XN000022-1979-10-17 — Page 4

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WEDNESDAY, OCTOBER 17, 1979

+ALL OF THESE FACTORS TAKEN TOGETHER WILL INEVITABLY MEAN THAT THE COMPANY WILL MAKE LOSSES ON ITS PASSENGER FERRY SERVICES AS A WHOLE UNLESS THERE IS AN INCREASE IN CHARGES, MR. JONES SAID.

HE ALSO NOTED THAT SINCE 1974, A NUMBER OF MEASURES HAVE BEEN TAKEN TO SAFEGUARD THE FINANCIAL VIABILITY OF THE COMPANY'S FERRY OPERATIONS.

THESE INCLUDE THE WAIVING OF ROYALTIES AND LICENCE FEES, THE ABOLITION OF SECOND CLASS FARES ON CROSS-HARBOUR AND TOLO HARBOUR SERVICES, AND FARE INCREASES ON ALL PASSENGER SERVICES, THE COMPANY HAS ITSELF ALSO TAKEN MEASURES TO IMPROVE ITS OPERATIONAL EFFICIENCY, PRINCIPALLY BY REDUCING STAFF NUMBERS AND BY SELLING OFF 14 COST-INEFFECTIVE VESSELS. DESPITE THESE MEASURES, THE RATE OF RETURN ON THE COMPANY'S NEXT FIXED ASSETS HAS REMAINED LOW OF BETWEEN ONE AND SIX PER CENT FOR THE YEARS 1975 TO 1978, AGAINST A FORECAST RETURN OF EIGHT PER CENT.

CLOSE TOURISM RELATIONSHIPS WITH CHINA ARE TO DEVELOP FURTHER

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THE HONG KONG TOURIST ASSOCIATION HAD DEVELOPED CLOSE RELATIONSHIPS WITH THE TOURIST AUTHORITIES IN CHINA AND IT WAS CONFIDENT THAT THESE RELATIONSHIPS WOULD DEVELOP STILL FURTHER TO MUTUAL BENEFIT.

THIS WAS STATED BY THE CHAIRMAN OF THE ASSOCIATION, THE HON. DAVID NEWBIGGING WHEN HE COMMENTED ON THE ASSOCIATION'S 1978-79 REPORT TABLED AT THE LEGISLATIVE COUNCIL TODAY.

+WITH THE HIGH PRIORITY PLACED ON TOURISM IN CHINA, WE BELIEVE HONG KONG HAS AN IMPORTANT ROLE TO PLAY BOTH AS A GATEWAY TO CHINA AND AS A SOURCE OF INVESTMENT AND ADVICE IN THE DEVELOPMENT OF CHINA'S OWN TOURIST INDUSTRY, HE SAID.

HE POINTED OUT THAT TOURISM IN HONG KONG HAD BECOME AN INCREASINGLY SIGNIFICANT FACTOR IN THE ECONOMY. IN 1978 HONG KONG HAD OVER TWO MILLION VISITORS FOR THE FIRST TIME, REPRESENTING AN INCREASE OF 17 PER CENT OVER THE PREVIOUS YEAR.

GROSS REVENUE FROM TOURISM WAS ALSO A RECORD- UP NEARLY 26 PER CENT TO HK$5 100 MILLION. ANOTHER RECORD WAS THE PER CAPITA EXPENDITURE WHICH WAS NINE PER CENT HIGHER THAN IN 1977.

MR. NEWBIGGING SAID THE +HONOURABLE MENTION GIVEN BY THE GOVERNOR IN HIS POLICY ADDRESS TO THE TOURIST INDUSTRY WAS AN ENCOURAGEMENT AND WAS JUSTIFIED BY THE RESULTS OF THE FIRST SIX MONTHS THIS YEAR. THEY SHOWED A FURTHER INCREASE IN NUMBER OF VISITORS OF MORE THAN 10 PER CENT OVER 1978. MORE IMPORTANTLY, TOTAL EXPENDITURE BY TOURISTS GREW BY 32 PER CENT IN TOTAL TERMS AND BY 21 PER CENT IN PER CAPITA TERMS.

+EVEN ALLOWING FOR THE CURRENT HIGH RATE OF INFLATION, THIS IMPLIES SIGNIFICANT REAL GROWTH, A POSITIVE CONTRIBUTION TO OUR ECONOMY, AND SOME SUCCESS IN OUR POLICY OF TRADING UP,+ MR. NEWBIGGING SAID.

HE REPORTED