Chapter 1 Introduction
1.1 Background 1.1.1 Tourism Development in Hong Kong
Hong Kong is considered as one of the most successful regions in terms of tourism industry in the world. The city received a total of 25.25 million tourists visits in 2006, including the visitors from mainland China. It helped to generate a total of HK7.3 billion or US billion in income. Therefore it made the tourism industry as the second largest generator of foreign currency (Cochrane 2008, p. 260). In 2007, the industry showed a continuous increase in terms of the number of visitors. In September of the year, there are some 2,120,350 visitors that have arrived in Hong Kong, showing a great increase of 15.9% from previous rate, while the from January 1 up to present arrivals have reached 20,363,764, showing an increase of 9.6% year-on-year (Business Monitor International, 2008).
Hong Kong is known as the Shopping Paradise attracting thousands of travellers from all over the world. It is one of the most important pillars of the economy of the city. The situation had improved due to the implementation of Individual Visit Scheme (IVS) of the government of China, which allows the citizen of mainland China, to visit Hong Kong in individual basis. Prior to that, people of mainland China, travel by group or business visa. Since then, Hong Kong had become the favourite destination of Mainland Chinese tourists (Hong Kong Economic Times, 2006). The situation has created a tremendous business opportunities to the tourism industry of the city. In 2004, there are about 2.6 million of individual document holders from Chinese mainland that have visited the city since the implementation of the IVS. Furthermore, the scheme had already brought a total of HK.6 billon worth of revenues (People, 2004). According to the Hong Kong Tourism Board (2006), Mainland China reached 58.8% out of the total tourists in the city by the end of 2006 (see Appendix I).
The growing influence of the Mainland Chinese visitors is the primary reason why different players in the tourism industry is focusing on the behaviours, demands and desires of the Mainland Chinese visitors in the process of their decision-making.
Figure 1.1 Comparison of Actual Number of Visitors (Extract from Appendix I)
1.1.2 Hong Kong Shopping Tourism and Mainland Chinese Tourists
Shopping is considered as the most common and enjoyable activities undertaken by people during holidays, and in most cases, it provides a major attraction and basic motivation for travel. Due to the current growth and development of efficient transportation systems, the Internet, and widespread use of credit cards, people have been able to travel different places in order to shop (Timothy, 2005, p. 1976).
Shopping plays an important role in the field of tourism. This is due to the fact that, Jansen-Verbeke stated that for many tourists, an integral part or even the entire purpose of their travel or visit is shopping. In addition, shopping is a major time-use for many of the tourists, despite of their primary motivation for travel (as cited from Theobald, 1998, p. 405).
Hong Kong is considered as one of the most fascinating, product-diverse, and accommodating shopping destinations in the world. These are the reasons why the city has been dubbed as a shopper’s paradise (Timothy, 2005, p. 1980).
Shopping in Hong Kong is one of the most important activities for the Mainland Chinese due to the fact that, Hong Kong has no sales tax, luxury goods can be 10% to 20% cheaper than in China that raised its taxes towards the cosmetic products from 20% to 50% (Chan, 2008). The said condition can be seen from the statistics that have been released and reported by the Hong Kong Tourism Board that during the first half of 2008, the same-day visitors made up close to half of all the arrivals from the Mainland China from 41% of the last year (Chan, 2008). Furthermore, people from Mainland China believe that Hong Kong is a major trend setter in terms of fashion and style.
Tourists from mainland China, spend most of their money on shopping when they come to Hong Kong. During 1996, shopping took the 63% of the total expenditures. From 1996 to 2001, visitors in the city is spending more and more on shopping, that had increased to 64% during 2001 (Zhang & Pine, 2005, p. 74). This shows that shopping is considered as one of the most important motivation of the Mainland Chinese visitors in the city. Table 1 shows other important spending activities of tourists in Hong Kong.
Activities
Spending Percentage (1996)
Spending Percentage (2001)
Shopping
63%
64%
Hotel
17%
15%
Meals Outside Hotel
11%
13%
Source: (Zhang & Pine, 2005, p. 74)
Chinese visitors are likely to stay in less expensive hotels and devote more of their money in spending for different luxury goods, dedicating a large 73% of their outlay to shopping (Chan, 2008). It shows that shopping has a strong influence and motivation towards the mainland Chinese travellers in Hong Kong.
It is obvious that that shopping travel has become one of the most important activities by tourists in the city. Since the culture, consumer behaviour, and expenditure patterns of Mainland Chinese might be different from those from other countries, it is critical for the retail shops to provide tailor-made service in order to attract them to buy the products and services. It would be the primary concern of the Hong Kong tourism industry. Therefore, service quality plays an important role in increasing Hong Kong s’ tourism industry and attracting the largest inbound tourist market – Mainland Chinese. Previous observations indicated that customer satisfaction will lead to changes of decision-makers in the tourism industry (Zhang & Chow, 2004). It is necessary to analyse if this group of tourists are satisfied with the service quality experience in Hong Kong, and make recommendations to the retail shops on how to modify or improve their service quality in order to attract them.
1.2 Problem Statement
There are many retail shops in Hong Kong. There are no limitations or restrictions on which one can or cannot serve tourists. In fact, tourists have no limitation whatsoever in choosing which shop to buy from. Some service providers might be especially trained to deal with different nationalities of tourists, while some others do not focus in serving tourists. All of them are facing the same situation; where in, tourists from Mainland China can walk in and select whatever they want for as long as they are satisfied with the products and services. Therefore service quality in this research will apply to all retail shop service providers in Hong Kong whether their target customers are tourists or not. Although there have been a few studies exploring service quality of many service sectors in Hong Kong, such as tour guide (Zhang & Chow, 2004), travel agents (Lam & Zhang, 1999), and the hotel industry (Qu &Sit, 2007), little attention has been paid to shopping service. As shopping has become one of the most important motivations for Mainland Chinese to travel Hong Kong, it is therefore critical to examine tourists’ satisfaction with shopping service and enrich the knowledge in this field.
1.3 Research Objectives
The aim of this research is to examine whether Mainland China tourists are satisfied with their shopping experience, and whether they are satisfied with the service quality in the retail shop of Hong Kong. The research is expected to achieve the following objectives.
1) To identify the critical success factors for retail service providers in servicing Mainland China tourists;
2) To examine Mainland China tourists satisfaction with the service quality in the retail shop;
3) To identify methods for the retail shop to build customer satisfaction for Mainland China tourists;
4) To provide implications to decision-makers in the retail shop on how to enhance service quality to attract Mainland China tourists.
1.4 Significance of the Study
This study conducts a comprehensive approach in order to examine the Chinese tourists’ satisfaction with the quality of shopping service in Hong Kong. The findings of this study will provide both academic and empirical contributions. Academically, the result of this study will help to generate information on the concept that customer satisfaction. Empirically, this study serves as a valuable source of information on how the Hong Kong retail shop may change its service quality in order to cater the culture and consumer behaviour of the Mainland China tourists. With regard to the student, this research will enhance his knowledge and understanding regarding the service quality and tourism that will serve as a preparation for better career prospects in the future.
References
Chan, S 2008, Chinese Tourists Spend Big in Hong Kong, BusinessWeek (July 23), viewed 20 October 2008, <http://www.businessweek.com/globalb iz/content/jul2008/gb20080723_568870.htm>
Cochrane, J 2008, Asian Tourism: Growth and Change, Elsevier
HK Individual Visit Scheme 2004, People, viewed 20 October 2008, < http://english.peopledaily.com.cn/200407/29/eng20040729_151214.html>
Hong Kong Economic Times (2006). Decent Business Environment in Hong Kong after 1997. Hong Kong Economic Times. Hong Kong, p.A2.
Timothy,D 2005, Shopping Tourism, Retailing, and Leisure, Channel View Publications
The Hong Kong Tourism Report 2008 2008, Business Monitor International, viewed 20 October 2008, < http://www.businessmonitor.com/tourism/ hongkong.html>
Theobald, W 1998, Global Touris: The Next Decade, Butterworth-Heinemann
Zhang, H.Q. & Chow, I. (2004). Application of importance – performance model in tour guides’ performance: evidence from Chinese outbound tourists in Hong Kong. Tourism Management, 25(1), 81-91.
Zhang, H Q, Pine R & Lam, T 2005, Tourism and Hotel Development in China: From Political to Economic Success, Haworth Press
Appendices:
APPENDIX I
COMPARISON OF TOTAL INBOUND VISITORS FROM CHINA
AND ALL OTHER COUNTRIES TO HONG KONG
Credit:ivythesis.typepad.com
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