Hong Kong as a Tourist Destination, Priority Market Targets, and Processes of Destination Choices - Case Study Example

TABLE OF CONTENTS TABLE OF CONTENTS i EXECUTIVE SUMMARY ii 1.0 INTRODUCTION ii 2.0 HONG KONG AS A TOURIST DESTINATION iii 2.1 Hong Kong Destination Marketing Organisation (DMO) iii 2.2 Hong Kong Tourism Board Work Plan for 2012-2013 iv 2.3 Tourist Arrival Statistics iv 3.0 PRIORITY MARKET TARGETS vi 3.1 Selection of Market Targets vi 3.2 HBTK understanding of motivation of the target markets vii 4.0 PROCESSES OF DESTINATION CHOICES viii 4.1 Determining Levels of Satisfaction viii 4.2 Internal Marketing at HKTB ix 4.3 Competitive Destinations to Hong Kong ix 4.4 Competitive Advantage of Hong Kong over Competitors x 5.0 LIST OF REFERENCES xi 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. 1.0 INTRODUCTION Hong Kong has been described as the premier destination for various tourism forms. It is actually one of Asia’s top tourism destinations. It has a unique blend of Eastern and Western lifestyles as well as the ancients and modern ways of life thus drawing large numbers who tourists wishing to experience the rich cultural heritage that the destination boasts of. The tourism industry is not only vocationally inclined but also attracts large number of individuals who attend meetings, Incentives, Conventions and exhibitions (MICE). There has been a generally increase in visitor arrival and growth in the tourism industry within Hong Kong. This growth can be attributed to proper marketing strategies as per the work plan laid down by the Hong Kong Tourism Board (HKTB) mandated to market Hong Kong as a premier global tourism destination (Top Tourist Destination, 2012). Most tourism destinations have exemplary developed due to proper work plans and marketing strategies. Usually, Destination Marketing Organisations (DMOs) are set up to promote targeted tourism destinations across the globe. This has over the years proved fruitful from the observed growth in the Tourist Destinations that have implemented this strategy. In fact, nearly all the famous world tourism destinations have embraced this strategy hence the current growth in this industry. Hong Kong as a major tourist destination In Asia has not been left out. Hong Kong Tourism Board (HKTB) was set up to solely market Hong Kong globally as a premier tourist destination. The Work Plan not only gives more information regarding Hong Kong with regards to the number of visitors annually and the challenges facing this industry but also some recommendations to overcome these challenges. 2.0 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. 2.1 Hong Kong Destination Marketing Organisation (DMO) The Hong Kong Tourism Board (HKTB) is a statutory body set up to promote Hong Kong globally as a world-class tourist destination. HKTB, established in 2001 under the Hong Kong Tourism Board Ordinance (Cap. 302) is mandated to globally promote Hong Kong as a world class tourist destination and a leading international city in Asia. 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). 2.2 Hong Kong Tourism Board Work Plan for 2012-2013 This paper presents the work plan of the HKTB for 2012-13 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 Kong’s image as an international cosmopolitan and world-class travel destination. 2.3 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) 2011 2010 2009 The Americas 1,823 1,750 1,568 Europe, Africa and the Middle East 2,195 2,174 1,969 Australia, New Zealand and South Pacific 756 769 708 North Asia 2,307 2,208 1,823 South & Southeast Asia 3,752 3,501 2,885 Taiwan 2,148 2,165 2,010 Macau 843 780 671 World excl. China 13,824 11,634 - The Mainland 28,097 22,684 17,957 TOTAL 41,921 36,030 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 2010 Tourism Performance 2009 Tourism Performance Total Arrivals (’000) 41,921 36,030 29,591 Mainland (’000) 28,097* 22,684 17,957 Short-haul Markets (’000) 9,051* 8,654 11,634 Long-haul Markets (’000) 4,773* 4,692 Overnight Visitor Average Length of Stay (LOS) 3.6 nights* 3.6 nights 3.2 nights Overall Satisfaction Rating^ (max: 10 pt) 8.3 pt* 8.3 pt 8.3 pt Overnight Visitor Average Length of Stay (LOS) 3.6 nights* 3.6 nights Not Available Overnight Visitor Per Capita Spending (HK$) $7,333* $6,728 $5,770 Tourism Expenditure Associated to Inbound Tourism1 (HK$billion) $253.0* $210.0 $162.9 * Estimation as at Dec 2011 ^ Excluding same-day, in-town visitors Source: Hong Kong Tourism Board Work plan for 2011-12 and 2010-2011 3.0 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) (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. These include organizing cruise, promoting and educating the targeted retirees and families. These are among the two important 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. 3.1 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 3.2 HBTK understanding of motivation of the target markets According the traditional utility-maximizing theory of travel behaviour, individuals travel choice is dependent on each alternative utility relative to all alternatives’ utility. Set of possible choice will in this case influence decision. Decision also depends on the set of factors determining each alternative’s utility, each alternative’s factor value, and utility’s relative contributing factor. To consolidate Hong Kong’s image as a premier travel destination, the HKTB has intensified its efforts to promote quality tourism services in 2012-13: Strategies include enhancing Hong Kong’s 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 experience-based travel that combines entertainment and culture. 4.0 PROCESSES OF DESTINATION CHOICES Choice is defined as purchasing action’s motivation transformation (Buhalis, 2000). In this case, destination choice is made by evaluating alternatives. This is based on individual’s goals and preferences. Individual alternative criteria are used when evaluating tourist product (Moutinho, 1987). Consumer behaviour is influenced by individual’s internal and external factors. Internal determinants will include social and personal aspects while external determinants range from the travel agency confidence, overall alternative’s image, experience of previous travel, constraints limiting travel, and perceived risk degree. Individual travel behaviours is majorly influenced by reference groups, culture, family, subculture determining individual’s personality, learning, attitude, motivation, and social classes (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 2012-13. Apart from identifying and nurturing new visitor segments, the HKTB works more closely with the travel trade to devise new products and raise Hong Kong’s profile globally, so as to promote sustainable growth of Hong Kong’s tourism. 4.1 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 Kong-Taiwan-Japan-South Korea and Hong Kong-Hainan-Vietnam-Philippines itineraries. This will enable the board find out different visitor segments and markets preference and test. Also this will result into effective promotion and diversity of new products. HKTB also plans to carry out a series of stakeholder consultations with local industries, airlines, retailers, travel agencies, hotel management and owners, attraction operators, academia fraternity, and caterers of food and beverages. 4.2 Internal Marketing at HKTB As far as internal marketing is concerned, the “customer” remains to be the employee while the “job and benefits involved” is the product. This way, internal marketing can be explained as a process in which a given organisation achieves its societal commitments and objectives by effectively communicating its goals and through management of its employees (internal customers). 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. 4.3 Competitive Destinations to Hong Kong With Hong Kong tourism gradually moving into mainland China and other Asia’s emerging markets, maintaining the quality of services remains a great challenge. The following are the major competitors of Hong Kong as a Tourist destination 1. Mainland China 2. Macau 3. Singapore 4. Japan 5. Taiwan 4.4 Competitive Advantage of Hong Kong over Competitors It is basically evident that a nation’s competitiveness is a result of the competition among the companies within that nation. Development and maintenance of important assists and skills helps in achievement of competitive advantage. Strategies selection, assets exploitation competitive arenas, competitors’ assets neutralisation and skills also play a great role in achieving competitive advantage (Aaker 1989). The most comprehensive work embarked on by tourism researchers on general tourism competitiveness is that of Crouch and Ritchie (1989, 2000). So as to competitive, tourism development of a given destination must not only be sustainable, but also ecologically economic and cultural, political and social. HKTB has strategies for maintaining Hong Kong’s market presence, these measures include but not limited to: In 2011-12, the HKTB launched the ‘Hong Kong. Asia’s World City’ platform to showcase Hong Kong’s 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 Guangzhou-Shenzhen-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 Kong’s 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 multi-destination itineraries to the regional and international visitors. To pave way for the commissioning of the new cruise terminal at Kai Tak in mid-2013, 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 Kong’s 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 5.0 LIST OF REFERENCES Aaker, D., 1989. ‘Managing assets and skills: The key to a sustainable competitive Advantage’, California Management Review (winter), pp. 91–106. Buhalis, D., 2000. ‘Marketing the competitive destination of the future’, Tourism Management, vol.21, iss.1, pp.97-116.  Kumar, P., 2010. Marketing for hospitality and tourism. New Delhi: Tata McGraw Hill. Moutinho, L., 1987. ‘Consumer Behaviour in Tourism’, European Journal of Marketing, Vol. 21 iss.10, pp.5 – 44. PartnerNet Home Page. Available at Accessed on 07 August 2012. Ritchie, J.R.B & Crouch G.I., 2003. The competitive destination: a sustainable tourism perspective, CABI Publishing, Wallingford, UK. 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 d’Experts 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. Roger, L., 2003. Tourism management in South Africa. Johannesburg: Pearson Education. Top Tourist Destination. 2012. Hong Kong; Asia’s World City. Available at Accessed on 14 August 2012. Read More