Tourist cash tumbles $14b with little hope in sight
Tourist spending plummeted more than a third in the first six months of this year, cutting $14.2 billion from hotel, restaurant and shop takings.
The number of visitors dropped 21 per cent from January to June, compared with the same period last year.
Those who did come spent less than last year, according to figures released yesterday by the Hong Kong Tourist Association.
A visitor this year spent an average of $5,454, compared with $6,722 last year and $7,046 in 1996.
Total tourism receipts, including spending by transit passengers and aircrew, fell 35.6 per cent, from $39.8 billion to $25.6 billion. Spending by visitors alone fell 36.5 per cent to $24.6 billion.
As well as the drop in visitors, currency depreciation around Asia and lower prices in Hong Kong added to the fall in takings.
'It's a double-edged sword,' association spokesman Peter Randall said. 'Hong Kong has been making itself more competitive by lowering its prices; it's becoming exceptionally good value. But that does mean that the foreign exchange earnings go down.' He said spending in the second half of this year might be up on the same period last year, when the tourism downturn and financial crisis began to hit.
The whole of 1998 was still expected to be down, although there was hope for the beginning of next year.
Economists said that with continued hardship forecast for the Japanese economy and Southeast Asia remaining in deep financial strife for at least two to three years, Hong Kong could not hope for a quick improvement.
Head of Hong Kong research at Nomura International, Mark Simpson, said the immediate concern was whether economic growth slowed in the United States and Europe, as expected.
'If these markets begin to trend down - and with North Asia already deeply depressed - 1999 could be even worse,' he said.
People from the Americas spent the most per head at $5,779 this year, closely followed by Taiwanese at $5,773. The mainland accounted for 26.6 per cent of takings and was the largest single contributor.
Shopping remained the most popular expenditure area, taking nearly half of a tourist's money, followed by hotel bills and meals.
Greater China economist at Morgan Stanley Dean Witter, Andy Xie Guoshong, said the size of the first-half decline was inevitable because tourism last year was boosted by the handover.
The effect of the fall in tourism numbers on Hong Kong's overall economy was profound as it counted for about 10 per cent of gross domestic product.
Another economist said the main reason for the fall was the massive slowdown in demand from Southeast Asia.
Tourist arrivals on the mainland rose 13 per cent in the first six months, Xinhua said.
