HK Trams raises fare to counter falling ad and passenger revenue

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Hong Kong Tramways is expected to raise its fare on trams by 15.4% in July due to its declining profit margin. Hong Kong Trams revenue is mainly composed of passenger fares and non-fare box revenue from advertising. Passenger fares have accounted for around 50% of Hong Kong Tramways’ total revenue in recent years.

Hong Kong Trams’ advertising revenue has also decreased over the years, from HK$120.7 million in 2018 to HK$107.6 million in 2021. advertisements and most tram stop shelters with commercial potential were used.

Under the new fare system, passengers aged 12 or older will pay HK$3 from July 11, 2022, up from HK$2.6 currently. At the same time, fares for children aged 3 to 11 will increase from HK$1.3 to HK$1.5. The monthly ticket will be priced at HK$260 after the fare adjustment, compared to HK$220 before. A government spokesperson said the Hong Kong government should ensure that Hong Kong trams have the financial capacity to provide economical, efficient and quality tram services at reasonable fares.

“It has unique historical significance and has always been received by the local community and visitors, and has represented the collective memory of Hong Kong citizens. In addition, Hong Kong Tramways has implemented various improvement projects and introduced innovative measures to improve tram services to provide a safer and more comfortable experience for passengers, while preserving its historic value After considering all relevant factors, the government considered the increase in fares necessary to maintain the stable operation of Hong Kong trams, and the level of increase proposed by Hong Kong trams is acceptable,” the spokesperson said.

The government added that Hong Kong Trams’ profit margin plunged from 18% in 2018 to -1.3% in 2021. “Given its current financial situation, the fare adjustment is necessary to maintain its financial viability.” , said the spokesperson. Commenting on the rate increase, Peter Shiu, the Liberal lawmaker representing Legco’s functional wholesale and retail constituency, said: “It’s hard for retailers to get sales under the pandemic, resulting in fewer advertisements , so increasing the adult fare to HK$3 is acceptable.”

Shiu also noticed that the tram operator had incorporated noise reduction features on the tram tracks, which could also lead to increased operating costs.

According to a fare increase request document submitted to the Transport Legislative Council Group, Hong Kong Tramways has about 510 employees, operates 168 trams and operates seven lines. It has also provided satisfactory service to passengers over the years. From 2018 to 2021, the number of complaints received per million passenger trips by the Ministry of Transport against Hong Kong Tramwayd per year remained at a low level of 1.2 to 2.3. The trams carried around 50,000 passenger trips a day and faced competition from other means of public transport. Additionally, the current adult fare of HK$2.60 is 38% lower than the cheapest bus route also serving the North Shore of Hong Kong Island.

As one of Hong Kong’s most iconic public transports, organizations in the city have sometimes sponsored free tram rides to engage the public. For example, he had a new collaboration for his charity program called “Free Ride Day,” with Hong Kong idol Keung To’s fan club KeungShow HKFanClub.

The fan club sponsored a one-day free tram ride on April 30, which served as a gift for Keung, whose birthday falls on the same day. According to a press release, the gesture was also intended to spread messages of love and positivity to the Hong Kong community. Keung’s fan club also sponsored Free Ride Day in alignment with the idol’s charity work. The Free Ride Day was billed as the first of its kind, having been initiated and sponsored by a local community group – Keung Fans. Hong Kong Tramways also dedicated its own resources and manpower alongside Keung’s fan club for the event, which included hosting a charity fan-singing event, which the company hoped to bring to the city ​​a bit of joy in the midst of the pandemic.

In a previous interview with INTERACTIVE-MARKETING, Nixon Cheung, commercial and brand manager at Hong Kong Tramways, said that after a century of existence, the brand wanted to remain a city icon that would make Hong Kongers proud. Cheung shared that the company has also teamed up with the Hong Kong Philharmonic Orchestra and famous musician Chiu Tsang Hei, to rearrange a piece of music using the signature “Ding Ding” sound.

“We see this as an incredible way to make our brand’s famous sound even more memorable and address our lifestyle image as it is perceived by many,” he said. Cheung added that the brand is very proud of its history and the image it has. created since 1904, and truly believed that even though he was “old in age”, he was still “young at heart”.

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