Hong Kong must ditch its damaging Covid-19 hotel quarantine policy to restore the economy

With vaccination levels now among the world’s highest, Hong Kong is in a position to reconnect with the world, stem the economic pain and talent exodus, and start restoring its position as Asia’s financial hub and major tourist destination

Weijian Shan

Published: 8:45am, 12 Jul 2022

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Hong Kong is losing out to other Asian cities, particularly Singapore, as a financial hub and a tourist destination, all because of its hotel quarantine policy.

Services, including financial services and everything related to tourism such as airlines, hotels, restaurants, shops and entertainment, represent more than 90 per cent of Hong Kong’s economy. All are at risk.

For the last three years of 2019-2021, Hong Kong’s net outflow of people numbered 59,100. But in the first three months of this year alone, the number has reached 140,000.

The leading cause of the increase, according to media reports, is the quarantine policy. “If the situation looks like 2023 is going to be more of the same in Hong Kong – hotel quarantine restrictions, all that sort of stuff – we’re moving to Singapore,” one expatriate told CNBC. “It gets to a point where it’s just too much.”

How has the outflow turned from a trickle to a torrent this year, even though the government has cut the quarantine from three weeks to two in February and, further, to one week in April?

There are two reasons. The first is that most countries have lifted the Covid-19 restrictions that brought global travel to a standstill, and people can leave Hong Kong freely.

04:28

Hong Kong's travel restrictions are increasingly difficult to justify

The second, more importantly, is that thanks to the quarantine policy – which requires travellers to pay for a week’s stay in one of the city’s handful of designated quarantine hotels – getting back into Hong Kong takes too long and costs too much. For those whose jobs require frequent travel, they have no choice but to avoid returning to the city.

The new government is sending out signals that it may further shorten the hotel quarantine. The real bottleneck, however, isn’t the time spent in a hotel room but in being able to book one at all. Rooms must be reserved months in advance and at exorbitant rates – quarantine hotel prices have surged by as much as 80 per cent.

A high-end suite can easily cost HK$280,000 (US$35,680) per week. And these rooms must often be fully paid in advance with strict cancellation and refund policies. Many travellers have found their hotel payments forfeited because of changed travel plans.

I am travelling outside Hong Kong for the first time in more than two years. When I tried to book a hotel room last month to come home, the earliest availability was in August. Unfortunately, my work requires me to travel in August (to Singapore). And work will continue to take me frequently to other countries before the end of the year. I am stuck abroad, as returning to Hong Kong for now is not an option.

End the Covid-19 hysteria, reopen Hong Kong and give us back our lives

This might all make sense if Hong Kong’s policy kept the city safer from the virus than in other places. But the data simply does not support it.

Compare Hong Kong to Singapore, which began lifting travel restrictions as early as last September and allowed quarantine-free entry for fully vaccinated visitors in March. That month, when cases in both places peaked with the outbreak, Hong Kong’s death rate was more than 20 times higher than Singapore’s.

That surge can be blamed on Hong Kong’s low rate of Covid-19 vaccinations. At the beginning of the year, only about 61 per cent of the population was fully vaccinated, among the lowest in rich societies. More problematic was the even lower vaccination rate among the elderly: 49 per cent for those aged 60 and above.

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Carrie Lam admits ‘not enough’ done to vaccinate elderly Hongkongers from Covid-19

In care homes for the elderly, where the death rate was highest, the rate was only 15 per cent. It is therefore not surprising that, for the first three months of the year, 96 per cent of Covid-19-related deaths in Hong Kong occurred among those aged 60 and older. Within this age group, the unvaccinated were 20 times more likely to die than the fully vaccinated.

Why were Hong Kong’s vaccination rates so low? Ironically, it was because Hong Kong’s policies were so successful at keeping the virus at bay for two years. Many thought the jabs were unnecessary – even risky, particularly for the elderly. As Bernard Chan, former convenor of the Executive Council, put it, Hong Kong became a victim of its success.

Success in a closed environment is never sustainable. The virus may be with us for a very long time, if not forever – variants of the 1918 Spanish flu are still with us today. The only protection is for everyone to be fully vaccinated.

Since cases started to surge in February, Hong Kong’s vaccination rate has shot up. Nearly 90 per cent of the population has received at least two doses of vaccine, among the highest in rich societies. More importantly, for those aged 60 and above, this vaccination rate has risen to about 80 per cent. Our elderly are now much better protected.

It is therefore high time for Hong Kong to lift hotel quarantine requirements altogether. Timid steps such as reducing the number of days will not help much. It would only prolong the pain and hasten the loss of talent. Only by fully opening up can Hong Kong hope to restore and maintain its position as Asia’s financial hub and major tourist destination.

Weijian Shan is executive chairman of PAG, a Hong-Kong-based investment firm and author of “Out of the Gobi,” “Money Games” and “Money Machine” (forthcoming)