Retail sales slumped during the Easter holiday because of fewer visitors from the mainland, with some luxury brands reporting falls of up to 30 per cent. The overall figures for last month are expected to show declines of between 5 and 8 per cent year on year, according to the Retail Management Association. Tourism leaders also branded the situation as the worst since the outbreak of severe acute respiratory syndrome in 2003, referring to the 14 per cent drop in mainland arrivals during Easter. The new rule that will limit visits by Shenzhen residents to only once a week is likely to deal a further blow.

The downturn has been evident for some time. Malls and public transport are no longer swarmed with shoppers wheeling suitcases. Shops catering to mainlanders are not as crowded as they used to be. Vacant shops with "for lease" signs can be found in many prime tourist spots. This has inevitably worried those whose livelihoods depend on the tourism dollar. The retail and tourism sectors employ more than 570,000 workers in total, accounting for about 9 per cent of the city's gross domestic product. But for those who feel the city has been overrun by mainland shoppers, this may be a welcome change.

Sales of luxury goods have already been dampened by Beijing's crackdown on corruption. The Easter slump, according to Chief Executive Leung Chun-ying, was mainly the result of the recent rowdy protests targeting cross-border parallel-goods traders. He is right in saying that the city's image as a tourist-friendly city has been tarnished. Recently, the weak currencies in the region have also given mainland tourists the incentive to travel further afield. In fact, many with high spending power have long skipped Hong Kong and Macau for other, more appealing destinations.