San Francisco Frontiers - Hong Kong faces uphill battle to lure back Chinese tourists

Mainland Chinese visitors have historically been the lifeblood of Hong Kong's retail and services sectors, spending on everything from basic goods like baby formula to luxury handbags and upscale restaurants -- helping to shape the city's economy in the process.

But after three years of Covid isolation, and before that a year of sometimes violent pro-democracy protests -- not to mention the growing appeal of fast-developing mainland cities -- Hong Kong has lost its shine for many Chinese tourists and is a long way from regaining its go-to status, observers say.

Local authorities had hoped one million people would cross the border on May 1, the start of the traditional "Golden Week" boom time for Hong Kong's tourism and retail sectors, but the crowds at Lo Wu were moderate on Wednesday.

"Hong Kong is much more expensive than before," said a technician surnamed Leung, 54, who was planning to visit local theme parks with his young children.

"In terms of value for money, Hong Kong is not that competitive."

Though Leung said he was staying for three days, many visitors passing through Lo Wu said they were making more affordable day trips instead.

Hong Kong is desperate to revive its tourism sector -- which at one time made up around five percent of GDP -- to offset the economic toll from the pandemic and political unrest in recent years.

But industry insiders say Hong Kong is still catching up, with visitors spending less during China's economic downturn and local residents preferring to vacation in neighbouring Chinese cities.

"After the pandemic, people's travelling mode and interests have changed, but we are lagging behind in terms of discovering and packaging unique local attractions," the city's tourism sector lawmaker Perry Yiu told AFP.

- 'Not attractive' -

Emerging from a nearly three-year tourism drought, Hong Kong in 2023 saw 34 million visitors -- a figure buoyed by China's decision to reopen its borders after Covid.

But that number was still far short of the pre-pandemic, pre-protest peak seen in 2018, when Hong Kong received more than 65 million visitors who collectively spent around $35 billion.

Worse still, official figures showed a 73.5 percent drop in spending among daytrippers from mainland China, the largest demographic of visitors to Hong Kong.

Xu Dengkai, an IT professional from Shanghai, paid his first visit to Hong Kong on Wednesday, but would not stay for another day.

"It's not particularly attractive to me, as it looks just like Shanghai," Xu told AFP.

A young mother surnamed Jiang, who was concluding a five-day trip in Hong Kong with husband and toddler in tow, said she hadn't set aside any money for shopping.

"I would probably save my shopping spree for Japan," Jiang said with a laugh, adding that goods in Hong Kong cost double or triple what they would in Chongqing, their hometown.

Jason Wong, former chair of Hong Kong's Travel Industry Council, said the city "has a lot to do" to find unique offerings to attract visitors.

"Visitors now want more in-depth experiences, as they can shop either in mainland or online instead of relying on Hong Kong," he told AFP.

The city's US dollar-pegged currency and overall high prices, as well as competition from regional rivals such as Singapore and Japan, have also affected tourist sentiment, Wong said.

- 'Hong Kong's good side' -

Even among locals, Hong Kong's appeal is dimming.

Since China reopened its border in February 2023, Hong Kongers have flocked to neighbouring mainland cities such as Shenzhen and Zhuhai for weekend outings.

On a recent day in late March, daily departures exceeded 760,000 -- nearly three times the number of arrivals.

Funeral services worker Ryan, 35, has been paying weekly northbound visits to the mainland for "more fun with the same amount of money", and said he was far from alone.

Cordelia Leung, a marketing professional, said she "sympathised" with Hong Kong businesses, but spending two days across the border once or twice a month was a "more favourable treat".

She named a slew of attractions -- better tennis courts, quality meals, more affordable hotels, and a massage parlour where she could watch a movie while having her feet rubbed.

"In Hong Kong, even when I am willing to pay for an expensive meal, I may not get good service," Leung said.

Dwindling consumption has led to a months-long wave of shops and restaurants closing.

A Facebook group compiling news of local business closures saw its membership surge to more than 350,000 within weeks.

The last 10 days of April saw the shuttering of two cinemas, including one with 58 years of history.

Asked about the shutdowns, Hong Kong leader John Lee on Tuesday brushed aside the suggestion of economic woes and called them "changes that would inevitably take place in our economic transformation".

"Together we should promote the good side of Hong Kong to everyone," Lee said.

V.Mitchell--SFF