Hong Kong faces tourism bust

Hong Kong  |  Saturday, November 21, 2020  /  7:37 pm

Hundreds of parked tour buses are gathering dust at a northern Hong Kong container port, having been off the road for 10 months since authorities banned non-resident arrivals into the city due to the new coronavirus.

Freddy Yip, president of Hong Kong’s Travel Agent Owners Group, said that the area has become a “bus cemetery” He said that at the end of November, when the government ends a wide-ranging wage subsidy scheme that has benefited around 2 million workers in all types of industries, the former British colony, which was the world’s leading tourist city destination last year, faces a similar fate.

The program was launched in June and renewed in September, but an extension beyond the end of November was ruled out by the Hong Kong government, citing high costs, leaving several tourism-dependent companies on the verge of bankruptcy, unable to find other sources of revenue and unable to pay wages.

If they can’t see any light in front of them, they just stop and cut their losses,” said Yip, a 70-year-old who has been in business for almost 50 years.

A Hong Kong government spokesperson said it would “keep a close eye on the latest situation and respond in a timely manner,” but gave no further information.

Last year about 56 million people visited Hong Kong. The city was listed by the research company Euromonitor International as number one for arrivals globally in 2019. Tourists, most of them from mainland China, are attracted to its vibrant mix of cultures, spectacular views of the harbor and world-class shopping.

Approximately 5 percent of its gross domestic product, or about $18 billion, is generated directly from tourism by the Chinese-ruled, semi-autonomous global finance center, without counting money spent in local shops and restaurants. According to the government, Hong Kong’s tourism industry directly employs about 260,000 people.

Mainland Chinese tourists usually spend more on baby food, cosmetics and luxury products every day than the average resident, motivated by a belief that Hong Kong has higher quality standards than at home. At the beginning of February, when Hong Kong sealed its borders with mainland China, the source of expenditure was cut off with exemptions for a limited number of business travelers only.

Bubble trouble

According to government statistics, visitor arrivals have been down 96 percent to 99 percent year-on-year per month since February. A Singapore travel bubble is expected to start this week, allowing a small number of people to switch between cities after being screened for the virus, but it is not likely to avoid the decline, industry executives said.

The agreement allows passengers to leave the quarantine, but is initially limited to a single regular flight of only 200 passengers per journey. That is a drop in the ocean for Hong Kong, which, with 6.8 million visitors, including 5.5 million from mainland China, set its own record in January 2019.

Due to the limited number of passengers, strict regulations and high prices, tour guide Mimi Cheung, 46, said she was pessimistic about the travel bubble, about HK$2,000 ($260) for mandatory virus checks, plus around HK$6,000 ($774) to buy a tour in either city.

“The government should open the mainland border under safe conditions. It will bring some hope,” said Cheung, who has found temporary work as a night security guard to provide for her parents and two children.

Hong Kong leader Carrie Lam has said it remains a priority to reopen the border with the mainland, but Chinese officials have given no indication that they are able to do so until virus cases in Hong Kong fall to zero.

By providing free tours for small groups, the city government has been trying to stimulate local tourism, but operators say it has been of little benefit.

According to employees interviewed by Reuters, travel associations and local media reports, hundreds of travel agencies have ordered workers to take unpaid leave from December, claiming they can no longer afford to pay wages or rent.

Some visitors were discouraged by violent anti-government street demonstrations in the second half of last year, leaving many operators without cash buffers to weather this year’s crisis.

Stuart Bailey, chairman of the Hong Kong Exhibition & Convention Industry Association, said that the city’s meetings and conventions sector is also expected to see a 90 percent revenue decline this year, equivalent to around HK$50 billion ($6.45 billion).

The industry, which employs about 80,000 people, had to cancel the majority of events this year, he said.

“People are not optimistic we will be back to 2019 levels for at least 18 months to two years.”

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