Hong Kong expects its position as the main travel hub to China will boost tourist arrivals and spending when Beijing hosts the 2008 Summer Olympic Games, the territory's tourism board said.
Beijing, which plans to invest US$20 billion in road, subway and stadium projects to prepare for the event, was awarded the games yesterday, beating rival bids from Toronto and Paris.
That should help Hong Kong's tourism industry and companies that do business in China. Tourism, which contributed US$7.7 billion to Hong Kong's economy last year, is one of the city's biggest industries.
"The Olympic Games in Beijing will provide a significant boost to Hong Kong's tourism industry," Mark Lettenbichler, chairman of Hong Kong's Hotels Association, said in a statement.
Companies such as Hong Kong Dragon Airlines Ltd stand to reap the rewards. Dragonair currently has 37 flights to Beijing -- more than any non-mainland airline -- and plans to double its fleet by the end of 2005.
"It's great news not just for Beijing, but for the whole of the country, including Hong Kong," Stanley Hui, Dragonair chief executive, said in a statement. "The world will be visiting China in 2008 and Hong Kong will be a prime gateway."
China-related businesses that are traded on Hong Kong's stock market may also benefit. TravelSky Technology Ltd, Shangri-La Asia Ltd, Beijing North Star Co and Beijing Enterprises Holdings Ltd will benefit most from the Games, Goldman Sachs Group Inc said in a research report last week.
In New York Friday after the announcement, shares of China-related companies rallied.
Chinadotcom Corp, a Hong Kong-based pan-Asian Internet company that trades under the ticker "China," rose 35 percent Friday to US$4 a share. That is it's biggest single day rise in a year and its highest price since March.
China's big three Internet operators also rose. Netease.com Inc rose 21 percent to US$1.47, its biggest one-day gain in three months. Sohu.com rose 10 percent Friday to US$1.80 a share, the highest level since Jan. 3. Sina.com also gained 10 percent Friday to US$1.90.
Already Hong Kong's business are trying to find ways to leverage on an event that is seven years away.
Tom.com Ltd, a Web site business controlled by Li Ka-shing, Asia's richest man, signed an agreement to organize the Chinese Gymnastics Association's advertising, marketing and commercial activities.
Through its YC Co sports events organizing unit, tom.com also has applied to manage advertising and events of the Chinese Basketball Association.
Tom.com "will leverage on business opportunities arising from China's Olympic success and aims to be the No. 1 sports marketing and event [manager] in China," Michelle Leung, tom.com chief operating officer, said in a statement.
That's not all Li Ka-shing is doing. The Cheung Kong Center, owned by Li and where his offices are, will light up Hong Kong's skyline with a special light display for a week to celebrate Beijing's successful bid to host the Olympics.
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