Forecasts of Demand for Hong Kong Tourism 2005-2020

Prof. Haiyan SongSchool of Hotel and Tourism Management

The Hong Kong Polytechnic University

Methods

• Econometric Model (VAR)– Forecast variable

• Visitor arrivals

– Explanatory variables• Income level of origin countries/regions (GDP index)

• Cost of tourism in Hong Kong (Exchange rate adjusted CPI)

• Cost of tourism in substitute destinations (Exchange rate adjusted CPI indexes)

• One-off events (1997 handover, 9.11, 2003 SARS and Iraqi War, etc.)

Methods

– Forecast visitor arrivals from the top 10 tourism generating countries/regions

– Forecasts of individual countries/regions are aggregated to achieve the total arrivals

– Model estimation period: 1984Q1 – 2004Q4– Forecasting period: 2005Q1 – 2020Q4– Only annual forecasts will be reported

Top 10 Origin Countries/regions (2004)

Countries/regions Visitor Arrivals Market Share (%)

Mainland China 12,245,862 56.15

Taiwan 2,074,795 9.51

Japan 1,126,250 5.16

USA 1,051,696 4.82

Korea 541,041 2.48

Macau 482,187 2.21

Singapore 463,920 2.13

UK 411,287 1.89

Australia 408,940 1.87

Philippines 336,673 1.54

Total 87.77

Year

Forecasts of Visitor Arrivals

Model (1)Growth Rate

(%)

Adjusted Forecasts(Model 2)

Adjusted Growth Rate (%)

2005 11,905,010 11,905,010

2006 13,292,734 11.66 13,833,622 16.20

2007 15,033,825 13.10 15,950,166 15.30

2008 17,178,257 14.26 18,246,990 14.40

2009 19,876,782 15.71 20,710,333 13.50

2010 23,320,274 17.32 23,319,835 12.60

2011 27,673,807 18.67 26,048,256 11.70

2012 33,068,811 19.49 28,861,468 10.80

2013 39,608,930 19.78 31,718,753 9.90

2014 47,384,547 19.63 34,573,441 9.00

2015 56,503,227 19.24 37,373,889 8.10

2016 67,130,121 18.81 40,401,174 7.20

2017 79,523,239 18.46 43,673,669 7.20

2018 94,052,199 18.27 47,211,237 7.20

2019 111,203,854 18.24 51,035,347 7.20

2020 131,570,812 18.31 55,169,210 7.20

Visitor Arrivals from Mainland China (2005-2020)

Forecasts of Visitor Arrivals from Mainland China(2005-2020)

0

20

40

60

2005 2007 2009 2011 2013 2015 2017 2019

mill

ions

0

3

6

9

12

15

18

%

2006 2008 2010 2012 2014 2016 2018 2020

Growth Rate of Mainland China(2006-2020)

Year Visitor Arrivals Growth Rate (%)

2005 2,287,652

2006 2,500,508 9.30

2007 2,713,365 8.51

2008 2,926,222 7.84

2009 3,139,078 7.27

2010 3,273,330 4.28

2011 3,262,382 -0.33

2012 3,287,088 0.76

2013 3,383,902 2.95

2014 3,490,982 3.16

2015 3,563,070 2.06

2016 3,608,208 1.27

2017 3,651,535 1.20

2018 3,701,671 1.37

2019 3,751,952 1.36

2020 3,795,876 1.17

Taiwan

Japan

Year Visitor arrivals Growth Rate %

2005 1,626,249

2006 1,807,239 11.13

2007 1,872,606 3.62

2008 1,909,585 1.97

2009 1,946,357 1.93

2010 1,986,862 2.08

2011 2,029,981 2.17

2012 2,074,693 2.20

2013 2,120,593 2.21

2014 2,167,606 2.22

2015 2,215,735 2.22

2016 2,264,999 2.22

2017 2,315,404 2.23

2018 2,366,991 2.23

2019 2,419,769 2.23

2020 2,473,743 2.23

Korea

Year Visitor Arrivals Growth Rate(%)

2005 662,287

2006 692,083 4.50

2007 797,538 15.24

2008 865,621 8.54

2009 920,861 6.38

2010 981,889 6.63

2011 1,068,579 8.83

2012 1,176,393 10.09

2013 1,297,094 10.26

2014 1,424,722 9.84

2015 1,552,535 8.97

2016 1,673,734 7.81

2017 1,784,057 6.59

2018 1,882,602 5.52

2019 1,971,351 4.71

2020 2,054,197 4.20

UK

Year Visitor Arrivals Growth Rate (%)

2005 454,281

2006 490,926 8.07

2007 517,413 5.40

2008 539,039 4.18

2009 559,037 3.71

2010 579,065 3.58

2011 599,792 3.58

2012 621,433 3.61

2013 644,016 3.63

2014 667,509 3.65

2015 691,887 3.65

2016 717,135 3.65

2017 743,252 3.64

2018 770,254 3.63

2019 798,162 3.62

2020 827,000 3.61

YearTotal Visitor

arrivalsGrowth Rate

(%)

2005 23,609,311

2006 26,468,800 12.11

2007 29,366,417 10.95

2008 32,354,120 10.17

2009 35,464,764 9.61

2010 38,627,327 8.92

2011 41,752,997 8.09

2012 45,045,700 7.89

2013 48,505,117 7.68

2014 51,991,906 7.19

2015 55,382,095 6.52

2016 58,622,343 5.85

2017 62,045,312 5.84

2018 65,676,108 5.85

2019 69,523,563 5.86

2020 73,600,427 5.86

Total Visitor Arrivals (2005-2020)

0

20

40

60

80

mill

ion

s

2005 2007 2009 2011 2013 2015 2017 2019

Forecasts of Total Visitor Arrivals(2005-2020)

Countries/regions Average Growth Rate

2005-2020 (%)

Mainland China 10.46

Taiwan 3.43

Japan 2.84

USA 1.82

Macau 3.48

Korea 7.84

Singapore 3.81

UK 4.07

Australia 3.19

Philippines 6.54

Average Growth Rates of Top 10 Average Growth Rates of Top 10 Countries/Regions Countries/Regions

Countries /regionsAverage Growth Rate

1984-2004 (%)Average Growth Rate

2005-2020 (%)

Mainland China 22.40 10.46

Taiwan 13.43 3.43

Japan 3.34 2.84

USA 3.18 1.82

Macau 18.17 3.48

Korea 13.19 7.84

Singapore 5.19 3.81

UK 4.47 4.07

Australia 1.95 3.19

Philippines 6.37 6.54

Average Growth Rates of Top 10 Countries/Regions Average Growth Rates of Top 10 Countries/Regions over 1984-2004 and 2005-2020over 1984-2004 and 2005-2020

Countries/regions Visitor Arrivals Market Share (%)

Mainland China 52,910,543 71.89

Taiwan 3,795,876 5.16

Japan 2,473,743 3.36

USA 1,389,471 1.89

Macau 1,626,325 2.21

Korea 2,054,197 2.79

Singapore 909,826 1.24

UK 827,000 1.12

Australia 604,383 0.82

Philippines 1,237,864 1.68

Other Countries 5,771,199 7.84

Forecasts of Market Share in 2020

Forecasts of Market Share in 2020

China72%

China Taiw an Japan USAMacau Korea Singapore UKAustralia Philippines Others

Forecasts of Market Share in 2020(Mainland is excluded)

Japan12%

USA7%

Macau8%Korea

10%

Others28%

Taiw an 18%

Philippines 6%

Australia 3%

UK 4%

Singapore 4%

Thank You!

Email: hmsong@polyu.edu.hk