The Hong Kong Tourism Board announced last week that they were planning to give away 500,000 airline tickets worth HK$2 billion (US$254 million) to boost the city’s tourism industry, which Covid-19 restrictions had severely impacted. The Board’s executive director, Dane Cheng, said that the tickets were expected to be released early in 2023, as soon as all Covid-19 travel restrictions in Hong Kong were lifted. This paper will discuss the causes of this decision, and the potential impacts it may have on Hong Kong’s society and economy.
Hong Kongers desperate for a holiday and those interested in the bustling city from abroad may rejoice at this news. The announcement is a clear sign that the Hong Kong government is finally preparing to break free from the iron grip the coronavirus has had on the city for nearly three years. However, those concerned with the economic state of the town may worry whether or not this move has come too late. To provide an interpretation of this decision, I will explore its context before discussing how useful it may be for the authorities’ goal of boosting Hong Kong’s economy.
The 500,000 tickets
According to HK01 and the South China Morning Post, the Airport Authority Hong Kong had purchased a total of 500,000 airline tickets in 2020 from the Hong Kong-based airline companies Cathay Pacific, HK Express, and Hong Kong Airlines. Two years later, these tickets, worth HK$2 billion, are finally ready to be released to the public.
Dane Cheng said that the Tourism Board would be in charge of the project’s advertising campaign, which would target both inbound and outbound travelers. Cheng further stated that the campaign would target Asia and other nearby markets. Still, they would hold off on any primary operations in China until Chinese travel restrictions were also eased.
Why now? - Hong Kong’s Covid-19 policy in recent months
News of the ticket giveaways comes less than a month after the government lifted several Covid-19 restrictions, including the momentous decision to reduce the quarantine period for inbound travelers from 7 days in a hotel to 3 days of medical observation while allowing limited access to public venues. The new quarantine policy, called “0+3”, was initiated in response to the halting of several operations and events in the city by the responsible institutions, representing the most severe blow to Hong Kong’s already-troubled economy due to Covid-19 restrictions.
For example, the Hong Kong Association of Athletics Affiliates (HKAAA) had initially decided to cancel this year’s Hong Kong Marathon but reversed this decision days later and announced that they would be rescheduling the marathon to 12 February 2023 under “the Government’s full support.” In addition, VF Corporation, which is in charge of fashion brands The North Face, Timberland, and Vans, said it was moving its regional operations out of Hong Kong.
And now, the most recent addition to the growing list is British airline Virgin Atlantic, which said last Wednesday that it would stop operating in Hong Kong, quoting issues arising from the Ukraine war. While the leading cause of the move out from Hong Kong was the Ukraine war, they would likely not have chosen to cut the city out had they believed in its profitability. Hong Kong’s economic potential has declined so much that Virgin Atlantic decided to stop flying to Hong Kong after 30 years of service there.
Indeed, airline companies have had little reason to fly to Hong Kong compared to past years. In the first eight months of this year, the Asian hub received only 184,000 visitors, whereas a whopping 56 million were recorded in 2019. As one can see, Covid-19 had an unprecedented impact on Hong Kong’s tourism industry and the economy as a whole - and the giving away of 500,000 airline tickets aims to change that.
…But will the plan work?
While the decision to give away 500,000 airline tickets belonging to Hong Kong-based airline companies is a good one, its contingency upon the complete lifting of restrictions altogether means that struggling businesses will have to hold on a while longer to see the plans come into effect. While it seems like the end of coronavirus restrictions is near with the implementation of “0+3”, we must remember that Hong Kong’s Covid-19 policy is, like the rest of its administrative policies, tied to mainland China’s approach to the pandemic. And with Beijing remaining adamant on maintaining a Hong Kong, citizens should not be too hopeful that all Covid restrictions will be lifted anytime soon.
Should the tickets come into effect only after all travel limitations are lifted, Hong Kong will have a more challenging time competing with the other Asian countries this program specifically targets. This is because many other countries have had a head start in grabbing tourists, who cannot all afford to take more than one trip per holiday. For one, Japan’s reopening to independent travelers and lifting the daily arrival cap in September generated much discussion amongst Hong Kongers, for whom vibrant Japan is a hot spot for travel. Moreover, quarantine requirements for foreign arrivals were erased in South Korea in June, and the need to show a negative pre-departure Covid-19 test was also removed at the beginning of this month. With travel requirements being lifted in these two East Asian tourism giants, Hong Kong’s plan to open up travel in early 2023 seems like it could not come any later.
Furthermore, the tickets will likely not be distributed to mainland Chinese residents, according to Cheng’s statements. This dramatically takes away from the plan's success, as Chinese travelers have always formed a considerable proportion of tourists coming to Hong Kong. Prudence Lai, a senior analyst at market research firm Euromonitor International, told the BBC that while “The pre-Covid status of Hong Kong represents the market potential of a full recovery,” its recovery “is highly dependent on when mainland Chinese tourists will return, as mainland China contributes to more than half of Hong Kong’s inbound arrivals and travel receipts.”
Despite the flaws in the current plan, however, the policy is an excellent supplement to the current 0+3 quarantine policy because easing the quarantine period has mainly served to encourage outbound traveling without seeing a proportionate amount of inbound traveling. For many businesspeople and casual tourists, having limited freedom to move around Hong Kong for three days still poses an irritating obstacle that has continued to push them away from visiting the city. Therefore, the 500,000 tickets will hopefully be a giant magnet to attract these people to the once-bustling city.
In addition, the plan fits in well with other projects the government is undertaking to improve the tourism value of the city, such as the joining of the numerous harbourfront promenades and parks along the coastline of Hong Kong Island. People who have traveled to Hong Kong before will now have a greater incentive to revisit, and this will also encourage them to stay longer to see both old and new sights.
All in all, the Tourism Board’s decision to give away $2 billion worth of airline tickets to travelers in and out of Hong Kong may prove a meaningful one, indeed one that could kickstart Hong Kong’s struggling finances after three years of coronavirus-induced isolation. However, I worry that this plan will come slightly too late for the city, given that other popular tourist spots have already reopened to the public and have more resources to attract visitors. Though this is one of the best policies the government has announced since the gradual easing of Covid-19 restrictions, they will have to speed this process up for their ambitions to come into effect.
Image source: Christian Junker | Photography via Flickr
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