Poor Charles Ng.

The recent SARS outbreak that kept tourists away from Hong Kong nearly wiped out his travel agency business.

Now that the threat of the disease has gone, Ng is facing a whole new set of problems: to cope with the huge influx of mainland tourists following the lifting of restrictions on individual travellers to Hong Kong.

But this is a problem that Ng and hundreds of thousands of people in Hong Kong's tourism industry are learning to love. "We are inundated by the big sudden surge in mainland tourists wanting to visit Hong Kong," he said.

Under the Closer Economic Partnership Arrangement (CEPA), the mainland government allows residents in Guangdong Province to visit Hong Kong individually instead of having to go through mainland travel agents. The scheme will cover Shenzhen, Zhuhai, Huizhou, Guangzhou, Shanghai and Beijing.

According to the Hong Kong Inbound Tour Operators Association, the scheme is very popular among mainland tourists and many Hong Kong-bound tours are fully booked.

Ricky Tse, president of the association, said: "Mainland tourists show great interest in visiting Hong Kong, I am sure Hong Kong will be their first choice of destination for this summer."

Tse said the number of visitors from the mainland had been increasing. Latest daily figures show there were several thousands more mainland visitors crossing the border to Hong Kong and several tourist agencies reported that their Hong Kong-bound tours during the national day holiday in October were fully booked. They had stopped accepting applicants since last week, he said.

Ng, who is also the vice-president of the association, predicted that there would be a 30 per cent increase in mainland tourists in 2004 from 2003, leading to a 50 per cent jump in tour fees per person next year from the current levels.

Unsurprisingly, most of the three-star and four-star hotels popular with mainland tourists are doing a roaring business. Most of them are solidly booked until September. And hoteliers expect that the boom will continue in the foreseeable future.

Dan Lee, general manager of Newton Hotel Hong Kong, said that the hotel was now having an occupancy rate of more than 80 per cent compared to only 10 per cent during the SARS epidemic.

The outbreak had hit the business badly and the room rates were forced down to a level much lower than they were twelve years ago, Lee said.

He said room rates would only return to 60-70 per cent of the pre-SARS level by September and he expects that reservations for the national day holiday could be fully booked.

"The new arrangement will certainly help our business and we are optimistic to see growth for the next year," Lee said.

The sudden shortage of hotel rooms has caused the government to propose turning some of the unsold government housings into hostels for tourists.

The benefits of the boom in tourism have spilled to the retail sector.

The retailers who are benefiting most are jewellery shops and cosmetic discount outlets. Jewellery shops reported that gold ornaments that have a high investment value were in strong demand.

Some cosmetic discount outlets said that mainland tourists spent an average of HK$200 - HK$500 per person on imported skin care products.

The Body Shop told local media that at their store in Tsimshatsui, Hong Kong's tourist centre, more than half of the customers were from the mainland.

(HK Edition 08/16/2003 page7)