IVIS Country Analysis – Hong Kong

HONG KONG

114,112 Arrivals in the United States

Loss of 21,297 over 2002, -15.7%

28.7% of all Hong Kong Long-Haul Travelers

-7.7% over 2002

SUMMARY

Outbound travel from Hong Kong declined 1.4 percent in 2003 due to the outbreak of Severe Acute Respiratory Syndrome (SARS) that put the region into a standstill in early 2003. This decline was mostly in short-haul intraregional travel, thus Hong Kong still generated 7.3 million world arrivals. Outbound travel from Hong Kong has quadrupled in the past decade, lead by short-haul intraregional travel. Long-haul travel from the country did not fare so well in 2003, declining 8.7 percent in 2003 to its lowest level this decade. In 2003, the number of arrivals to the United States from Hong Kong also declined 15.7 percent, another low for the decade. The result was a long-haul market share (MSI) for the U.S. of only 28.7 percent from Hong Kong. This is a decline of 7.7 percent over 2001, also the MSI's lowest level this decade.

Hong Kong's economy grew despite SARS in 2003. Real GDP expanded 3.2 percent over 2002. Yet, real private consumption was flat (-0.1%) percent year-on-year, likely due to SARS in addition to a third consecutive year of falling consumer prices (-2.6%). The unemployment rate also jumped to 7.9 percent, more than twice as high as one decade ago.

The Hong Kong dollar is pegged to the U.S. dollar, thus it remained at the same value against the U.S. dollar as the year before. The Hong Kong dollar declined 4.6 percent against other world currencies, in tandem with the U.S. dollar.

The United Kingdom was the leading country destination for long-haul travel from Hong Kong in 2003 with more than one third of the market (33.4%). Canada was not far behind, earning 31.5 percent of the long haul market from Hong Kong. The United States with 28.7 percent of the market came in third, and South Africa was a distant fourth with 3.1 percent of long-haul travelers from Hong Kong in 2003. While the U.S. and the UK both lost share, Canada and South Africa both gained share

Source: Global Insight

Regionally, the Europe claims more than one third (34.1%) of the long-haul travel market from Hong Kong. As a region, the U.S. is second with 28.7 percent this market. Africa (3.1%) and the Middle East (2.6%) are a distant third and fourth. Africa and the Middle East both gained share while the U.S. and Europe both lost share of the long-haul travel market from Hong Kong in 2003.

Source: Global Insight