"This is encouraging," said HKTA Executive Director Amy Chan. "While the economic problems in the region will continue to have a negative impact on travel, we are hopeful this modest recovery can be sustained. Relatively speaking, Hong Kong is holding its own in its margin above other regional destinations, and continues to be the most popular destination in Asia after the Mainland."

The biggest growth market in August was Mainland China - up 35.1% to 267,839 visitors. This was due partly to the 30% increase in the tour group quota, which came into effect on July 1 this year, as well as in contrast to the  restricted travel from the Mainland this time last year.

Other markets that showed good growth in August were the Netherlands, up 32.6% to 4,939 visitors, the United Kingdom up by 22.9% to 22,036, and Canada up 13% to 14,332. Taiwan continued to be the second biggest source market after the Mainland with 166,500 arrivals in August, up 2.6% on August 1997. And, despite its depreciated Yen and troubled economy, Japan retained its third position with 88,365 visitors, down 9.5%.

Similar economic problems and uncertainties also continued to affect outbound travel to Hong Kong from South Korea (down 50.8% to 16,700), Indonesia (down 27.0% to 8,373), Thailand (down 17.8% to 7,962), and the Philippines (down 27.7% to 17,488) - also affected by the reduction in flight frequency by Philippine Airlines.

Total arrivals during the January-August period this year amounted to 6.22 million, representing a decline of 13.5% against the same period last year, and reflecting the surge of visitors in the first five months of 1997. The only markets to register growth over the full eight-months period were the Mainland (up 12.3%), Canada (up 5.1%), New Zealand (up 5.1%), and Taiwan (up 1.6%).