Table of Contents

Executive Summary ........................................................................................................ 1 Hong Kong as a Tourist Destination ................................................................................ 2 Destination Marketing Organisation (DMO) of Hong Kong .............................................. 2 DMO of Hong Kong Website ........................................................................................... 2 Legislative Council Panel on Economic Development Hong Kong Tourism Board Work Plan for 2012-2013 .......................................................................................................... 2 Tourist arrival Statistics ................................................................................................... 3 Priority Market Targets .................................................................................................... 4 Selection of Market Targets ............................................................................................ 5 HBTK understanding of motivation of the target markets ................................................ 6 Processes of destination choices .................................................................................... 6 Determining Levels of Satisfaction .................................................................................. 7 Internal Marketing at HKTB ............................................................................................. 8 Competitive Destinations to Hong Kong .......................................................................... 8 Competitive advantage of Hong Kong over Competitors................................................. 9 References .................................................................................................................... 11

Executive Summary

This report aims to identify a tourist destination in Asia pacific region and find the name of the official government endorsed destination marketing organization of the destination. Hong Kong has been chosen as the destination and its tourism board, Hong Kong Tourism Board (HKBT) official website used to gather information and statistics on its marketing strategy. The Work Plan has provided pertinent aspects about the aims of this study which included; priority target markets, tourist arrivals, tourist attractions, marketing strategy and others issues which have been discussed at length in this report. This report has also highlighted the challenges Hong Kong is facing as an attractive destination in the inevitable and healthy competition from other Asia- Pacific destinations, of note are Macau, Mainland China, Japan and Taiwan and indeed the manner in which HKBT has developed strategies to maintain Hong Kong as a destination of choice for travelers which this report has highlighted.

Hong Kong as a Tourist Destination

The tourist destination chosen for the purpose of this report is Hong Kong, it is one of the two special administrative regions of the People's Republic of China.

Destination Marketing Organisation (DMO) of Hong Kong

The Hong Kong Tourism Board (HKTB) is a statutory body set up to promote Hong Kong globally as a world-class tourist destination it was established in 2001 under the Hong Kong Tourism Board Ordinance (Cap. 302). Its core function is to promote Hong Kong globally as a leading international city in Asia and a world class tourist destination.

DMO of Hong Kong Website

The Hong Kong Tourism Board Home Page address is www.discoverhongkong.com; The HKTB launched a new PartnerNet in June 2012 to tighten its network with the travel trade and create new business opportunities. PartnerNet Home Page address is www. http://partnernet.hktourismboard.com

Legislative Council Panel on Economic Development Hong Kong Tourism Board Work Plan for 2012-2013 This paper presents the Work Plan of the Hong Kong Tourism Board (HKTB) for 201213 which outlines the elements HKTB is striving to create business opportunities for the tourism and related sectors by stimulating greater visitor spending .To achieve this objective, the HKTB has re-aligned market prioritisation and increased market investment to propel the growth of targeted source markets. Efforts have also been made to open up new visitor sources, which serve to diversify risks and reduce the impact of market fluctuations, as well as uphold Hong Kongs image as an international cosmopolitan and world-class travel destination.

Tourist arrival Statistics According to HKBT Work Plan, in 2011, Hong Kong received a record-high of 42 million visitors from around the world, a remarkable increase of 16.4% over 2010. Table 1 Arrival Statistics between 2009 and 2011 (000) The Americas Europe, Africa and the Middle East Australia, New Zealand and South Pacific North Asia South & Southeast Asia Taiwan Macau World excl. China The Mainland TOTAL 2011 1,823 2,195 756 2,307 3,752 2,148 843 13,824 28,097 41,921 2010 1,750 2,174 769 2,208 3,501 2,165 780 11,634 22,684 36,030 2009 1,568 1,969 708 1,823 2,885 2,010 671 17,957 29,591

Source: Hong Kong Tourism Board Work Plan for 2011-12 and 2010-2011

Table 2: Tourism Performance between 2009 and 2011 2011 Tourism Performance Total Arrivals (000) Mainland (000) Short-haul Markets (000) Long-haul Markets (000) Overnight Visitor 41,921 28,097* 9,051* 4,773* 2010 Tourism Performance 36,030 22,684 8,654 4,692 3.6 nights 3.2 nights 2009 Tourism Performance 29,591 17,957 11,634

Average 3.6 nights*

Length of Stay (LOS) Overall Satisfaction Rating^ 8.3 pt* (max: 10 pt) Overnight Visitor Average 3.6 nights* 3.6 nights Not Available 8.3 pt 8.3 pt

Length of Stay (LOS) Overnight Visitor Per Capita $7,333* Spending (HK$) Tourism Associated to Expenditure $253.0* Inbound $210.0 $162.9 $6,728 $5,770

Tourism1 (HK$billion)

* Estimation as at Dec 2011 ^ Excluding same-day, in-town visitors Source: Hong Kong Tourism Board Work plan for 2011-12 and 2010-2011

Priority Market Targets According to the HKTB Work plan, the priority markets they are addressing and doing marketing are segmented as follows (a) Mainland China(South China, Central China, East China, North China)
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(b) Short-haul Markets(Japan, Taiwan, South Korea, Singapore, The Philippines, Malaysia, Indonesia, Thailand) (c) Long-haul Markets(USA, Australia, United Kingdom, Canada, Germany, France) (d) Emerging Markets(India, Russia, The Middle East, Vietnam, The Netherlands) From the HKBT website they have shown these elements as there see and do

Highlight Attractions Events & Festivals Arts & Performance. Culture & Heritage Great Outdoors Tours & Walks Cruise

According to HKBT Work plan they will stimulate the cruise demand by consumers in South China. For instance, organize cruise promotion and education activities targeting retirees and families, two high-potential cruise visitor segments. From these factors the tourist board seems target art lovers, leisure travellers, Heritage Tourists,

Honeymooners, Cruise Tourism, conference and event tourism, Visiting Family and Relatives (VFR) Tourism

Selection of Market Targets

For marketing management purposes the total market is divided in segments, a process called segmentation. In tourism market segmentation and targeting is important, the strategy is to divide the present and the potential market on the basis of some characteristics and then concentrate marketing efforts to target markets(Kumar 2010,p. 283), HBTK has divided the total market into five segments mainly on the basis of place or origin of tourists, the reason could be that this market target offer the greatest opportunity in terms of; existing and future sales potential, scale of competition, successful marketing mix to attract tourists and cost factor involved in each segment.

As earlier implied HBTK has mainly used country, region and market area for market division, and people from the same area, people who share common elements in their lifestyles and culture might have common interests (Roger 2003, p. 53), this could have provided HBTK with a basis to identify the target markets

HBTK understanding of motivation of the target markets

According the traditional utility-maximizing theory of travel behaviour, the choices that individuals make about travel depend on the utility of each alternative relative to the utilities of all alternatives. Decisions depend, then, on the set of possible choices, the set of factors that determine the utility of each alternative, the values of those factors for each alternative, and the relative contribution of each factor to utility To consolidate Hong Kongs image as a premier travel destination, the HKTB has intensified its efforts to promote quality tourism services in 2012-13: Strategies include enhancing Hong Kongs image as a quality destination by using a platform dubbed Quality and Honest Hong Kong Tours Programme visitors experience in Hong Kong and instil diversity into the tourism products by the local travel trade to develop new products and increasing the number of promotional windows from six to 10 in 2011-12. To cater for travellers who trend show have shifted from sightseeing to experiencebased travel that combines entertainment and culture.

Processes of destination choices Choice has been defined as a transformation of motivation in purchasing action (Buhalis, 2000). The destination choice is made by alternative evaluation based on individual preferences and goals, while evaluation of tourist product is based on individual evaluative criteria (Moutinho, 1987).

Factors that influence consumer behaviour can be internal and external to the individual. Among the internal determinants are social and personal, while the external ones include confidence in the travel agency, the overall image of alternatives, previous travel experience, travel constraints, degree of perceived risk, etc. Among the major influences of individual travel behaviour are family, reference groups, social classes, culture and subculture that determine individuals personality, learning, motivation, perception (of alternatives) and attitudes (Moutinho, 1987).

To encourage customers to visit Hong Kong HKTB has indicated that it will invest prudently according to the market prioritisation and flexibly deploy its resources in 201213. Apart from identifying and nurturing new visitor segments, the HKTB works more closely with the travel trade to devise new products and raise Hong Kongs profile globally, so as to promote sustainable growth of Hong Kongs tourism.

Determining Levels of Satisfaction

Researching markets allows tourism boards and other organizations to gather a lot of data and information reflecting customer satisfaction, wants and needs, number of visits, profiles, characteristics, facilities, activities which are popular among the tourists and areas that need improvement. Once you have relevant statistics and information about customers, you will be able to make directed decisions and plans to satisfy customers and provide a better service.

According to HKBT as in 2010, visitor satisfaction remained at 8.3 points out of 10 points, while the average length of stay among overnight visitors stood at 3.6 nights in 2011. Overnight visitors from both Mainland China and the long-haul markets made the longest stay at 3.9 nights, also the same as in 2010.

HBTK according the work plan will conduct market study in collaboration with cruise operators and partnering ports on possible new cruise products, such as Hong Kong7

Taiwan-Japan-South Korea and Hong Kong-Hainan-Vietnam-Philippines itineraries, so as to find out the tastes and preferences of different visitor segments and markets and devise effective promotion of the new products

HKTB planning process also entails a series of formal consultation with stakeholders of the local industry, including travel agencies, airlines, hotel owners and management, retailers, food and beverage caterers, attraction operators, as well as academics

Internal Marketing at HKTB In the context of internal marketing, the employee is the customer and the product is the job and its benefits, internal marketing can be best described as the process by which an organization accomplishes its organizational objectives and societal commitments through effective communication of its goals and management of its internal customers (employees).

While information on whether HKBT performs internal marketing was scanty in the work plan they indicate that while conducting marketing promotions in the visitor source markets, they will strive to enhance its corporate governance, such as conducting regular audit reviews to ascertain compliance, ensuring stringent internal control, and regularly reviewing and further enhancing its financial policies and procedures.

Competitive Destinations to Hong Kong

As tourism in Hong Kong is gradually moving towards mainland China and the emerging markets in Asia, it will remain a challenge to maintain the quality of services. The following are the major competitors of Hong Kong as a Tourist destination 1. Mainland China 2. Macau 3. Singapore
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4. Japan 5. Taiwan

Competitive advantage of Hong Kong over Competitors The basic premise is that the competitiveness of a nation stems from companies within that nation. In order to achieve competitive advantage, the focus should be the development and maintenance of meaningful assets and skills, the selection of strategies and competitive arenas to exploit such assets and skills and neutralising of competitors assets and skills (Aaker 1989, p. 105). The most detailed work undertaken by tourism researchers on overall tourism competitiveness is that of Crouch and Ritchie (1989, 2000). To be competitive, a destinations development of tourism must be sustainable, not just economically and not just ecologically, but socially, culturally and politically as well. HKTB has strategies for maintaining Hong Kongs market presence, these measures include but not limited to: In 2011-12, the HKTB launched the Hong Kong. Asias World City platform to showcase Hong Kongs appeal as a world-class travel destination, including its international setting, cosmopolitan lifestyle, unique East-meets-West culture and great diversity of tourism attractions. As part of their expansion plans, Ocean Park and Hong Kong Disneyland are going to add further new facilities in 2012 and 2013 on top of those in 2011. Following the opening of the Guangzhou-Shenzhen section of the GuangzhouShenzhen-Hong Kong Express Rail Link in December 2011, visitors in Central China can travel even more conveniently to Hong Kong via Shenzhen. The new transport infrastructure will encourage more Mainland visitors to come to Hong Kong, and help enhance Hong Kongs position as a travel hub in the Pearl River Delta region.

In the past few years, the HKTB has established a close working relationship with Macau, as well as several Mainland provinces and cities, in promoting multidestination itineraries to the regional and international visitors.

To pave way for the commissioning of the new cruise terminal at Kai Tak in mid2013, the HKTB will raise its budget for cruise tourism promotion in 2012-13, with a view to further capturing the potential of cruise tourism and strengthening Hong Kongs position as a cruise hub in Asia.

All this mix of this strategies embodied in infrastructural development, creation of new products, enhancing of existing resources, partnering with competitors, use of Social media in promotional campaigns, tapping and investing heavily in established and emerging markets sets Hong Kong apart from the rest as a premier destination in Asia Pacific

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References Aaker, D. 1989, Managing assets and skills: The key to a sustainable competitive Advantage, California Management Review (winter), pp 91106 Buhalis, D., 2000, Marketing the competitive destination of the future, Tourism Management, vol.21, iss.1, pp.97-116. Moutinho, L 1987, Consumer Behaviour in Tourism, European Journal of Marketing, Vol. 21 iss.10, pp.5 44 Ritchie, J.R.B & Crouch G.I 1993,Competitiveness in International Tourism: A Framework for Understanding and Analysis, Proceedings of the 43rd Congress of the Association Internationale dExperts Scientifique du Tourisme, 17-23 October, San Carlos de Bariloche, Argentina, pp.23-71. Ritchie, J.R.B& Crouch G.I 2000, The Competitive Destination: A Sustainability Perspective, Tourism Management, vol.21, iss.1, pp.1-7. Ritchie, J.R.B & Crouch G.I 2003, The competitive destination: a sustainable tourism perspective, CABI Publishing, Wallingford, UK. Kumar, P 2010, Marketing for hospitality and tourism, Tata McGraw Hill, New Delhi Roger, L 2003, Tourism management in South Africa, Pearson Education, Johannesburg.

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