Hong Kong’s local tourism to expand after 99.9 percent slump in visitor arrivals

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Transformations such as promoting local tourism and re-examining the industry’s possibilities could determine its survival.

Photo: Hong Kong Film Awards Statue, Avenue of Stars, Hong Kong courtesy of Ian Muttoo / CC BY-SA 2.0.

The COVID-19 border closure poses tough challenges on the tourism sector and related industries in Hong Kong as visitor arrivals dropped almost 100 percent in May. 

It is the second consecutive month that a 99.9 percent plunge in tourist arrivals has been recorded, according to the Hong Kong Tourism Board. Hong Kong hosted 8,139 visitors in May.  5,670 were from Mainland China, in dismal contrast to over 5.9 million visitors in May 2019. The hotel room occupancy rate also fell from 88 percent in May 2019 to 37 percent,  a drop of more than 50 percent compared to last year. 

Hong Kong’s downward slide began in July of 2019 as the anti-extradition protests gathered steam. A 4.8 percent in July 2019 was followed by months of poor numbers and escalated with the following travel restrictions implemented by the Hong Kong Government on 25 March: 

Foreigners travelling to the city by plane, as well as non-Hong Kong residents coming from the Mainland, Macao, and Taiwan and have been to overseas countries in the past 14 days, will be denied entry. All travellers, including Hong Kong residents, are subject to compulsory quarantine for two weeks upon their arrival except for those coming with the purpose of “manufacturing operations, business activities or provision of professional services in the interest of Hong Kong’s economic development, or is necessary for the public interest of Hong Kong”. 

A new way forward

“The idea at the moment is that destination marketing starts with the local community. Get local consumption happening first, and then for those that cannot come to Hong Kong at the moment, it keeps them interested,” says Professor Brian King, the Associate Dean of the School of Hotel and Tourism Management at Hong Kong Polytechnic University. 

He finds the situation an opportunity for the authorities to reassess tourism in terms of its focus on the local and closer-by markets and issues like over-tourism with mainland visitors. One of the approaches he suggested is building the pride of Hong Kong people and encouraging them to travel around the town when outbound travel is restricted. 

“I think we need to see this as the quality of life issue so it goes beyond business and economics. It’s about our environment, it’s about our culture, it’s about the social side.”

The “Holiday at Home” Campaign launched by the Tourism Board in June primarily targets residents by promoting local lesser-known sightseeing spots and activities and providing more than ten thousand dining, shopping, and entertainment offers on its webpage. Local tours can also be redeemed through spending. 

Meanwhile, Professor King said Hong Kong could anticipate more visitors from nearby regions such as the Greater Bay Area, Guangdong, and Southeast Asian countries when restrictions get loosened up because the long-haul market would take time to recover. As local and regional mobility is likely to be the “new normal”, he thought the city should take advantage of its geographical location and infrastructure and intensify the investments in domestic markets. 

Hong Kong International Airport

And more of the old stuff

Under the 2020-2021 Budget, Financial Secretary Paul Chan Mo-Po committed HK$700 million for the Hong Kong Tourism Board to step up promotion and restore the industry when COVID-19 is over. An additional HK$150 million is dedicated to organising initiatives such as Hong Kong pavilions, galleries, and pop-up shops in overseas cities. 

“We need to make sure that the recovery or the rebound works in a way that is positive for our local residents as well, and that’s going to require quite a sensitive approach,” he adds, “Obviously, it can’t go back to like it was before. We need to imagine what’s going to be like.” 

Regarding the recent travel advisory issued by countries including the United States, the United Kingdom, and Australia over the national security law, Professor King agrees that it might discourage some long-haul visitors. However, he expects Asian markets would still grow as travellers would be more interested in their “personal health, comfort, and the quality of the experience.”

Survival mode

In February, the Government established the Travel Agents Subsidy Scheme under the Anti-epidemic Fund. Each eligible travel agent could obtain a one-off subsidy of HK$80,000, and 98 percent of all licensed travel agents applied. The Travel Agents and Practitioners Support Scheme, which came under the second round of the Fund in April, offered a one-off subsidy ranging from HKD$20,000 up to HKD$200,000 to each travel agent, depending on the number of its employees. Staff and freelance practitioners would receive a monthly payment of HKD$5,000 for six months. Also, each licensed hotel could get a subsidy of up to HK$40,000. 

The tourism industry is one of the four major pillars of the Hong Kong economy and contributed to 4.5 percent to local GDP in 2018. In 2017, it employed 257,100 persons, accounting for 6.7 percent of the total workforce. According to the forecast conducted by Professor King and his team, tourism would be more likely to revive by the third quarter of 2021, while an optimistic scenario would be by the first quarter of 2021. 

Hong Kong is experiencing a third wave of COVID-19 infections as more than 200 local cases have been reported over the past two weeks, adding up to a total of 1,570 cases and eight deaths. 

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