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Following is a question by the Hon Sophie Leung and a written reply by the Secretary for Trade & Industry, Mr CHAU Tak Hay, in the Legislative Council today (Wednesday) :

Question:

I have received a complaint that the charges for the use of the venues in the Hong Kong Convention and Exhibition Centre ("HKCEC") are high; for example, as high as $16 800 were charged for the four-hour rental of a conference room. In this connection, will the Government inform this Council whether it will consider proposing to the management of HKCEC that it formulate measures to reduce or waive the venue charges for certain industrial and commercial promotional activities, so as to assist industrialists in developing business opportunities; if not, the reasons for that?

Reply:

The Hong Kong Trade Development Council (TDC) has contracted out the operation of the Hong Kong Convention and Exhibition Centre (HKCEC) to a private operator. The HKCEC operator receives no subsidy from the Government or TDC, and is required to pay from its gross income an annual fee to TDC at the percentages agreed in its contract with TDC. The operator sets rental charges for the exhibition and convention areas in HKCEC in accordance with commercial principles and market conditions, and taking account of suggestions and recommendations made by TDC.

HKCEC has meeting rooms of different sizes ranging from 38 square metre to 740 square metre. At present, for a medium size meeting room of 50 square metre, the rental for a half-day session is $943. The case quoted in the question appears to pertain to the rental charge for a meeting room of the largest size, ie 740 square metre. The room is comparable to a hotel ballroom in terms of size, ambience and quality of services. The daily rental rate is currently $45.6 per square metre, hence $16 800 for a four-hour session. From information provided by TDC, the rate is lower than those charged by most of the top hotels in Hong Kong for a ballroom.

Following consultation with TDC, the HKCEC operator has recently announced a package of rental incentives for implementation in year 2000. The incentives are aimed at enhancing the utilisation of HKCEC in the prevailing economic climate. The rental charges of HKCEC will be frozen for year 2000. In addition, all events can enjoy a significant discount of up to 40 per cent for low season bookings in the months of February, July, August and December in 2000. For new exhibitions, the organisers may qualify for rental discounts of 10 per cent to 30 per cent by contracting for three years, demonstrating proven "international" content, and taking up over 3 510 square metre in space. Exhibition and convention organisers will have a greater choice of size configurations of venue space and may take up additional areas in smaller increments. Major international conventions and conferences which are expected to have a positive impact on Hong Kong's economy will also be eligible for special discounts.

Since the HKCEC operator needs to operate HKCEC on a self-financing basis and to pay an annual fee to TDC, it would only be fair that it should be allowed to operate HKCEC in accordance with commercial principles and market conditions. The present arrangement also requires the operator to be sensitive to the need for setting the rental charges at competitive levels, and the recent announcement of the package of rental incentives indicates that the operator is sensitive to this need. We do not consider it necessary for the Government to ask the operator to further reduce or waive the venue rental charges for certain industrial and commercial activities. The Government, however, will convey the concerns of industry about the rental charges of HKCEC to the operator, through TDC, where necessary. TDC will also give advice to the operator during annual consultations on rental charges between TDC and the operator.

End/Wednesday, April 21, 1999

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