Hong Kong Tourism Industry Under Siege

Hong Kong Tourism Industry Under Siege

Photo credit: Freedomwall

As the global economy slows – along with China’s – tourism operators feel the pinch

As late as a few months ago, Hong Kong’s residents were up in arms over the influx of mainland tourists, who were called “locusts” for their tendency to crowd out the locals to denude stores of vast amounts of merchandise, with so-called parallel traders buying up as much as certain goods including milk powder as possible to take back over the border to sell at a markup.

Mainland women were accused of taking maternity ward beds away from local women so that their children could gain right of abode in the city. From 2003, with the agreement with China for the Closer Economic Partnership Arrangement that freed up trade and movement by tourists, arrivals from China shot from a handful to more than 31 million in 2014.

Now, however, with the mainland hit by a creeping downturn and the extensive anti-corruption campaign that has kept mainland government officials out of Louis Vuitton and Cartier, the shoe is on the other foot, and the shoe might not be Gucchi.  The death of a mainlander last week after a beating in a Kowloon shop has highlighted the predatory practices of tour operators who haul their passengers from landmarks to cut-price and often disreputable shops where they are browbeaten into buying merchandise they don’t need and don’t want.  Now merchants are afraid the good days are over.

Japan Looking More Attractive

”A couple of years back in Japan the rate was US$1 to ¥80,” said Wong Ka-fu, an economics and finance professor at Hong Kong University. “Now it is US$1 to ¥120. So now Japanese goods are a lot cheaper, which makes Japan much more attractive for tourists. Japan is becoming attractive for Hong Kong people as well.”  At the same time, he said, the yen can play a key role changing the direction of European tourists in Asia to Japan instead of Hong Kong.    

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Economics and Finance Prof. Ka-Fu Wong

Although Hong Kong’s tourism industry is far from stagnating – visitor arrivals in August were 4.55 million compared to 4.9 million a year earlier, down 9.2 percent – those losses are apparent to the people involved in the tourism business. They say the high prices of food and housing, including hotel rooms, are the primary reasons for the declining number of visitors along with the mainland slump. They are worried that the high prices can make tourists bypass Hong Kong, which means their businesses will suffer. 

The people engaged in the tourism industry are able to provide hands on descriptions of the development of the industry. They say the tourism season in Hong Kong starts from October, when the humidity rate decreases and the weather becomes cooler.  Here is a snapshot of the situation on the ground across the territory

Kowloon

In Tsim Sha Tsui, the shopping mecca at the tip of Kowloon across Victoria Harbor from the Central District, ticket sellers are beseeching passersby to take a ride on their tour buses and complaining that there are fewer tourists this year than last.

Bus operators have set up compelling offers including a ticket for a 24 hour tour package at HK$430 (US$55). It includes all-day tours to the places of interest of Hong Kong. Tourists have an opportunity to listen commentaries about each place in up to 10 languages, with adjustable earphones. “The drop of tourists this year is obvious. I’m not saying much, but at least 10 percent certainly,” said Mani Albe.  Albe said that even tourists from Mainland China are not as many as before. 

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Mani Albe selling tickets

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