HONG KONG Feb. 11, 1998--The total number of visitor arrivals and tourism receipts for 1997, compared to the record year of 1996, showed a drop of 11.1% and 14.7% respectively, according to figures released today by the Hong Kong Tourist Association (HKTA).

ARRIVALS

Total arrivals for December 1997 reached 842,939, a drop of 26.3% over December 1996.  Arrivals for the whole year were 10.4 million, which, while down on the bumper year of 1996, were still higher than the total for 1995 (10.2 million).

In December alone, The Americas continued to show good growth, rising 8.4% over the same month in 1996.  Canada, in particular, registered an exceptional increase, up by 48.2%.  Arrivals from Australia, New Zealand  South Pacific were up by 6.4% for the month, while those from the mainland rose by 11.0%.

For the year as a whole, The Americas was the only major market region to have registered an increase, with total 1997 arrival up by 7.3% to just over one million.

The North Asian region, comprising Japan and South Korea, showed the heaviest fall in 1997, with arrivals down by 37.9% for the year. From Japan alone, arrivals fell by 42.5%, due primarily to the huge surge in arrivals from Japan in 1996, which created an unusually high base, as well as the worsening economic situation in Japan throughout 1997. Year-end arrivals from all other market regions declined by percentages ranging from 2.1% to 8.0%. The drop in arrivals from the mainland was, however, negligible, at just 0.6%, an indication that the market is again performing well following the lifting of outbound travel restrictions imposed during the handover
period.

RECEIPTS

Over the year tourism receipts fell in line with arrivals.  Total receipts for the year were HK$72.1 billion (US$9.24 billion).  Other reasons for the decline include the currency depreciation in Asia and a shortened length of stay by all visitors (down 3% to an average of 3.59 nights).  There was also a moderate decrease in per capita
spending of 4.6% to an average of HK$6,722 (US$861.80).

Mainland China was the largest contributor to visitor spending receipts, accounting for 22.3% of the total.  In second place was Taiwan (18.0%), followed by North Asia (15.8%); South  Southeast Asia (14.2%); Europe, Africa  the Middle East (11.1%); The Americas (10.3%); and Australia, New Zealand  the South Pacific (3.1%).

Both The Americas and Mainland China registered moderate growth in spending over the year of 3.9% and 2.4% respectively.  All other market regions showed varying degrees of decline.  North Asia registered the steepest drop (46.3%), due primarily to the rapid depreciation of the Korean Won and the weakened economy in both South Korea and Japan.

Currency depreciations in Asian countries and the perception of Hong Kong as an expensive destination contributed to the disappointing performance from the South  Southeast Asia market region, which showed a drop of 9.3% overall.  Receipts from Australia, New Zealand the South Pacific were down by 11.7%, those for Europe, Africa  the Middle East by 9.6% and those from Taiwan by 8.3%.

All market regions except Mainland China, which registered an increase of 3.1%, also showed a drop in per capita spending.  North Asia again showed the largest fall, down by 13.5%.  Despite a fall of 6.3%, Taiwan topped the other market regions in per capita spending, with an average of HK$7,073 (US$906.80).  Per capita spending by
visitors from Australia, New Zealand  the South Pacific was down by 5.0% to HK$6,187 (US$793.20); that by visitors from The Americas down by 3.1% to HK$6,923 (US$887.56); by visitors from South  Southeast
Asia down by 2.2% to HK$6,646 (US$852.05); and by visitors from Europe, Africa  the Middle East by 1.8% to HK$6,612 (US$847.69).

FORECASTS

The HKTA is forecasting an overall increase in visitor arrivals in 1998 of around 2% to some 10.6 million.

Commenting on the year-end figures, Amy Chan, executive director of the HKTA, said, "1997 was a year of two halves; the first half was strong but the second half was really tough going.

"1998 will also be a year of two halves but this time in reverse order; the first half will be difficult, but, in the second half, business will start to pick up again.

"Now is the time to lay strong foundations and make thorough preparations for the challenges we will face this year and into the next century.

"Our new marketing campaign is designed to ensure that Hong Kong will be uppermost in traveller's minds so that we will be well positioned for the business rebound.

"We are tailoring marketing strategies for each different market, with a pro-active approach in markets that have growth potential.

"Equally importantly, we are maintaining a healthy presence in markets which are not performing so well."

The HKTA expects that most markets, with the notable exception of North Asia where the economic turmoil will continue to depress outbound travel, will begin to show an increase in arrivals by the end of this year.  In particular, the HKTA is looking to The Americas, Mainland China and Taiwan to produce good growth.  Among the positive factors that will play a role in the rise is the opening of the new airport in July, which will offer opportunities to exploit potential in both new markets and secondary cities within existing markets.