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Chinese tourists

Hong Kong tourism shows signs of recovery as decline slows, commerce minister says

Greg So was speaking at the opening of the International Wine and Spirits Fair as participants sought new ways to boost business

PUBLISHED : Friday, 11 November, 2016, 9:01am
UPDATED : Friday, 11 November, 2016, 9:00am

Hong Kong tourism is showing signs of recovery amid a more buoyant National Day holiday, with the decline in visitor numbers narrowing to 2.4 per cent in October from 3 per cent a month earlier, according to commerce minister Greg So Kam-leung.

The number of mainland Chinese tourists, who represent three-quarters of all visitors to the city, dropped 3.6 per cent in October on a yearly basis, smaller than the 5 per cent fall in September.

Overseas visitors, however, continued to grow in October, with the number up 1.4 per cent.

Deterrent: Entrance fee for Hong Kong wine expo rises in possible move to keep ‘drink tourists’ away

Industry insiders said they expected the recovery to continue for the rest of the year, with growth resuming early next year.

“We will continue to boost the retail and tourism sectors by increasing the competitiveness and attractiveness of the city,” So said on Thursday at the opening of the three-day International Wine and Spirits Fair.

Tourist sector lawmaker Yiu Si-wing said a decline in full-year visitor numbers was almost certain, given the 6.1 per cent decline in the first nine months, but he thought a contraction of less than 5 per cent was “highly likely”.

Travel Industry Council executive director Joseph Tung Yao-chung said the troubled industry had almost reached the bottom after a year-long decline, while the uptick in overseas visitor numbers was encouraging and proof that Hong Kong was a place that appealed to travellers from around the world.

Hong Kong’s “golden era” was ushered in with the introduction of the individual visit scheme for mainland Chinese tourists in 2003, triggered a huge influx of shoppers. But the trend abruptly reversed last year, with tourist numbers falling 2.5 per cent – the first decline since 2004 – and retail sales sliding 3.7 per cent.

The persistent downturn has hurt local distributors of premium baijiu, a Chinese distilled alcoholic beverage popular with mainlanders.

Queenie Lau is among 1,060 exhibitors at this year’s wine and spirits fair who are seeking to explore new business opportunities,

The associate director of business development at Everrise International Trading, a general agent for several top Chinese baijiu brands in Hong Kong, said sales had declined more than 10 per cent over the past year. This is on top of falls triggered by Chinese President Xi Jinping’s anti-corruption campaign launched in 2012.

Spirits more prominent at trade fair

Dwindling mainland Chinese visitor numbers and the sluggish economic environment have further dampened sales of premium baijiu, as half of the firm’s revenue came from mainland travellers. About 70 per cent of the liquor was sold through the city’s duty-free stores, Lau said.

To rein in the sales slump, Lau said they had displayed cheaper Chinese liquors in stores. These, she said, had sold well.

However, there is an upside to all this – wine and spirits lovers are able to enjoy high-quality products at much cheaper prices, according to Ben Lam, chief sommelier at Rastignac (HK) Limited, a local import agent for fine acoholic products.

“It is the best time to drink high-quality wine,” Lam said. For example, he said the price of a bottle of 1982 Lafite, a top French wine, had dropped two thirds in the past eight to 10 years.

Despite weak local retail sales, the wine keeps flowing in Hong Kong. In the first nine months, wine imports reached HK$9.1 billion, up 22 per cent on the same period last year, while wine exports jumped 25 per cent to HK$4.1 billion over the same period.