What does tourism do for Hong Kong?

February 27th, 2014 atam Posted in Culture, General | 1 Comment »

Have you ever wondered how it’s come to pass that a developed economy has to rely on an industry that low-income economies typically exploit to generate revenue?

There are places in the world where the people have few skills but there is plenty of white sand, archaeological relics or beautiful scenery, so tourism becomes the national income generator of choice. The irony in Hong Kong is that, for a place that prizes education so highly, there aren’t many skills here either.

In Germany and Japan, workers who work in hi-tech, ultra-clean manufacturing plants are regarded as, not “blue collar” workers, but part of the middle class. They undergo vigorous training and are respected for their skills. They are also paid accordingly. Here in Hong Kong, even though we don’t know how to fix anything that breaks down, we look down on the technicians who come to our rescue as “manual workers”. Such is the perception of any job that calls for manual skills that parents all want their offsprings to get a degree, or two, and sit in a nice office pushing paper. It’s a real cultural problem.

What happens when the universities only train up youngsters to push paper and the thousands whose intelligence is not geared for office work have only one option, in the form of the Institute of Vocational Education, to turn to?

Jobs that call for skills go begging. Those with the skills are getting on and there are few successors in sight. With employers unwilling to pay a wage that recognises the skills involved, young people are even less inclined to train up. That leaves only jobs that don’t require many skills – like tour guides, salespeople, theme park attendants, etc.

When a government chooses to milk the tourism sector for revenue rather than invest in its people, the result is a widening wealth gap and worsening prospects for the future sustainability of an economy. Here’s what happens:

  • Capital assets such as hotels and so-called tourist attractions funnel money into the hands of the rich. Where the corporations involved are foreign-owned, that money leaks straight out of Hong Kong
  • Shops catering to tourists funnel money into the hands of landlords while small shopkeepers who’d make up the lower rungs of the middle class are driven out by high rent
  • Tension rises as locals whose needs, which were catered to by the small shopkeepers, find it increasingly tough to afford the inflated prices of everything
  • Luxury shops split their hefty income between the landlords and the overseas headquarters of the luxury brands; all Hong Kong gets are the income of the salespeople, who don’t acquire any long-term skills that would enable them to earn a better, more stable income

Every government announcement of new projects these days comes with an estimate of the number of job opportunities created, but not all jobs are created equal. Yes, there are a handful of people making nice money out of tourism, but they’re not the low-skilled, poorly paid people employed by the sector.


One Response to “What does tourism do for Hong Kong?”

  1. Timothy Ho Says:

    According to the statistics, the tourism industry’s contribution to GDP of Hong Kong is only 4-6%. Not as vital as most people claimed.

    We also need to bear in mind that all developed countries aim high income earners as their target tourists.

    With the decrease of spending per inbound tourist, HKSAR government should focus on enhancing the quality (spending) per tourist instead of quantity.

    The impact to control or reduce the quantity of tourist (especially from mainland China) is over-exaggerated. One of the main reasons why the retail rent is so high is due to the expected revenue generated from the real property. If the expectation is lower, the rent will be lower which means less money will go into the pocket of big developers who are ruling HKSAR. That’s it.

    The minimum wage in HKSAR is only a small portion of the total cost. The main cost is RENT.

    The high volume and low spending level of inbound tourist is the force behind the “lack of labour” which leads to the import of labour and followed by the reduction of income of HKSAR resident.

    Hong Kong is a mature economy and shouldn’t be chasing high growth because it will push the assets prices up and reduce the margin of return. It’s simply economics. But it has been distorted by the stakeholders.

    Don’t fall into the same trap like the 85,000 homes and 200,000 mainland Chinese will come to HK statements made by previous CEO Tung Chee-hwa.

    The contribution of tourism has been greatly exaggerated.

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