26 October 2016
Mainland visitors have changed their purpose of visit from staying overnight for that tourist experience to shopping and buying daily necessities. Photo: HKEJ
Mainland visitors have changed their purpose of visit from staying overnight for that tourist experience to shopping and buying daily necessities. Photo: HKEJ

What’s the real score on Hong Kong tourism industry?

Hong Kong localists launched a fresh round of protests against parallel trading in Sheung Shui on Sunday, and government officials lost no time in blaming such hostile actions against mainlanders for the weak performance of inbound tourism in recent months.

Once again, the government of Leung Chun-ying is using a political issue to explain an economic problem.

Scores of people joined the protest march, the first demonstration of its kind for months, and police responded with a heavy presence around the MTR Sheung Shui station. A leader of the organizing group was arrested.

Gregory So Kam-leung, the Secretary for Commerce and Economic Development, berated the protesters for being “extremely irresponsible”.

He said such actions will make mainlanders less willing to visit Hong Kong and thus hurt the local tourism industry.

He urged the demonstrators to consider the impact their action would have on the livelihood of hundreds of thousands of workers in the retail and catering industries.

It’s so easy to blame the protesters for the apparent slump in visitor arrivals, especially those coming from the mainland. But is that really the case?

More than three million mainland tourists still visit Hong Kong each month, their numbers ranging from 3.24 million to 3.85 million, despite the series of protests and the government’s move to tighten visa arrangements for those crossing the border from the north.

Retail sales only registered a slight drop last month from a year earlier.

Many pro-establishment politicians said the current situation of Hong Kong’s retail market is much worse than the during the SARS outbreak in 2003.

But official figures show that Hong Kong has yet to suffer from the slight drop in the number of tourists, and the slide in retail sales this year is nothing compared to the impact of SARS on the business in 2003.

In April 2003, when SARS hit Hong Kong, retail sales plunged 15.2 percent from a year earlier. By comparison, retail sales only fell 2.1 percent in April this year.

Retail sales fell 6.2 percent for the first seven months of 2003 but declined only 1.8 percent for the same period this year.

Also, pro-government politicians seem to have ignored the fact that the retail market has been expanding rapidly over the past decade following the launch of the individual visitor scheme.

Total retail sales for the first seven months of this year reached HK$283 billion, compared with only HK$99 billion in 2003.

The figures suggest that what panicky politicians tend to consider as a major slump in the tourism and retail industry could just be a healthy correction from the phenomenal growth of the past several years.

The numbers also show that despite the perception that protests against parallel trading are antagonizing mainlanders or prompting them to skip Hong Kong, Chinese tourists still come to the territory in droves.

Besides, the purpose of their visit has changed from staying overnight for that tourist experience to shopping and buying daily necessities. In short, many mainlanders look at Hong Kong as their shopping mall rather than a vacation destination.

The depreciation of certain foreign currencies like the euro and the Japanese yen has prompted Chinese visitors to look to other destinations where the currency is cheaper against the renminbi. 

So instead of visiting Hong Kong, they now prefer to go to Japan or Europe where their money can go a way longer than when they spend it on goods and services denominated in Hong Kong dollars.

There’s also China’s recent stock market rout which could dampen the enthusiasm of many mainlanders to pursue their travel plans.

The problem may be in the tourism industry itself. Hong Kong lacks new attractions to attract mainland visitors to visit the city frequently. 

The latest significant tourism venue in the territory is Hong Kong Disneyland, which opened a decade ago. This means that for the past 10 years, Hong Kong has not made any significant investment in tourism in terms of facilities or themes to lure the tourists.

Hong Kong’s tourism industry should also reduce its reliance on Chinese tourists to support the entire sector.

Both the government and industry practitioners should realize that from the Chinese perspective, Hong Kong is no longer regarded as a tourist destination.

As such, the government should focus on other aspects of Hong Kong, such as its historical and cultural assets, to boost the tourism business.

It could accentuate Hong Kong’s colonial background and emergence as “Asia’s world city” to offer new attractions for tourists.

Hong Kong people paid a price for the success story of the tourism industry in the past decade by relying too much on mainland visitors.

It’s about time we went back to normal.

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EJ Insight writer

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