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It’s all coming together for Hong Kong tourism: More lift from the airlines, new cruise facilities to as the public awakes to the possibilities of cruise vacations, and dramatic growth of the middle class.
The vast majority of Hong Kong’s visitors come from mainland China, but as Hong Kong emerges as a major cruise destination and attraction for sophisticated travelers seeking a venue where East meets West, the Hong Kong Tourism Board turns to video to attract travelers throughout the planning process.
Skift caught up with Bill Flora, the Los Angeles-based U.S. director for the Hong Kong Tourism Board, who discussed these and other trends.
Skift: How’s 2014 shaping up so far for Hong Kong tourism and what are you doing differently this year than what you’ve done previously?
Bill Flora: The year 2014 is shaping up to being a really good year and one of the reasons for that is we’re going to have a 14% increase in air capacity to Hong Kong. That will provide the opportunity for many more people to go. In terms of what we are doing, we are now in the second year of having our new cruise terminal at Kai Tak. That was launched last year mid-summer. It is designed by Sir Normal Foster, and it was essentially designed with two things in mind.
Number one, to be the world’s foremost cruise terminal, but even beyond that the reason Sir Norman Foster was brought inais we wanted to add another piece of iconic architecture to the Hong Kong skyline. The cruise terminal certainly does that. But what we are seeing in cruise is that I think Hong Kong has a really bright future. And, for 2014 we are seeing that our cruise calls, because of the additionaly capacity from Kai Tak, are going to be up about 52% to 53%.
The other thing we just launched at Cruise Shipping Miami is a partnership with Taiwan called the Asia Cruise Fund. We’ve established a budet to help incentivize the major cruise lines to both develop new itineraries and to have more calls to Hong Kong and Taiwan ports.
The third reason our cruise future is really bright is the reason all the major cruise lines are eyeing Hong Kong is the massive growth potential from mainland China as it gets to discover cruising as a major vacation option. When you look at cruise penetration in North America it’s at about 3.3%. And, in Asia by and large and in mainland China it’s at one half of 1%. So there is a huge opportunity for cruise growth in Asia and a lot of sources are saying that by 2030 about 65% of the world’s middle class will be in China so there are a lot of factors that lead to the cruise market in mainland China and Hong Kong kind of exploding over the next few years.
Skift: What countries are you focusing on in 2014 as far as source markets go? Are there any trends there?
Flora: When you look at it in general about 70% of the worldwide visitation to Hong Kong is from mainland China. In 2014 one notable fact is that Hong Kong is the world’s most-visited city. In 2013, about 54.3 million people visited Hong Kong, and that was about a 11% increase versus 2012. Long-haul markets like the U.S. and European markets continue to be very important. Not just for the number of people they deliver but because of the demographic quality and high-spending consumers that are delivered from long-haul markets.
Skift: In your role, you are actively trying to beef up the long-haul market from the U.S.?
Flora: I’m responsible just for the U.S. When we look at the U.S. market, last year we had visitation of about 1.1 million to Hong Kong so it’s a pretty large base. We are expecting probably about a 5% or more increase in 2014. We are finding that Hong Kong offers two things that upscale Americans are really looking for. The first is just sophistication and being able to enjoy the finest. And, the second thing is cultural authenticity. So when you combine those two things, and the unique fusion that Hong Kong offers — East versus West, old versus new — it is a very compelling destination for U.S. consumers.
Skift: What are some of your most effective marketing channels in terms of reaching visitors from the U.S. and elsewhere?
Flora: We tend to focus a great deal on media that affluent consumers consume, and especially in the digital area. One of the notable statistics now is that about 90% of affluent travelers consume online video on a monthly basis so we are very active in the online world especially in producing and creating our own sophisticated content on Hong Kong and helping to distribute it.
Skift: You mentioned online video. Are there any trends in trying to figure out the return on investment from those sorts of things?
Flora: We look at it in terms of how we can maximize our reach or our total impressions for consumers who are going to see our online video. From that we don’t have any perfect math to yield what the closing rate will be, but we do know being able to expose people to video on Hong Kong is one of the most compelling things we can do.
The other interesting thing about online video is that it effectively reaches people through all parts of the travel purchase process, starting at the top when they are becoming aware and they are deciding where they are going to go, and also at the bottom when they are shopping and making the final decision, and are trying to learn more about that destination.
Skift: Does the same type of video work through all of those different phases of the travel cycle?
Flora: It can work through all different stages, but it’s obviously better to get a little bit more specific and provide a wider range of things that can done in Hong Kong as people are getting a little more toward the end of the purchase process.
Skift: And has the rift between China and Japan over those dispute islands impacted Hong Kong tourism?
Flora: There was a short-term effect in terms of visitation from Japan to Hong Kong but that has levelled off over time. We are not seeing a huge effect right now.
Skift: Anything you’d like to add?
Flora: May 15 to 18 Hong Kong will have its second Hong Kong Art Basel. We are the third Art Basel fair following Switzerland and Miami. We are expecting about 60,000 people to visit the Hong Kong Exhibition and Convention Center. There will be art from about 250 to 300 galleries around the world. The really interesting thing about this Art Basel and why is it is different from the others is the incredible duality of western contemporary art coming to the east. China and eastern contemporary art is probably the hottest on earth right now. It is a great showcase for tourism and Asian contemporary art coming to Hong Kong.