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Following is the speech by Permanent Secretary for Economic Development, Ms Sandra Lee, at the panel of the Conference of International Co-operation for Tourism Development Under A New Paradigm on Government's Role in Revitalizing Asian Tourism - "Building an Environment for Tourism" today (July 14) : (English only)

Secretary Gordon, Fellow Panelists, Excellencies, Ladies and Gentlemen.

Welcome remarks

On behalf of the Hong Kong Special Administrative Region Government and the Hong Kong community, I welcome all of you to Hong Kong. I am honoured to have the opportunity to share my views on "Building an Environment of Tourism" with so many distinguished speakers today. My thanks go in particular to Secretary Gordon for chairing the panel.

I will focus my remarks today on the key issues facing Governments as they work to build a suitable environment for business development in the Tourism Sector. I will use examples from Hong Kong to illustrate my points.

Issues

In a world of rapid transportation links, instant communications and mass movements of people, facing up to the threats of epidemic, terrorism and economic pressures post multiple challenges to Governments.

In my view, recent developments have exacerbated the longstanding conflict between calls to facilitate the movement of goods and people to encourage tourism and economic development and calls to restrict the movement of people to combat terrorism and prevent the spread of disease.

Governments have no way to avoid this conflict since they are ultimately responsible for the regulation of the movement of goods and people as well as being the guardians of public safety.

How will Governments reconcile these very different demands?

Facilitating Travel

Governments regulate the movement of people and influence how people move, where they stay, what they do and even impact on the cost of their trip. This is a result of both direct and indirect measures. These range from visa requirements; licensing of travel agents, airlines and hotels; to even the provision of the infrastructure to facilitate travel including the development of airports, railways, roads and port facilities. Governments deal direct with travellers through customs, immigration and quarantine facilities; and of course have a very real and direct impact on the cost of travel through the imposition or removal of tariff and non-tariff barriers to movement.

My belief is that the most important role for Government is to provide a suitable environment in which business can flourish and more pertinently, operate on a level playing field. This means balancing measures to ensure the free flow of people against measures to protect citizens from external threats.

Hong Kong is widely acknowledged to be one of the most business-friendly economies in the world. In the "Economic Freedom of the World: 2003 Annual Report" released last week, Hong Kong is ranked the freest economy for seven consecutive years. We are firmly wedded to the principles of laissez faire and minimal regulation, while offering protection to our customers and ensuring a good standard in our business operations. At the same time, we are committed to keep the cost of business as low as possible through our commitment to a low and simple tax regime for both businesses and individuals.

Beyond this we also have one of the most liberal visa regimes in the world. Tourists from over 170 countries can visit Hong Kong visa free from seven days to six months and we are working to remove as many restrictions on access as we can. A recent development in the area is the agreement reached with the Mainland to allow independent travellers from four cities in Guangdong Province to visit Hong Kong for up to one week at a time. The intention is to extend this scheme to cover the whole of the Province by July 2004. This will open up Hong Kong to millions of potential visitors.

Investing In Tourism

A key issue for us all is the need to put in place systems that can facilitate travel - making it hassle free, convenient and efficient. Within Asia, Governments have been investing heavily in the necessary infrastructure. Hong Kong is doing the same: over the last 10 years we have built a new world class and award-winning airport, new railway lines and new roads. A visit to Hong Kong is memorable: from your arrival at the Hong Kong International Airport through immigration and customs formalities carried out efficiently and courteously, to the moment you fly out having checked in for your flight in Central, travelled to the airport in comfort on the Airport Express Railway, and enjoyed the shopping in the sky mall of our airport.

Of course, there is also a need to invest in tourism products to attract new visitors and to keep visitors coming back. This investment must recognise the changing demands of increasingly sophisticated travellers. In Hong Kong, we are investing in a whole range of different types of tourism products from the Hong Kong Disneyland and the Cable Car on Lantau, to new eco-tourism facilities such as the Hong Kong Wetland Park. Visitors can explore a whole range of unexpected attractions in our extensive country and marine parks, in remote new territories villages and even within the urban area. There is something new and unexpected round almost every corner. Destinations must now cater for many different types of traveller from the most sophisticated world-weary businessman to the neophyte traveller on her first trip away from home. We must respond to these different interests in a positive manner.

Investing in People

Tourism is a people industry, beyond investment in the hardware to support tourism, Governments must also invest in the software to underpin the hardware. This involves training targeted at the needs of the travel and tourism industry, putting in place the tax and regulatory regimes that support the development of this sector.

Here again I can illustrate what I mean by reference to one of the initiatives we have taken in Hong Kong. In 2001, we set up an on-the-job training scheme for people interested in joining the tourism sector. The Hong Kong Tourism Board runs this scheme, which we call the Tourism Orientation Programme. It operates very much like an apprenticeship system with participants receiving basic training and at least two different job placements during their one-year participation. With strong support from the tourist trade we have had some 200 participants on placements with companies as diverse as hotels, airlines, the airport, travel agents and even shopping malls. Many of those who took part in the first year's course subsequently found jobs in the tourism sector.

Safety and Security

A particularly important issue facing Governments is the need to ensure that destinations are safe for local residents and visitors alike. Law and order issues have come to the forefront in the days since 9/11. Not just in relation to internal security issues but increasingly in respect of the threat from terrorism. In many ways, I feel this is likely to be the most difficult issue for Governments worldwide. There will be a need for close cooperation across boundary lines, the sharing of information and collective action to combat this most insidious of threats.

Hong Kong is, of course, playing a full role in this. For example, we are working closely with the US and other authorities on the screening of passengers and goods passing through Hong Kong.

I must also touch on the newest threat to tourism: disease. The recent SARS crisis hit Asia and Hong Kong, in particular, very hard. The unexpected emergence of this deadly new virus caught many off guard. The reaction internationally from Governments and Non-governmental Organisations alike was made difficult by the fact that the virus spread so rapidly round the world.

With hindsight, I believe it is fair to say that none of us could have had a perfect solution. But I also have to say that we all tried hard to respond quickly and as effectively as we could. The most reassuring fact to emerge from this crisis was that when the crunch came, Governments, medical professionals and Non Government Organisations were able to work together across traditional boundaries to combat the virus. The critical lesson we must all learn is how to communicate and build trust so that the next time we have a crisis which transcends the normal boundaries, we can work together even more closely to tackle it.

The SARS crisis has demonstrated the importance of health and hygiene issues. The threat to tourism from the fear of disease and the devastating impact of travel directives relating to health issues means that Governments and Non-Governmental agencies, academics, the travel trade and the airlines all have to come together to rebuild confidence.

Conclusion

This conference will give us all an opportunity not only to review the current situation facing tourism in Asia but also an opportunity to look ahead. By doing so, I hope we can agree on a series of measures which will allow us all to enhance cooperation and develop win-win environment for the tourism sector of different economies, and also get ourselves prepared when the tourism sector has to face up to challenges, but hopefully not crises, in the years ahead.

Thank you.

End/Monday, July 14, 2003

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