Travelers aren’t visiting Hong Kong in the same numbers that they were before demonstrations there in 2019 and subsequent restrictions there in the years that followed turned it into a no-go area.
As the city reopened this year, Hong Kong has failed to reclaim its appeal as a worldwide retail haven, highlighting the harm done to its $360 billion economy by years of seclusion.
The number of visitors has decreased from before protests in 2019 and pandemic restrictions in the years that followed made Hong Kong.
A no-go area. June saw 42% fewer visitors than the same month in 2018. Hence, consumer spending is poor.
After removing numbers for 2019–2022, the value of retail sales that month was the lowest for any June since 2011.
Hong Kong fails to repair shopping
The scene contrasts sharply with that of the previous decade, when a growing number of mainland visitors jammed the city’s streets and swarmed for designer products. With 65 million visitors arriving in 2018.
An 11% increase from the previous year, Hong Kong became one of the most well-liked travel destinations worldwide.
While multinational businesses sought for a piece of that expenditure, the city held the title of having the most expensive shopping district in the world that year.
One of the difficulties facing the former British colony of Hong Kong as it works to revive its economy and international reputation is the decline of its appeal as a shopping destination.
Due to a lack of agreements, its once-vibrant finance sector is losing employees, and office rental costs have fallen as some companies have relocated to Singapore.
Because of American travel restrictions.
leader John Lee is unable to visit many Western nations, which limits his capacity to strengthen ties after the contentious national security law.
Even if mainland visitor numbers increase significantly, Chinese tourists won’t likely spend as much as they did previously.
The economic outlook is bleak, and falling home prices and rising youth unemployment have shaken consumer confidence.
Hong Kong’s cost of living is also rising due to the fast declining yuan. The local currency is now trading near its highest level against the yuan since 2008. It is tied to the dollar.
According to Simon Wong, head of the Hong Kong.
Federation of Restaurants and Allied Trades, many tourists from the mainland now favor neighborhood cafés and restaurants over spending money on fine dining and luxury items.
Before Covid, they spent approximately HK$500 ($64) each day on food, according to Wong. “Now days they spend just over half that amount.”
Local media stated that a shop in the tourist area of Tsim Sha Tsui was recently closed. It was leased for 70% less than Burberry Group Plc spent for it in 2014.
This serves as an example of how Hong Kong’s fortunes have declined. A Chinese jewellery company is the newest tenant.
According to Gary Ng, senior economist at Natixis, “People are looking for experiences beyond shopping only, which is probably the previous model that Hong Kong had.”
Hong Kong fails to repair shopping
Visitors’ lower spending is anticipated to have a negative impact on the local economy. Which is already feeling the strain after recovering in the first quarter of the year.
Last month, the government reduced the upper end of its growth projection for 2023. Stating that consumer spending and tourism will be the main drivers of growth for the remaining months of the year.
According to Alicia Garcia-Herrero, a senior research scholar at Bruegel. “Hong Kong’s development will slow down in the second half unless tourists return to pre-2019 levels.”
This year, the government sponsored a number of programmes to entice tourists. Improve the city’s reputation, including the “Hey Hong Kong” tourism campaign. Free plane tickets, and inviting celebrities and influencers to the city.
In a recent blog post, Finance Secretary Paul Chan.
Stated that the city has to increase both its competitiveness and its capacity to draw tourists. He also stated that the city would introduce more events, such as night bazaars and exhibitions.
Travel may be restricted by aviation issues as well. The airport in Hong Kong, which was formerly the third busiest. In the world in terms of the volume of foreign passengers.
Currently running at 60% of capacity compared to pre-Covid levels, partly because of a labour shortage. Hotels haven’t yet reached the standards of service they had prior to the pandemic.
Caspar Tsui, executive director of the Federation.
Hong Kong Hotel Owners, stated that “transport and logistics capacity. Greatly affecting how many tourists can come and stay overnight in Hong Kong.”
Hong Kongers aren’t picking up the burden as travel numbers continue to be low. Instead, thanks to the weaker yuan, many are opting to go to the mainland.
Where products and services are less expensive. There were around 5 million local travels to the mainland in June.