Nevertheless, the development of the tourist industry is considerably vulnerable. It has been recognised that Hong Kong
is losing its competitive edge as a shopping and dining paradise as the price level in Hong Kong escalated before 1997.
In this regard, Hong Kong is facing challenges on two fronts: the price competitive of Hong Kong compared to long haul
markets is gradually disappearing. On the other hand, Hong Kong is also losing her price advantage over other cities in
Asia. Although the prices in Hong Kong have dropped after the Asian Financial Crisis in 1997, the price differential still
exists as many Asian countries devaluated their currencies substantially after the Crisis. This is a major concern in view
of the anticipated growth in shorter, infra-regional travel within the East Asia/Pacific Region.