Affordable offers are crucial to the success of Hong Kong’s mega events

Experts recommend putting together package tours together with tour operators.

Hospitality and tourism players are poised to fully benefit from Hong Kong’s boom in major events, provided they focus on offering value for money.

Shaman Chellaram, Senior Director of Hotel Advisory Asia at Colliers Hong Kongstressed that the stronger Hong Kong dollar, cheaper prices in other markets and more expensive airline tickets made the city “relatively more expensive”.

“As the number of price-conscious and experience-oriented travellers increases, we need to respond with value-for-money offerings,” Chellaram told Hong Kong Business.

Prudence Lai, consultant at the market research institute Euromonitor International, expressed a similar view, saying that “value tourism is the key to increasing value influence, not just quantity.”

Lai said communication and support from the government and the tourism association would help industry players promote value tourism in the city.

Yong Chen, Associate Professor at EHL Hospitality and Business School, recommends that catering establishments tailor their services to event participants in order to ensure that visitors to major events have a valuable stay.

“Tailored services may include providing up-to-date event information, transportation information and arrangements, as well as assisting guests with ticket booking and handling other logistical issues,” Chen said.

Hotels and other hospitality providers can also partner with event providers to create package holidays that include accommodation, meals and event activities for tourists.

“Such travel packages can not only enhance the overall attractiveness of the event, but also simplify tourists’ decision-making,” Chen added.

The tourists know

Another way for players to capitalize on these mega events is to understand the quality of visitors they will attract, said Dan Voellm, MRICS, CEO and co-founder of AP Hospitality Advisors.

Lai reiterated this idea, stressing that it is necessary for hospitality stakeholders to identify and assess the type of tourists and the primary activity zones that the events attract.

“For example, hotel and restaurant businesses on Hong Kong Island could benefit more directly from the events held at the Hong Kong Convention and Exhibition Centre. This could help hospitality businesses better plan their resources and capacities to cope with the potential surge in tourism from the major events,” Lai said.

Looking at specific events, she said that trade fairs and trade shows such as Jewellery & Gem WORLD Hong Kong and Cosmoprof Asia are likely to lead to an increase in overnight visitors.

Hong Kong is currently undergoing a transformation of its destination brand from a shopping paradise to a destination focused on sports and cultural tourism. This means that the government and tourism boards will be heavily focusing their resources and marketing campaigns on these events to attract and promote value tourism.

Cultural and sporting events such as the Clockenflap Music and Arts Festival and the Women’s U20 Lacrosse World Championship are also “important to watch and observe,” she added.

According to Chen, cultural, sports and other entertainment events usually attract large numbers of visitors and can also “extend the time visitors stay in the city because they require visitors’ participation.”

“Unlike business conventions, these events usually attract groups of visitors such as families and friends and can therefore further increase their spending in many areas of the hospitality industry,” Chen told Hong Kong Business.

However, business congresses remain important for Hong Kong, where MICE (meetings, incentives, conferences and events) tourism is a focus.

Lai stressed that the average expenditure per trip for MICE tourism visitors is higher than for leisure tourists.

Higher average spending per trip could also boost value tourism in Hong Kong, she said.

recreation

With the government planning over 100 MICE events in the second half of the year, Lai expects a significant increase in guest numbers and occupancy, leading to a positive recovery in the hotel and restaurant industry.

Chen said the major events also have an indirect impact on other industries. For example, upstream industries in Hong Kong such as manufacturing wholesale, consulting and financial services could benefit from suppliers and event organizers who need to purchase goods and services.

“As Hong Kong is a highly developed economy, tourist spending can easily spill over into other sectors through cross-sector transactions, which in turn can generate higher revenues across the economy than tourists’ direct spending on tourism and hospitality,” he stressed.

Chellaram, meanwhile, said the more than 210 major events planned by the government for 2024 are expected to attract about 1.7 million visitors, an average of about 8,095 visitors per event and a net expenditure contribution of $2,530 per person.

While the hospitality sector faces certain challenges, he believes that if mega events gain momentum, the city can increase hotel occupancy by 3 to 5 percent. With the right promotion of these events and cross-sector collaboration, Chellaram expects a slight uptick of 4 to 6 percent in the F&B sector as well.

marketing

Conversely, Voellm found that hardly any marketing measures were carried out abroad to individually promote these events.

“General marketing campaigns tend to have a less lasting impact than those for individual events,” he said.

Chellaram stressed that major events require international, regional and wider local marketing to “increase their visibility, really boost the economy and attract visitors”.

“To properly address this issue, greater collaboration between the public and private sectors is needed,” said the Colliers expert.

Beyond marketing, experts say the government should do more to improve venues’ access to accommodation and transportation.

Chen said this would give visitors more options and enrich their travel experience.

“The government can make alternative accommodation, such as Airbnb-like accommodation on the outskirts of the city, accessible through seamless transportation links. This arrangement would not only ease the supply burden of accommodation in the city center, but also provide opportunities for suburban-based businesses to flourish,” Chen said.

Diverse range of events

Voellm stressed that additional efforts are needed to maximize the industry’s benefit from major events, pointing out that while this is a noble endeavor, managing these peak periods can be challenging and can negatively impact the visitor experience.

Chen expressed a similar opinion, saying that hotels, restaurants and transportation companies may not be able to keep up with the increased demand during the events.

“The result is rising prices, which could not only deter visitors but also shorten their length of stay. Due to increased demand, services in restaurants, hotels and venues are likely to not be able to be provided as quickly as expected,” Chen said.

“Visitors may also experience other mishaps or service outages, resulting in an unsatisfactory experience and subsequent consumer complaints,” he added.

Voellm said that developing a calendar of events of different sizes would make more sense. “Of course, major events are a good PR measure, but the costs can sometimes be significantly higher,” he said.

“Hong Kong has always been known for its vibrancy, which has waned recently. Introducing smaller events would help to revive the enthusiasm. Macau hosts far more events than Hong Kong, so more creativity to differentiate the events from other destinations would be highly welcome,” he added.

Recognizing the economic importance of smaller events while attracting more major world-class international events will give a significant boost to the hospitality and tourism sector, noted Chellaram.

“It is crucial that we provide a higher level of service and an unforgettable experience,” he added.

Lai shared this view, saying that Hong Kong must not focus on a few rare major events, but must focus on a wide range of events throughout the year, even if they are of relatively small scale.

“The great variety and frequency of these events can not only lead to a large number of visitors, but also distribute demand more evenly over time, thus alleviating supply bottlenecks in the hospitality industry,” she said.