US-China trade war hits Hong Kong tourism as weaker yuan slows number of visitors from across the border
Visitors from short-haul destinations falls 6.2 per cent in July compared to last year
Hong Kong felt the effect of a worsening US-China trade war and volatile currency exchanges as tourist arrival growth slowed to its lowest pace in six months.
On Friday, the Hong Kong Tourism Board revealed the number of visitors in July rose 5.7 per cent compared to a year earlier, to about 5.46 million.
But the board said the escalating trade war as well as the fluctuation in multiple currency exchange rates resulted in a dwindling number of tourists arriving from short-haul destinations, with a fall of 6.2 per cent compared to the same month last year.
A board spokesman said the strong showing of the US dollar against other currencies would affect tourism to a certain extent. The Hong Kong dollar is pegged to the US dollar.
“If tourists had to spend more money in Hong Kong, then they might delay their trips to the city or even choose not to come,” he added.
Lawmaker Yiu Si-wing, representing the tourism sector, said rising hotel prices in Hong Kong had made tourists from Southeast Asia, who may not have high incomes, become reluctant to visit the city.
He said local hotel prices had increased over the past six months or so thanks to the influx of mainland tourists, who could afford to pay more.
But in July, the city saw its first single-digit growth, about 8 per cent, in the number of mainland visitors in six months. It was a sharp slowdown from the 17.3 per cent growth in June.
The city also recorded its first decline in the number of overnight tourists coming from across the border over the same period of time.
Yiu said the change could be caused by the yuan’s depreciation against the Hong Kong dollar.
However, he said mainland tourists might also be waiting until the opening of the Guangzhou-Shenzhen-Hong Kong Express Rail Link. The HK$84.4 billion (US$11 billion) project is set to open on September 23.
Jason Wong Chun-tat, chairman of the Travel Industry Council, said currency fluctuations, including a weaker yuan, would affect tourists’ consumer sentiment.
According to the board, mainland tourists accounted for about four in every five arrivals in the city last month.
Wong believed the impact of the trade war could drag on until mid-2019, but added it was hard to forecast.
Looking ahead, the board said it would step up promotion in multiple short-haul markets, and cooperate with air companies, as well as the tourism industry, in putting forward discounted travel products in the second half of this year.
For the first seven months, tourist arrivals rose 9.4 per cent to about 36 million people.