Kwok-Lung Hongchoy, chief executive of The Link Real Estate Investment Trust (Link REIT, 00823.HK), has warned that the retail sector in Hong Kong will be hit hard if authorities cut the quota on mainland individual visitors, the Hong Kong Economic Journal reported Thursday.
The impact of the cut, which has been proposed by the government in response to requests from sections of the community, will spread to other areas and affect things such as the employment rate six to nine months after the policy implementation, Hongchoy was quoted as saying.
Such chain effect is likely to drag sales at the malls and shopping centers managed by Link REIT at a later stage, he said. However, the impact on the company may not be very big as many retailers at link REIT’s properties are focused on the mass-market and necessities, the executive added.
About 68 percent of respondents in an online survey conducted by mainland publication Southern Weekly have said they had no plan to visit Hong Kong in the next 12 months. Among those people, a majority cited potential discrimination as the reason.
Hongchoy said the 9.8 percent drop in the city’s retail sales in April, and an almost 40 percent slide in sales of jewelry and luxury goods in particular, are worrying.
Separately, analysts at Macquarie Group have said that they believe any cut in the number of mainland travelers would affect investor sentiment.
As Hong Kong’s economy relies in large part on consumption by mainlanders, the investment bank feels the chances of the government actually implementing any visitor number cut is quite low.
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