Half-full hotels and cheap rooms: Hong Kong tourism suffers worst month since SARS

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HONG KONG — Tourism figures fell in August, one of the clearest indications that months of anti-government protests are decimating part of the city’s economy.

Arrivals fell 40% last month compared to a year ago, said Financial Secretary Paul Chan, the worst drop since May 2003, when Hong Kong was battling the deadly SARS virus. In July, tourist arrivals had fallen by 5%.

Visitors and shoppers are caught up in the clashes, which have turned violent at times, move quickly between neighborhoods, and have closed metro stations for hours. Passers-by are exposed to tear gas and fire bombs.

Months of protests combined with the US-China trade dispute and slowing Chinese growth threaten to tip Hong Kong’s economy into recession, officials have warned.

Protests over the weekend signal that recent government measures, including the withdrawal of a bill that would have allowed the extradition of criminal suspects to mainland China for trial, have failed to quell the movement. city ​​protest. Hundreds of students formed human chains across Hong Kong ahead of the start of the school year on Monday, in solidarity with the protesters.

“The social events of the past few months, especially the continued violent activities, the blocking of the airport and roads, have severely damaged Hong Kong’s image as a safe city and as a commercial, air and financial hub,” said Mr. Chan in a blog. article published on Sunday. “It has hit the local economy as well, with the impact on the travel, retail and hospitality sectors most severe.” He added: “Most worrying is that the outlook is not likely to reverse in the near future.”

Tourism, retail and hotel bookings have suffered directly, he said, and several meetings and business trips have been postponed or moved to other locations. In some areas, hotel occupancy rates have fallen by more than half, while prices have fallen by as much as 70%, he said.

For example, Ecco, a Danish shoemaker and retailer, was previously scheduled to hold a company-wide training course in Hong Kong in November, a person familiar with the matter said. The company has since moved the course to Thailand, the person said. A spokesperson for the company did not immediately respond to a request for comment.

The tourism industry is a mainstay of Hong Kong’s economy, contributing around 5% of gross domestic product in 2016 and employing more than 250,000 people.

Despite the Hong Kong government’s withdrawal of a controversial extradition bill, tens of thousands of people marched to demand US support as clashes erupted between protesters and police. Photo: Associated Press / Vincent Yu

The Hong Kong Airport Authority published a newspaper ad on Friday urging protesters to “spare our passengers further disruption.”

Protesters had stormed the airport the previous weekend, crippling traffic around the aviation hub and forcing dozens of travelers to walk to the terminals. “We again strongly urge protesters not to disrupt the journeys of tens of thousands of travelers who use our airport every day,” the half-page advertisement reads.

Hong Kong’s flagship carrier, Cathay Pacific Airways Ltd.

, said in August that it was preparing for a significant impact on revenues as traffic entering the city had weakened significantly.

Mike Johnson, a 30-year-old New York-based consultant, had planned to travel to Hong Kong in August with his girlfriend. But reports of violent clashes between police and demonstrators made him cancel their trip.

“We decided it was too big of a risk,” he said. “We wanted a peaceful getaway, not tear gas and water cannons. “

Students formed human chains across Hong Kong on Monday.


Photo:

Anthony Wallace / Agence France-Presse / Getty Images

Mr Johnson attended college in Hong Kong and said he was eager to show his girlfriend the city that shaped him.

“I keep telling him, ‘This is not the Hong Kong I remember.’ The images I see today make me sad.

The protests impacted the economy in a number of ways. Retail sales and consumer spending fell. Long queues in front of restaurants frequented by tourists have recently disappeared.

House prices have fallen and the stock market has fallen. Fitch Ratings lowered Hong Kong’s credit rating on Friday, saying the unrest had strained the city’s relationship with mainland China and damaged its reputation.

A survey of private companies released last week by IHS Markit showed shopping activity in Hong Kong has fallen to the lowest level in the series’ 21-year history.

Events have also suffered. A spokesperson for the Hong Kong Watch and Clock Fair, an annual industry gathering that bills itself as the world’s largest watch fair, said there were 18,000 attendees at the week’s show. last, a seven-year low and about 15% lower than a year ago. .

William Shum, founder and chief executive of Memorigin, a nine-year-old local luxury watch brand, said its sales in Hong Kong fell about 50% during the protests. He attributed the decline to the decline in tourists, especially those from mainland China who typically make up a large percentage of sales of his high-end watches.

Mr Shum said it was the worst sales slowdown in Hong Kong he had ever seen. The decline prompted him to consider other opportunities overseas, including in Japan, where he recently saw demand pick up.

“Hong Kong has long played an important role in international trade, but with the protests, foreign customers have stopped coming,” Mr. Shum said.

Write to Steven Russolillo at [email protected] and Preetika Rana at [email protected]

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