Report sees economic benefits of Hong Kong s exhibition industry climb to HK$35.8 billion in up 18.6% from 2008

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1 Report sees economic benefits of Hong Kong s exhibition industry climb to HK$35.8 billion in up 18.6% from 2008 (Hong Kong, 15 November 2011) The latest in a series of biennial Economic Impact Study reports on Hong Kong s exhibition industry released today shows that activities associated with Hong Kong s exhibition industry contributed HK$35.8 billion (US$4.6 billion) to the local economy in 2010, equivalent to 2.1% of Hong Kong s total GDP, while generating the equivalent of 69,150 full-time jobs. Compared with findings in the previous report, which covered 2008, all the indicators moved upwards showing positive compound annual growth rates (CAGR). The report, commissioned by the Hong Kong Exhibition and Convention Industry Association (HKECIA), revealed that the exhibition industry continues to bring significant benefits to Hong Kong s economy not only by contributing substantial expenditure effects, but also by providing thousands of jobs for the exhibition industry and other service industries and supporting sectors, including hotel, food and beverage, retail, stand design and construction, and logistics and freight forwarding. The report attributes the strong growth of the past two years to the continued high level of global sourcing activities for products from Mainland China and other Asian countries. At the same time, businesses from around the world are increasingly looking to use Hong Kong s exhibition platform to introduce their products to the growing markets in Mainland China and other Asian markets. This is a situation that, according to the report, is likely to continue and will provide the city with ongoing exhibition growth opportunities. Mr Daniel Cheung, Chairman of the HKECIA, backed the report s assessment, noting clear signs that the world s centre of economic gravity is continuing to shift eastwards. Identifying local drivers for the growth shown by the study, he noted, This increasing business activity has come about due to the addition of new exhibitions, growth of recurrent shows at the two venues AsiaWorld-Expo and the Hong Kong Convention and Exhibition Centre (HKCEC), as well as increased exhibition space arising from the expansion of the HKCEC in The report gives precise estimates of various economic benefits arising from the exhibition industry, but also mentions the many important intangible benefits generated by the exhibition industry. These benefits are less easy to measure but are nevertheless very real. By way of

2 comment, Mr Cheung said, Exhibitions are important factors in raising Hong Kong s international status. Currently, Hong Kong hosts five of the world s largest trade exhibitions and seven of Asia s largest trade exhibitions. Record-breaking events like this reinforce and publicise Hong Kong s profile as a reliable, successful and dynamic place to do business of any kind, creating a momentum which keeps Hong Kong high in global public awareness as an ideal business location. Mr Cheung continued, The report confirms that the exhibition industry is a driving force behind Hong Kong s economic strength. Exhibition activities are key to the development of import and export opportunities, and are also essential marketing platforms by which our SMEs can make international business contacts without the expense of travelling overseas. Reflecting on the overall implications of the report, Mr Cheung commented, While we are pleased with the findings of this carefully researched and objective report, we need to be mindful of ongoing competition from the region. To take full advantage of market trends, Hong Kong s exhibition industry must remain proactive and continue to invest so that our facilities remain second to none, and our service standards unmatchable. KEY FINDINGS OF THE ECONOMIC IMPACT STUDY 2010: Economic impact of Hong Kong s exhibition industry in 2010 and 2008 Area Benefits (2010) Benefits (2008) Compound Annual Growth Rate (CAGR) Expenditure effects HK$35.8 billion HK$30.2 billion 8.9% (US$4.6 billion) (US$3.9 billion) Fiscal impact HK$1.1 billion HK$920 million 10.7% (US$141 million) (US$118 million) Employment 69,150 FTE 61,000 FTE 6.5% Expenditure effects continue to grow because of increasing exhibition activity Hong Kong s exhibition industry contributed expenditure effects of around HK$35.8 billion (US$4.6 billion) to the Hong Kong economy in 2010, up by 18.6% from 2008, representing a CAGR of 8.9%. This was equivalent to 2.1% of GDP, up from 1.8% in Direct, indirect and induced expenditure represent 50%, 30% and 20% of total expenditure respectively.

3 Direct expenditure, which covers expenditure specifically on exhibitions and exhibitionrelated activities, amounted to HK$17.9 billion (US$2.3 billion). 55% was visitor expenditure contributed by international and local exhibition visitors, and the remaining 45% was business expenditure generated by exhibition organisers and exhibitors. Expenditure by exhibition visitors amounted to HK$9.8 billion (US$1.3 billion) in It was spilt 90:10 between international and domestic visitors respectively. The food and beverage (F&B), retail and hotel sectors were the largest recipients of direct visitor expenditure, accounting for more than 74%, or HK$7.3 billion (US$936 million), in Business-related expenditure amounted to HK$8.1 billion (US$1.04 billion) in 2010, representing a CAGR of 22% from Fiscal impact grows with increased visitor and business spending The tax take enjoyed by the Hong Kong Government in 2010 as a result of exhibition activities is estimated at around HK$1.1 billion (US$141 million), based on the total expenditure effects of HK$35.8 billion (US$4.6 billion). This represents an impressive CAGR of 10.7%. Fiscal benefit is derived from three taxes: Profits tax: HK$650 million (US$83.3 million) Salaries tax: HK$418 million (US$53.6 million) Airport tax: HK$59 million (US$7.6 million) Equivalent of 69,150 full time jobs provided by the exhibition industry Full-Time Equivalent (FTE) employment amounted to around 69,150 in 2010, representing a CAGR of 6.5%, up from 61,000 in Around 2,650 FTE employees, or 4%, were directly employed by venues and exhibition organisers. The remaining 96%, or 66,500 FTE jobs, was provided across various supporting sectors. Of this group, around 61%, or 41,000 FTE jobs, was directly involved in hotel, retail, and F&B, while the remaining 39%, or 25,500 FTE jobs, was spread across other sectors such as stand construction, advertising, freight and logistics.

4 International exhibition visitors and exhibitors contributed more than overnight tourists The report showed that international exhibition visitors spent on average 67% more than overnight tourists while international exhibitors spending was on average 30% higher than that of overnight tourists. International exhibition visitors and international exhibitors spent on average HK$11,219 (US$1,438) and HK$8,819 (US$1,131) per visit respectively, compared to HK$6,728 (US$863) per visit by overnight tourists. ##### NOTES TO EDITORS: About the Economic Impact Study 2010 Carried out by professional services firm KPMG Transaction Advisory Services Limited, the 2010 Economic Impact Study report is the fourth in a series of biennial reports commissioned by HKECIA that began by covering the year The Study was funded by AsiaWorld-Expo, the Hong Kong Convention and Exhibition Centre, the Hong Kong Tourism Board and the Hong Kong Trade Development Council. These organisations provided KPMG with information for analysis. The Study used the standard methodology common to the analysis of exhibition industries in other economies, and widely recognised internationally. Five of world s largest trade exhibitions held in Hong Kong (based on 2011 edition): World s biggest event focusing purely on commercial aviation Asian Aerospace International Expo and Congress (a biennial event), organised by Reed Exhibitions World s biggest electronics event HKTDC Hong Kong Electronics Fair (Autumn Edition), organised by Hong Kong Trade Development Council World s biggest gifts event HKTDC Hong Kong Gifts & Premium Fair, organised by Hong Kong Trade Development Council World s biggest timepiece event HKTDC Hong Kong Watch and Clock Fair, organised by Hong Kong Trade Development Council World s No.1 jewellery event September Hong Kong Jewellery & Gem Fair, organised by UBM Asia

5 Seven of Asia s largest trade exhibitions held in Hong Kong (based on 2011 edition): World s second largest and Asia s largest beauty event Cosmoprof Asia, organised by UBM Asia Asia s biggest fashion event HKTDC Hong Kong Fashion Week for Fall/Winter, organised by Hong Kong Trade Development Council Asia s biggest homeware event HKTDC Hong Kong Houseware Fair, organised by Hong Kong Trade Development Council Asia s biggest entertainment event HKTDC Hong Kong International Film & TV Market (FILMART), organised by Hong Kong Trade Development Council Asia s biggest licensing show HKTDC Hong Kong International Licensing Show, organised by Hong Kong Trade Development Council Asia s biggest toy event HKTDC Hong Kong Toys & Games Fair, organised by Hong Kong Trade Development Council Asia s biggest wine event HKTDC Hong Kong Wine & Spirits Fair, organised by Hong Kong Trade Development Council About the Hong Kong Exhibition and Convention Industry Association The Hong Kong Exhibition and Convention Industry Association (HKECIA) was established in 1990 to promote Hong Kong as a world-class exhibition and conference destination and the trade fair capital of Asia Pacific. It works to represent the interests of all members involved in the exhibition and convention industries, and provides a unified voice in dealing with the government, legislative and statutory bodies, the media and public organisations, on all matters associated with the role of the exhibition and convention industry in Hong Kong s economy. In addition, it offers training and educational programmes, and collects, analyses and distributes information and statistics relating to the industry. Currently, HKECIA has 106 members including exhibition organisers, venue managers and operators, contractors, hotels, and travel agents. HKECIA is a member of UFI The Global Association of the Exhibition Industry, and the Hong Kong General Chamber of Commerce. For enquiries, please contact: Ms Tina Cheng Executive Manager Hong Kong Exhibition and Convention Industry Association Tel: (852) Fax: (852)