May 2014 was probably the best time for Hong Kong tourism. About 380,000 mainlanders flooded the territory for the Golden Week holidays.
Shoppers formed long queues at the Louis Vuitton shop in Harbour City as well as other posh boutiques in Tsim Sha Tsui and Causeway Bay.
Jewelry and watch stores were all crowded. Some guesthouses charged as much as HK$1,000 a night.
What a difference two years make.
For this year’s Labor Day holiday, only about 150 mainland tours are coming to Hong Kong. That’s half of the number last year.
Some hotels have taken a leaf out of their Thai peers’ book and are now offering “buy two, get one free” bookings. Top fashion brands are cutting prices to bolster sales.
In fact, some may wonder what’s so “golden” about the first week of May when it doesn’t bring in as much gold as it used to.
Look at Tsim Sha Tsui, a vibrant district that offers everything from the yummy fishballs and cheap hostels to luxurious handbags and five-star hotels.
Despite offering the best skyline view of Hong Kong, TST isn’t attracting enough mainland tourists any more.
The Urban Council Century Garden used to see thousands of mainland tourists waiting for their group meals. Well, not any more.
The fashionable Granville Street, where some famous movie artists pick up bargain items, now have 21 vacant shops.
The joke is that mainland tourists still go to TST, but not the one in Hong Kong; TST is for Tokyo, Seoul and Taipei. (Japan, however, may no longer be as attractive for Chinese tourists; the yen shot up 3 percent on Thursday.)
The sense of gloom has crept from top to bottom. Consider the business of guesthouses these days: they’re now offering a room for HK$200 a night – even for HK$100 daily – but still find it hard to get customers.
Sam Lin, chairman of Hong Kong Association of Hostels, said they used to have 90 percent occupancy during the Golden Week, but so far they just have less than 10 percent booking for the first week of May.
The same situation has been going on for more than a year. He described it as worse that the SARS period in 2003.
In order to pull through the difficult times, some guesthouse operators have rented out their rooms as subdivided flats on a monthly basis, Lin said.
This may be good news for low-income locals. Some of these guesthouses are more competitive than the traditional subdivided flats in terms of location, flexibility and pricing.
Still, we wonder if these hostels can survive the brutal summer, which happens to be a weak tourist season.
It’s not that bad, really. The weak retail and tourism sentiment may just prod some of the greedy landlords to rethink their crazy rents and, perhaps, invite more fishball vendors to take the stalls vacated by jewelry shops, as we have seen on Haiphong Road in Tsim Sha Tsui.
Also, the shares of some big-name tourism plays such as Sa Sa International (00178.HK) and Chow Tai Fook (01929.HK) are rebounding, suggesting that the sector has gone too low that there’s no way for it to go but up.
What will happen in May next year, the eve of the 20th anniversary of Hong Kong’s return to China? Well, it’s still anybody’s guess.
– Contact us at [email protected]