Even though other sectors were performing well, a major drawback of SARS outbreak was evident from the influence of tourism. During 2003, second quarter, the arrival of visitors decreased by 10.4 percent in comparison to the arrival in 2002 and airplane flights also were cancelled. The travel of air passengers from and to Hong Kong started dropping in middle March and this decreased in a sharp way by the month’s end which was various days prior to travel warning from WHO. The airplane movements to and from Hong Kong also decreased after March end and reached all time low by early May. By July end, the flights number almost recovered to the level that was apparent in March. The supply and demand diagram is as follows:
The passenger arrivals and departures number through travel modes for visitors and Hong Kong resident. In 2003, visitor arrival started to drop in all the 3 travelling modes in comparison with the figures in the same year in March. Eventually, the airline passengers started decreasing and reached a decrease by 77 percent. Between March and April 2003, on an average, the total visitor number arriving in Hong Kong further decreased by 63 percent. The deterioration in travel through the residents was comparatively lesser drastic in nature with a decrease in total departure number as well by 26 percent. Visitor arrivals in June started recovering and by August, the arrival came back to its original level.
In the year 2002, the total tourism expenditure related to Hong Kong inbound tourism was set at 77.4 billion dollars amount to GDP’s 6 percent. The influence of tourist expenditure over the retail sales value is quite substantial. The average expenditure through every tourist overnight in 2001 was 4588 dollars and this expenditure increased in 2002 to 4904 dollars. A decrease in 2003 of 850,000 visitors translated to a decrease in spending by 4.3 billion dollars in the market of Hong Kong’s domestic tourist consumption implying that the retail selling decreased by 2.0 billion dollars in March 2003.
Measures to minimize the loss of probable revenue lost
The first step would have been to increase the value of capital for the visitors. This would have been done by taking preventive measures in the luxurious property in terms of security against the SARS epidemic. The government enrolled several healthcare programs that offered knowledge regarding SARS and how preventive measures could be taken. The same information with credible citations would have been used on the website for luxurious property in order to inform people of the preventive steps this property supports. The demand and supply were weak in a limited period, and during this period the loss of revenue was high. However, within several months, the demand and supply were operating as needed and rose to a much higher range. In such circumstances, government support would have been needed in terms of reduced taxes of accommodation and the appropriate value of every hotel maintained. This would allow the tourists with a benefit of cheap prices in difficult situations. Measures would have also been needed in the domain of delivering higher value for the prices. This would have motivated the customers further. Another essential requirement would have been to involve all the major stakeholders in the process of change. The change would require restructuring the hotel as per the need in the external environment. The hotels senior management would have been further motivated to engage the staff in this process of change. Technology leveraging would have offered much better advantages. Only through active staff, will the newly undertaken technology foster. This would help in overcoming everyday challenges. The luxurious property will be innovated to raise production. This will take into consideration not only the needs of today but also that of future. Using mobile and digitalized wallets for payment services are one such example of emerging technology.
A separate committee would further have been set up in order to support the hotel in its difficult journey by researching and developing and uncertainties and risks ahead of the property. Innovation is the key to success in such difficult times.