economic restructuring and
China’s accession to WTO on business turnover over the next 5 years - Tourism
Number of establishments
Impact on business turnover Significant
increase
Some increase
No change
Some decrease
Significant decrease
No
comment Total Category A :
83 (3.5)
593 (24.7)
793 (33.1)
341 (14.2)
428 (17.8)
161 (6.7)
2 400 (100.0)
Category B : 366 (0.6)
3 444 (5.5)
23 516 (37.9)
16 466 (26.5)
12 749 (20.5)
5 569 (9.0)
62 109 (100.0)
Note : ( ) Figures in brackets represent % shares in the respective totals.
Source : Report on 2002 Establishment Survey on Manpower Training and Job Skills Requirements, Census and Statistics Department.
Annex 12
Investment in the mainland of China - Tourism
Number of establishments
Whether having investment in the mainland of China
Yes No Not specified Total
Category A : 69 (2.9)
2 226 (92.8)
105 (4.4)
2 400 (100.0)
Category B : 1 056
(1.7)
60 236 (97.0)
816 (1.3)
62 109 (100.0)
Note : ( ) Figures in brackets represent % shares in the respective totals.
Source : Report on 2002 Establishment Survey on Manpower Training and Job Skills Requirements, Census and Statistics Department.
Annex 13
New business opportunities brought about by China’s accession to WTO - Tourism
Number of establishments
Whether expecting new business opportunities
Yes No Not specified Total
Category A : 831 (34.6)
1 405 (58.5)
164 (6.8)
2 400 (100.0)
Category B : 6 001
(9.7)
50 649 (81.5)
5 459 (8.8)
62 109 (100.0)
Note : ( ) Figures in brackets represent % shares in the respective totals.
Source : Report on 2002 Establishment Survey on Manpower Training and Job Skills Requirements, Census and Statistics Department.
Annex 14
Implications for Hong Kong’s business environment over the next 5 years upon China’s accession to WTO
- Tourism
Major areas of concern Number of establishments
Category A Category B Face keener competition from enterprises in the
mainland of China
1 696 (70.7)
35 822 (57.7) Need to better understand the market and changes
in investment environment in the mainland of China
1 652 (68.8)
34 760 (56.0)
More companies to relocate business operations to the mainland of China
1 360 (56.7)
34 847 (56.1) Hong Kong's middleman role to diminish 1 053
(43.9)
28 479 (45.9) Benefit from increase in business opportunities
upon liberalisation of the Mainland market
997 (41.5)
21 502 (34.6) Face keener competition from overseas companies 978
(40.7)
24 623 (39.6) More inducement to conduct business in the
mainland of China upon more objective and transparent rules and regulations
973 (40.6)
28 333 (45.6)
Hong Kong's middleman role in provision of services to strengthen further
912 (38.0)
21 050 (33.9)
Note : ( ) Figures in brackets represent % shares in the total number of establishments engaged in the respective categories.
Source : Report on 2002 Establishment Survey on Manpower Training and Job Skills Requirements, Census and Statistics Department.
Annex 15
Measures to be taken over the next 5 years to cope with
Hong Kong’s economic restructuring and China's accession to WTO - Tourism
Measure Number of establishments
Category A :
Increase the use of IT within the company 1 176
(49.0) Focus on the core business and reduce the peripheral
business with lower value-added content
1 132 (47.2) Upgrade the capability of the workforce on
technology and language skills
1 083 (45.1)
Upgrade the skills of existing staff 1 080
(45.0) Category B :
Focus on the core business and reduce the peripheral business with lower value-added content
18 684 (30.1)
Upgrade the skills of existing staff 16 749
(27.0) Restructuring of organisation and/or business process
to stay competitive
14 622 (23.5)
Diversify the business of the company 13 767
(22.2) Upgrade the capability of the workforce on
technology and language skills
12 966 (20.9)
Note : ( ) Figures in brackets represent % shares in the total number of establishments engaged in the respective categories.
Source : Report on 2002 Establishment Survey on Manpower Training and Job Skills Requirements, Census and Statistics Department.
