Hong Kong’s retailers will have to settle for slower growth due to a shift in the travel preferences of mainland tourists, UBS analysts said, suggesting that a decade-long bull run seen in the sector on the stock market has come to an end.
Many mainland tourists now choose other overseas destinations over Hong Kong, UBS said, citing a survey conducted on over 2,900 people.
The respondents indicated that they will make two trips on average in the coming 12 months.
Yet, most of them prefer visiting Japan or Korea, rather than Hong Kong, if they undertake repeat trips, the survey showed, according to the Hong Kong Economic Journal.
The decline in the number of mainland travelers to Hong Kong for multiple-day trips has only begun, with no clue on the bottom of the downtrend, UBS strategist Spencer Leung was quoted as saying.
Such mainland travelers more often take direct flight overseas instead of transferring through Hong Kong as before, adding uncertainties to the city’s economy.
The Institute of Economics and Business Strategy at the University of Hong Kong, meanwhile, has revised down its estimates on the city’s economic growth this year to 2 percent from a previous forecast of 2.4 percent.
Weaker retail sales, services exports and personal consumption and a slowdown in the Chinese economy will all contribute to lackluster Hong Kong growth, said Wong Ka-fu, principal lecturer for economics at the institute.
Translation by Vey Wong
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