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months dropped by HK$1½ million. Would the Chairman of the Recreation Select Committee not agree that in view of these figures it was a mistake to raise swimming pool charges and recommend therefore to lower swimming pool charges to encourage larger attendance, and would he not agree that it is more important that children living in crowded areas are allowed to attend swimming pools rather than be kept away from them because of high attendance charges?
MR. HOWARD H. W. YOUNG, CHAIRMAN OF THE RECREATION SELECT COMMITTEE, replied as follows (in English):—MR. SULKE's question is in three parts.
The first part asks if I would not agree that, in view of actual attendances and revenue in the period March to September 1985 as compared with the same period last year, it was a mistake to raise swimming pool charges.
The second part asks if I would not agree to lower swimming pool charges to encourage larger attendance.
The third part asks if I would not agree that it is more important that people living in crowded areas are allowed to attend swimming pools rather than being kept away because of high attendance charges.
The Council's aim in providing swimming facilities is to meet public demand and encourage usage by fixing charges at modest levels. I am aware that Mr. SULKE had objected to the increases in entry fees which were introduced on 1 June. The sessional rates were increased from $5 to $6 for adults and from $2 to $3 for children; the previous levels had been in force since April 1983.
The new fees were approved in April by the Recreation and Finance Select Committees following consideration of the costing review of existing and projected operating costs. In 1983–84, the total cost of operating 10 pools was $51.93 million. The estimated cost in 1985-86 was $76.39 million, partly due to the opening of three new pools (Lai Chi Kok on 26.5.84; Wanchai Training Pool on 1.12.84 and Sham Shui Po estimated to operate from summer 1985).
Assuming no increase in admission charges, it was estimated that the operating deficit in relation to total cost i.c. steadily increasing costs to be borne by the ratepayer, would rise from $43.2 million in 1983-84 to $58.9 million in 1985-86. Against this background, it was considered not unreasonable to introduce some increased charges. So on the basis of the information provided, at that time, I would not agree that the Council's decision was an entire mistake.
At the same time, having regard to actual demand reflected by attendances, the Department was requested to review operating costs and opening hours to determine where economies might be made. This exercise is still in progress and I understand that separate proposals will be submitted for Council's consideration before the next swimming season. Now I think whether one deems something is a mistake or not, probably depends whether you look at from a view of social subsidy or the users or suppliers of the services.
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Turning now to the second part of the question and a possible reduction of charges. The peak swimming season is now over. I think this aspect must therefore now await consideration in the context of next year's review of swimming pool admission fees. This is an annual exercise (which does not necessarily result in increased charges), and due account will be taken of this summer's attendance levels and other relevant factors at the time.
On the final part of the question, I certainly would agree with Mr. SULKE that it is not Council's aim to discourage attendance at swimming pools particularly by children.
MR. SULKE (in English):—Mr. Chairman, the receipts according to the figures I have got here went down by HK$1.5 million, which means in fact an increased subsidy. I hope that the chairman of the select committee will use his normally very good commercial sense when he thinks about fixing next year's charges.
MR. YOUNG (in English):—Yes, Mr. Chairman, I admit that for four months in the summer total gate receipts did go down by $1.5 million. For the first three months of this year it was in fact up by $1.1 million, so total accumulative revenue up to the end of September was down by roughly $363,000. Looking at the latest figures submitted for our budget for next year, which will be discussed at tomorrow morning's Recreation Select Committee meeting, the Department is still projecting a rather small decrease in total revenue this year.
Whether or not, maintaining the original charges would have produced more revenue, really depends on the elasticity of demand for swimming pool services. We cannot say that the sole factor for the decrease in patronage this year was entirely due to price, although I am sure it is somewhat related. Information I have in hand shows that not only did the Patronage in Urban Council swimming pools decrease, but also in the New Territories where there was no increase attendance also dropped by 14 per cent. Another significant thing is Ocean Park where I do have some figures. They experienced a drop of 27 per cent overall over last year in their figures and if you take the summer alone it was a drop of 30 per cent. There are many factors that must be taken into account in swimming pool attendance. One is fees, secondly what kind of weather we have and thirdly of course changing patterns in consumer demand. I am sure we will take all these factors into account when we next discuss the issue.
CHAIRMAN (in English):—On a point of clarification, MR. YOUNG, did I hear you say $363 million or $363,000?
MR. YOUNG (in English):—I am sorry, $363,000.
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months dropped by HK$11⁄2 million. Would the Chairman of the Recreation Select by children dropping by over 40 per cent. At the same time our income in the four
Committee not agree that in view of these figures it was a mistake to raise swimming pool charges and recommend therefore to lower swimming pool charges to encourage larger attendance, and would he not agree that it is more important that children living in crowded areas are allowed to attend swimming pools rather than be kept away from them because of high attendance charges?
MR. HOWARD H. W. YOUNG, CHAIRMAN OF THE RECREATION SELECT COMMITTEE, replied as follows (in English):---MR. SULKE's question is in three parts.
The first part asks if I would not agree that, in view of actual attendances and revenue in the period March to September 1985 as compared with the same period last year, it was a mistake to raise swimming pool charges.
The second part asks if I would not agree to lower swimming pool charges to encourage larger attendance.
The third part asks if I would not agree that it is more important that people living in crowded areas are allowed to attend swimming pools rather than being kept away because of high attendance charges.
The Council's aim in providing swimming facilities is to meet public demand and encourage usage by fixing charges at modest levels. I am aware that Mr. SULKE had objected to the increases in entry fees which were introduced on 1 June. The sessional rates were increased from $5 to $6 for adults and from $2 to $3 for children; the previous levels had been in force since April 1983.
The new fees were approved in April by the Recreation and Finance Select Committees following consideration of the costing review of existing and projected operating costs. In 1983–84, the total cost of operating 10 pools was $51.93 million. The estimated cost in 1985-86 was $76.39 million, partly due to the opening of three new pools (Lai Chi Kok on 26.5.84; Wanchai Training Pool on 1.12.84 and Sham Shui Po estimated to operate from summer 1985).
Assuming no increase in admission charges, it was estimated that the operating deficit in relation to total cost i.c. steadily increasing costs to be borne by the ratepayer, would rise from $43.2 million in 1983-84 to $58.9 million in 1985-86. Against this background, it was considered not unreasonable to introduce some increased charges. So on the basis of the information provided, at that time, I would not agree that the Council's decision was an entire mistake.
At the same time, having regard to actual demand reflected by attendances, the Department was requested to review operating costs and opening hours to determine where economies might be made. This exercise is still in progress and I understand that separate proposals will be submitted for Council's consideration before the next swimming season. Now I think whether one deems something is a mistake or not, probably depends whether you look at from a view of social subsidy or the users or suppliers of the services.
HONG KONG URBAN COUNCIL
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109
Turning now to the second part of the question and a possible reduction of charges. The peak swimming season is now over. I think this aspect must therefore now await consideration in the context of next year's review of swimming pool admission fees. This is an annual exercise (which does not necessarily result in increased charges), and due account will be taken of this summer's attendance levels and other relevant factors at the time.
On the final part of the question, I certainly would agree with Mr. SULKE that it is not Council's aim to discourage attendance at swimming pools particularly by children.
MR. SULKE (in English):—Mr. Chairman, the receipts according to the figures I have got here went down by HK$1.5 million, which means in fact an increased subsidy. I hope that the chairman of the select committee will use his normally very good commercial sense when he thinks about fixing next year's charges.
MR. YOUNG (in English):--Yes, Mr. Chairman, I admit that for four months in the summer total gate receipts did go down by $1.5 million. For the first three months of this year it was in fact up by $1.1 million, so total accumulative revenue up to the end of September was down by roughly $363,000. Looking at the latest figures submitted for our budget for next year, which will be discussed at tomorrow morning's Recreation Select Committee meeting, the Department is still projecting a rather small decrease in total revenue this year.
Whether or not, maintaining the original charges would have produced more revenue, really depends on the elasticity of demand for swimming pool services. We cannot say that the sole factor for the decrease in patronage this year was entirely due to price, although I am sure it is somewhat related. Information I have in hand shows that not only did the Patronage in Urban Council swimming pools decrease, but also in the New Territories where there was no increase attendance also dropped by 14 per cent. Another significant thing is Ocean Park where I do have some figures. They experienced a drop of 27 per cent overall over last year in their figures and if you take the summer alone it was a drop of 30 per cent. There are many factors that must be taken into account in swimming pool attendance. One is fees, secondly what kind of weather we have and thirdly of course changing patterns in consumer demand. I am sure we will take all these factors into account when we next discuss the issue.
CHAIRMAN (in English):-On a point of clarification, Mr. YOUNG, did I hear you say $363 million or $363,000?
MR. YOUNG (in English):—I am sorry, $363,000.
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