Hong Kong, known for its luxury shopping, fine dining, and vibrant nightlife, is facing a significant challenge in attracting tourists back to the city. Despite efforts to encourage service workers to be more courteous and welcoming, visitor numbers have not returned to pre-pandemic levels. With disruptions from social unrest and the impact of the Covid-19 pandemic, the tourism industry in Hong Kong is struggling to recover.
While the government’s campaign, “Let’s Go the Extra Mile,” aims to promote Hong Kong’s reputation as a top tourism destination, experts believe that the city’s high prices and competition from neighboring cities such as Shenzhen pose greater obstacles. Allan Zeman, chairman of the Lan Kwai Fong Group, points out that Hong Kong’s expensive reputation deters potential visitors, especially when compared to the affordability of destinations like Shenzhen and Japan. The pegging of Hong Kong’s currency to the U.S. dollar further contributes to the city’s costly image, deterring budget-conscious travelers.
Mainland Chinese travelers are becoming a more dominant demographic in Hong Kong, as other nationalities are slower to return post-pandemic. However, mainland tourists tend to spend less due to shorter stays and tighter budgets, impacting local businesses that depend on tourism. The Hong Kong government’s projection of increased tourist numbers is offset by a decline in per capita expenditure, reflecting a shift towards more budget-conscious travelers.
The rise of Shenzhen as a top-tier Chinese city presents a direct competition to Hong Kong’s tourism industry. With convenient transportation links and a wide range of affordable food, entertainment, and shopping options, Shenzhen is attracting a significant number of Hong Kong residents, particularly during holidays. The affordability and diversity of offerings in Shenzhen make it an appealing alternative to Hong Kong, leading to a decline in local business revenue.
The exodus of Hong Kong residents to Shenzhen during holidays has taken a toll on the city’s restaurants, bars, and shopping centers. The increased departure of locals has resulted in a decline in retail sales and business performance for many small and medium-sized enterprises in Hong Kong. Rapid rates of restaurant closures and reduced consumer spending are indicative of the challenges faced by local businesses in the current economic climate.
In response to the downturn in the tourism industry, the Hong Kong government has allocated funds for citywide events and campaigns to boost tourism and spending. Initiatives like “Let’s Go The Extra Mile” and investments in fireworks shows are aimed at revitalizing the city’s tourism sector and attracting more visitors. However, overcoming the challenges posed by price competitiveness and the rise of neighboring cities like Shenzhen will require a comprehensive strategy to position Hong Kong as a desirable destination for tourists.
Hong Kong’s tourism industry is facing significant challenges in the wake of the Covid-19 pandemic and increased competition from cities like Shenzhen. While efforts to enhance hospitality and promote the city as a tourism hub are commendable, addressing underlying issues such as high prices and shifting tourist demographics will be crucial in revitalizing the sector. Collaborative efforts between government, businesses, and stakeholders are essential in positioning Hong Kong as a competitive and attractive destination in the ever-evolving tourism landscape.