Visitors and tour guides the casualties in industry price war

It seemed to be a perfect match. People from the mainland are the world's keenest overseas shoppers and Hong Kong is the jewel in Asia's retail crown.

Last year, mainland tourists made 13.6 million trips to Hong Kong, representing nearly 40 per cent of their outward travel. Their spending in Hong Kong was about HK$60 billion, half of the city's tourism revenue, according to the Hong Kong Tourism Board.

But an April CCTV report on mainland tourists duped in Hong Kong shopping scams exposed an unsavoury side of the relationship.

The report showed mainland tourists paying top prices in Hong Kong shops for diamond jewellery and watches that were fake. Some also complained of being pressured into buying by tour operators.

The story was picked up by the mainland and local media and prompted the Hong Kong government to crack down on suspect shops and extend the guaranteed-refund period for tourists to six months from 14 days. Despite authorities' eagerness to restore the city's image, mainland tourism experts are pessimistic that the measures will be effective as long as irregularities in the mainland tourism sector remain.

Price wars among mainland travel agents mean Hong Kong-based tour operators have to lower their charges to attract package tours, forcing guides to rely more and more on commissions from shop sales and scams.