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Visitors posing for a gaggle photograph on the “Let’s Go the Further Mile” hospitality marketing campaign launch ceremony on the Central Authorities Workplace in Hong Kong on June 3, 2024.
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Hong Kong is asking service staff to be extra courteous and smile in a bid to win again vacationers. However excessive costs and competitors from an ascending Shenzhen are greater points, specialists say.
Lengthy revered for its luxurious purchasing, eating places and nightlife, the glitzy monetary hub has but to see customer numbers get well to ranges seen previous to years of disruptions from social unrest and the Covid-19 pandemic.
In response, the Hong Kong authorities launched a marketing campaign – titled “Let’s Go the Extra Mile” – encouraging frontline workers and members of the general public to exhibit good hospitality and “reinforce Hong Kong’s brand as the best tourism destination.”
Talking at a press convention final week, Chief Executive John Lee urged residents to be extra courteous, to smile extra and to “go the additional mile to advertise Hong Kong’s hospitality.”
The initiative comes after information confirmed 24 million total visitor arrivals within the first 4 months of the yr, nonetheless at solely 60% of the extent from the identical interval in 2019.
Although these numbers marked a big improve from the earlier yr, specialists warn that full restoration faces higher boundaries than grumpy Hong Kongers.
Sturdy greenback, excessive costs
“One of many largest issues for town is just that we’re costly,” mentioned Allan Zeman, chairman of Lan Kwai Fong Group, the foremost property proprietor and developer in Hong Kong’s iconic Lan Kwai Fong nightlife district.
Hong Kong’s forex is pegged to the U.S. greenback, which has helped town’s standing as a global monetary heart. Nonetheless, this will additionally make it expensive in comparison with many different Asian economies, particularly now amid excessive rates of interest and a strong U.S. dollar.
“Vacationers are discovering that different locations like Shenzhen and Japan are very, very low cost as compared,” mentioned Zeman, who additionally acts as an advisor to the Hong Kong authorities.
This dynamic is very true for mainland Chinese language vacationers — with the Chinese yuan depreciating significantly towards the U.S. and Hong Kong {dollars} in latest months.
On the similar time, Zeman mentioned mainlanders are making up a bigger share of vacationers within the metropolis as different nationalities have been slower to return. He mentioned this poses an issue for native companies as mainlanders are inclined to spend much less as a result of journey preferences, shorter stays and tighter budgets amid financial troubles at dwelling.
Whereas Hong Kong’s Tradition, Sports activities, and Tourism Bureau tasks the variety of vacationers to extend this yr, it estimated per capita expenditure by in a single day guests to drop to five,800 Hong Kong {dollars} ($742.64), down from final yr’s HK$6,939, according to figures released in the 2024 budget.
LKF, a well-liked vacation spot amongst vacationers, was notably exhausting hit when Hong Kong’s borders had been closed through the pandemic.
Whereas Zeman says lots of the neighborhood’s companies have recovered strongly, there are at present some unused areas — as soon as a uncommon prevalence throughout pre-pandemic instances.
Hong Kongers depart for bargains
Conversely, locals are more and more taking journeys to the neighboring mainland metropolis of Shenzhen, in line with economist Simon Lee Siu-Po, an honorary fellow on the Asia-Pacific Institute of Enterprise on the Chinese language College of Hong Kong.
“Each have turn into equal issues for Hong Kong,” he mentioned.
Whereas town’s borders had been closed through the pandemic, close by Shenzhen continued to develop right into a top-tier Chinese language metropolis, Lee mentioned. And newly constructed high-speed rails and a mega cross-sea bridge have made that journey extra handy than ever.
Shenzhen presents a variety of meals, leisure and purchasing choices that may now compete with Hong Kong, mentioned Lee, including that costs for items and companies within the metropolis are generally as much as two or 3 times cheaper.
This dynamic explains why hundreds of Hong Kongers flocked to the Shenzhen border for the Easter vacation in late March, leaving the monetary hub’s restaurants, bars and shopping centers empty, in line with native media.
For the whole month of March, town of seven.3 million folks noticed 9.3 million residents depart from its passenger site visitors management factors. Government data shows this was the single-highest month-to-month variety of departures since a minimum of 1997 when town was handed over from British rule to Chinese language sovereignty.
In the meantime, solely about 3.4 million visitors entered the city that very same month.
These developments have taken their toll on Hong Kong companies, with retail gross sales continuing to fall as native media studies on rapid rates of restaurant closures.
In accordance with a latest survey performed by the Hong Kong Small and Medium Enterprises Affiliation, 70% of native small and medium-sized companies within the metropolis reported a decline in enterprise efficiency in comparison with pre-pandemic ranges.
Along with campaigns like “Let’s Go The Further Mile,” Hong Kong authorities have additionally set aside HK$1.09 billion for citywide occasions like firework exhibits to spice up tourism and spending.
Whereas the funds will assist, combating excessive costs and competitors from Shenzhen would require far more drastic efforts, mentioned Lee and LKF’s Zeman.
