Guests posing for a gaggle photo on the “Let’s Go the Extra Mile” hospitality campaign launch ceremony on the Central Government Office in Hong Kong on June 3, 2024.
Nurphoto | Nurphoto | Getty Images
Hong Kong is asking service employees to be more courteous and smile in a bid to win back tourists. But high prices and competition from an ascending Shenzhen are larger issues, experts say.
Long revered for its luxury shopping, restaurants and nightlife, the glitzy financial hub has yet to see visitor numbers get well to levels seen prior to years of disruptions from social unrest and the Covid-19 pandemic.
In response, the Hong Kong government launched a campaign – titled “Let’s Go the Extra Mile” – encouraging frontline staff and members of the general public to reveal good hospitality and “reinforce Hong Kong’s brand as the perfect tourism destination.”
Speaking at a press conference last week, Chief Executive John Lee urged residents to be more courteous, to smile more and to “go the additional mile to advertise Hong Kong’s hospitality.”
The initiative comes after data showed 24 million total visitor arrivals in the primary 4 months of the yr, still at only 60% of the extent from the identical period in 2019.
Though those numbers marked a major increase from the previous yr, experts warn that full recovery faces greater barriers than grumpy Hong Kongers.
Strong dollar, high prices
“Considered one of the most important problems for the town is just that we’re expensive,” said Allan Zeman, chairman of Lan Kwai Fong Group, the main property owner and developer in Hong Kong’s iconic Lan Kwai Fong nightlife district.
Hong Kong’s currency is pegged to the U.S. dollar, which has helped the town’s status as a world financial center. Nonetheless, this can even make it pricey in comparison with many other Asian economies, especially now amid high rates of interest and a strong U.S. dollar.
“Tourists are finding that other places like Shenzhen and Japan are very, very low-cost as compared,” said Zeman, who also acts as an advisor to the Hong Kong government.
This dynamic is particularly true for mainland Chinese travelers — with the Chinese yuan depreciating significantly against the U.S. and Hong Kong dollars in recent months.
At the identical time, Zeman said mainlanders are making up a bigger share of tourists in the town as other nationalities have been slower to return. He said this poses an issue for local businesses as mainlanders are inclined to spend less because of travel preferences, shorter stays and tighter budgets amid economic troubles at home.
While Hong Kong’s Culture, Sports, and Tourism Bureau projects the variety of tourists to extend this yr, it estimated per capita expenditure by overnight visitors to drop to five,800 Hong Kong dollars ($742.64), down from last yr’s HK$6,939, based on figures released within the 2024 budget.
LKF, a preferred destination amongst tourists, was particularly hard hit when Hong Kong’s borders were closed in the course of the pandemic.
While Zeman says most of the neighborhood’s businesses have recovered strongly, there are currently some unused spaces — once a rare occurrence during pre-pandemic times.
Hong Kongers leave for bargains
Conversely, locals are increasingly taking trips to the neighboring mainland city of Shenzhen, based on economist Simon Lee Siu-Po, an honorary fellow on the Asia-Pacific Institute of Business on the Chinese University of Hong Kong.
“Each have develop into equal problems for Hong Kong,” he said.
While the town’s borders were closed in the course of the pandemic, nearby Shenzhen continued to turn into a top-tier Chinese city, Lee said. And newly built high-speed rails and a mega cross-sea bridge have made that journey more convenient than ever.
Shenzhen offers a big selection of food, entertainment and shopping options that may now compete with Hong Kong, said Lee, adding that prices for goods and services in the town are sometimes as much as two or thrice cheaper.
This dynamic explains why hundreds of Hong Kongers flocked to the Shenzhen border for the Easter holiday in late March, leaving the financial hub’s restaurants, bars and shopping centers empty, based on local media.
For your entire month of March, the town of seven.3 million people saw 9.3 million residents depart from its passenger traffic control points. Government data shows this was the single-highest monthly number of exits since a minimum of 1997 when the town was handed over from British rule to Chinese sovereignty.
Meanwhile, only about 3.4 million visitors entered the town that very same month.
These trends have taken their toll on Hong Kong businesses, with retail sales continuing to fall as local media reports on rapid rates of restaurant closures.
Based on a recent survey conducted by the Hong Kong Small and Medium Enterprises Association, 70% of local small and medium-sized firms in the town reported a decline in business performance in comparison with pre-pandemic levels.
Along with campaigns like “Let’s Go The Extra Mile,” Hong Kong authorities have also put aside HK$1.09 billion for citywide events like firework shows to spice up tourism and spending.
While the funds will help, combating high prices and competition from Shenzhen would require far more drastic efforts, said Lee and LKF’s Zeman.
