Visitors flock to Hong Kong over mainland China’s ‘golden week’ holiday, but retailers say extra people did not mean higher sales
- About a million visitors hit city from September 29 to October 4, but tourists offset by 1.4 million Hongkongers who left on holiday over the period
- Real estate services firm says its survey of retailers showed footfall had increased, but sales had not reflected increased traffic
Hong Kong retailers are uneasy over business prospects for the next big holiday periods after the city had a net outflow of people over the Mid-Autumn Festival and National Day long weekend and those in the city did not spend in stores, despite higher footfall.
Immigration Department statistics showed 1 million visitors visited Hong Kong from September 29 to Wednesday in the first post-pandemic celebration of the National Day “golden week” holiday, which ends on Friday.
But the number of tourists was offset by the 1.4 million Hongkongers who left the city on holiday over the same period.
Real estate services firm JLL said it had carried out a survey of 10 retailers, whose names were withheld, but which included the jewellery, luxury, food and drink, toys, souvenirs and cosmetics sectors.
A spokeswoman for Sun Hung Kai Properties said performance at 15 of its major shopping centres, including APM in Kwun Tong, Tai Po Mega Mall, Yuen Long Plaza and Sheung Shui’s Metropolis Plaza was “booming”.
She added “foot traffic and business” had recorded a year-on-year increase of 20 per cent from September 29 to October 2, but did not give a breakdown of contributing factors to the increase.
JLL said, although turnover in general was in line with an average weekend, the Tsim Sha Tsui area had performed better than others in sales terms.
“Retailers are losing confidence in the business prospects for Lunar New Year in 2024, following disappointing retail sales during the golden week,” said Oliver Tong, JLL Hong Kong’s head of retail.
“JLL expects retailers to slow down their expansion plans in the fourth quarter of 2023, and the upwards trend in retail rents is losing momentum.”
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He added any boost from the government’s “Night Vibes Hong Kong” campaign for retail sales and the economy were “yet to be seen”.
Tong suggested the campaign had led to “a diversion of shoppers from shopping malls and districts to the night market” and could cut sales more.
He added an estimated 100,000 people had taken part and that he was optimistic about the contribution the campaign would make to the economy.
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“There is no hope for a quick rebound by Lunar New Year,” said Gary Ng Cheuk-yan, senior economist at Natixis.
“There is clearly a change in consumer spending patterns, which means the inflation-adjusted tourism spending may not return to the pandemic level any time soon.”
He added that Hongkongers were going abroad in droves, but the number of visitors to the city had still not got back to normal levels.
Ng blamed the slow tourism recovery on a hit to Hong Kong’s competitiveness because of strict government policies over the Covid-19 crisis, which froze development and meant the city was “not ready for the new normal”.
“Even though Hong Kong retail sales will still rebound by 16 per cent in 2023, it is only a base effect and the structural challenges remain more important than ever,” he said.
