Hong Kong’s shopping malls expect a warm Christmas with returning tourists and stronger local demand
Pacific Place overhaul among big push from city’s operators to capitalise on recent retail sector growth, after two years of decline
From adding restaurants, bars and a yoga centre to hosting arts and crafts events, one of Hong Kong Island’s most luxurious shopping malls has gone all out to attract shoppers and grab a share of the recent growth in the city’s retail sector in the run-up to Christmas.
Pacific Place’s overhaul started in summer last year when two established restaurants – Grappa’s and Dan Ryan’s – were booted out of the Admiralty mall. The site widened its food and drinks space by 50 per cent to account for a fifth of the whole mall, according to Fiona Shiu, its general manager.
And the efforts appeared to have borne fruit, with sales at the mall up by more than 10 per cent year on year in the third quarter of 2017, and 5.4 per cent in the first nine months of 2017.
“Two years ago, the number of inbound tourists declined and more Hongkongers travelled elsewhere, Shiu said, noting that an uptick in tourist numbers since then had helped the mall’s cause.
“Most importantly, we saw that clients [now have] higher demand for leisure, and more people chose to dine out.”
Pacific Place’s performance is in line with a gradual improvement in Hong Kong’s retail sector so far this year, with sales value jumping 1.2 per cent year on year for the first 10 months following two consecutive years of decline to 2016.
“Retailers are seeing the trend of local consumption picking up, in conjunction with rising mainland tourist consumption in the past couple of months,” Mavis Hui, a China and Hong Kong consumer sector analyst at DBS Vickers, said.
Yiu Si-wing, a legislator for the tourism sector, said more mainland visitors had been coming to Hong Kong in the past few months as anti-mainland sentiment died down.
“There was barely any negative news from Hong Kong over the past year, unlike previous years with events such as anti-parallel trader protests,” he said, referring to the local anger over people who bought items in Hong Kong to carry over the border and sell at a premium on the mainland.
The number of mainland tourists, who accounted for about 75 per cent of the city’s visitors, was up 8.3 per cent year on year in October. The growth helped spur a 6.6 per cent increase in the city’s total visitor numbers.
Recovering local demand and returning tourists are likely to keep the momentum continuing through Christmas, according to shopping mall operators and analysts. Retail sales are likely to see a 5 per cent rise from last year, according to Thomson Cheng Wai-hung, chairman of the Hong Kong Retail Management Association.
To maintain the momentum, Pacific Place is staging more than 60 art performances and hosting a range of handicraft workshops, Shiu said. And the shopping mall has recently brought in more lifestyle offerings, such as a 10,000 sq ft Pure Yoga centre, she added.
Sun Hung Kai Properties, a main rival of Pacific Place’s owner Swire, stole a march by unveiling Christmas promotions in late October, one week earlier than previous years, according to Maureen Fung Sau-yim, executive director of Sun Hung Kai Properties (China), a wholly owned subsidiary of the company.
Fung said she expected retail sales at Sun Hung Kai’s 12 Hong Kong malls, from Yuen Long to Central, to grow by 10 to 12 per cent during Christmas, with malls in such tourist districts as Mong Kok, Tsim Sha Tsui and Causeway Bay up by 15 to 18 per cent.
As Christmas shopping season looms, Harbour City, Hong Kong’s largest shopping mall, recently also stepped up its food and drink choices by adding seven alfresco restaurants at a new wing.