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Following is the speech by the Secretary for Economic Development and Labour, Mr Stephen Ip, at the 19th Anniversary Ball of Hong Kong Retail Management Association today (November 1) (English only):

Good Evening, Ladies and Gentlemen,

I am delighted to be here tonight to attend the 19th Anniversary Ball of the Hong Kong Retail Management Association (HKRMA).

An anniversary ball is a good opportunity to look back on the year just passed and to look forward to the year ahead.

For the year just gone, I feel the scorecard is a mixed one: we have had a rough couple of years with deflation, rising unemployment and falling property prices. On the other hand, we are still the busiest container port in the world. We have also seen strong growth in our tourist arrivals. We have the best hotels in the world, the best airport, the best public transport and the most comprehensive range of food outlets and retail opportunities.

What of the year ahead? I believe Hong Kong has the opportunity to move forward with vigour in areas such as tourism, logistics and other service industries. To succeed in the future, I believe we must work even harder than we have in the past.

Let me use the tourism industry as an example. The growth in the number of visitors in the first nine months of 2002 is encouraging - our total visitor arrivals grew by 16%; particularly, Mainland visitors increased by 48% since the abolition of the quota of the Hong Kong Group Tour Scheme in January this year. The Hong Kong Tourism Board (HKTB) forecasts that the number of visitor arrivals this year will reach 15.35 million, representing an increase of 11.8% over 2001. And don't forget - this growth is taking place notwithstanding the 911 incident, economic uncertainty and the threat of terrorism and war. How do we sustain this growth?

As the top city destination in Asia, Hong Kong must provide world-class products and services to visitors. The Government is investing heavily to develop new attractions. Major projects such as the Hong Kong Disneyland and the Tung Chung Cable Car will strengthen Hong Kong's position as a world class tourist destination.

Having attractions is one thing. Making people welcome, providing value for money and quality service is, in my view, what will differentiate us from our competitors. It is important to enhance the quality of services in the tourism industry. The Travel Agents (Amendment) Ordinance, which takes effect today, will raise the service standards of our inbound travel agents by requiring them to obtain a licence from our Travel Agents Registry and be subject to the regulation of the Travel Industry Council of Hong Kong. Parallel to this, we have allocated about $16 million to upgrade the quality of our tour guides by providing training courses under the Skills Upgrading Scheme. We have also allocated $40 million to the HKTB to implement a two-year "Tourism Orientation Programme" which aims to train up a quality workforce for the tourism industry and to provide value-added services to visitors.

The retail sector is particularly important to the tourism industry. According to the surveys conducted by the HKTB among departing visitors, shopping is by far the most popular activity during their stay in Hong Kong. Our visitors are looking for value for money, good services and innovative products from the retail sector.

The Quality Tourism Services Scheme, which is specifically tailored for the retail and restaurant sectors, and administered by the HKTB, provides consumers with the confidence to spend their money here. The scheme promotes service excellence in the retail and restaurant sectors and provides quality assurance to visitors. Perhaps something worth bearing in mind is the fact that the QTS scheme is not just for tourists, local residents are increasingly looking to those shops which display the 'Q' mark for quality services and products. The HKTB is now reviewing the scheme with a view to expanding and enhancing both visitors' and local residents' awareness of the benefits of shopping at QTS shops. I urge all of you to sign up. The benefits to you and to Hong Kong which will come from shoppers having confidence in the quality of the services they receive and the merchandise they buy should not be underestimated.

I am pleased to see that the HKRMA is also working hard to achieve excellence in service in the industry. Examples such as the "Service and Courtesy Award" and "Mystery Shopper Programme" provide strong incentives and encouragement for the sector to enhance their standards. With improved services and more sophisticated products, we will not fear competition, rather we will be able to confront it, overcome it and thus strengthen our position in future.

Ladies and Gentlemen, I hope all of you will do well and do your part to contribute to the future success of Hong Kong and make it truly Asia's World City.

Thank you.

End/ Friday, November 1, 2002

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