Visitors posing for a gaggle picture 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 larger 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 employees 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 knowledge confirmed 24 million total visitor arrivals within the first 4 months of the 12 months, nonetheless at solely 60% of the extent from the identical interval in 2019.
Although these numbers marked a major enhance from the earlier 12 months, specialists warn that full restoration faces better obstacles than grumpy Hong Kongers.
Robust greenback, excessive costs
“One of many greatest issues for town is solely that we’re costly,” mentioned Allan Zeman, chairman of Lan Kwai Fong Group, the most important 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 world monetary middle. Nonetheless, this could 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 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 current 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 because of journey preferences, shorter stays and tighter budgets amid financial troubles at dwelling.
Whereas Hong Kong’s Tradition, Sports activities, and Tourism Bureau initiatives the variety of vacationers to extend this 12 months, it estimated per capita expenditure by in a single day guests to drop to five,800 Hong Kong {dollars} ($742.64), down from final 12 months’s HK$6,939, according to figures released in the 2024 budget.
LKF, a well-liked vacation spot amongst vacationers, was significantly exhausting hit when Hong Kong’s borders have been closed throughout the pandemic.
Whereas Zeman says most of the neighborhood’s companies have recovered strongly, there are at the moment some unused areas — as soon as a uncommon prevalence throughout pre-pandemic occasions.
Hong Kongers go away for bargains
Conversely, locals are more and more taking journeys to the neighboring mainland metropolis of Shenzhen, in response to 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 develop into equal issues for Hong Kong,” he mentioned.
Whereas town’s borders have been closed throughout 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 provides a variety of meals, leisure and purchasing choices that may now compete with Hong Kong, mentioned Lee, including that costs for items and providers within the metropolis are generally as much as two or 3 times cheaper.
This dynamic explains why 1000’s 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 response to native media.
For your entire month of March, town of seven.3 million folks noticed 9.3 million residents depart from its passenger visitors management factors. Government data shows this was the single-highest month-to-month variety of departures since at the very least 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 traits have taken their toll on Hong Kong companies, with retail gross sales continuing to fall as native media stories on rapid rates of restaurant closures.
Based on a current 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 reveals 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.
