Hong Kong protests: economy lost an estimated HK$2.8 billion over ‘golden week’, experts say
- Sectors such as retail, dining and hotels may have lost as much as HK$1.9 billion over three-day holiday weekend compared to last year
- Expert also estimates MTR Corp lost around HK$500 million over the weekend, citing vandalism and loss of ticket revenue
Hong Kong’s economy lost at least HK$2.8 billion (US$356 million) over the past six days, according to local analysts and business leaders, with visitor numbers in free-fall and the city’s rail network crippled by rampaging anti-government protesters.
Experts who spoke to the Post on Monday said the damage to certain business sectors – such as retail, dining, transport and hotels – could exceed HK$1.9 billion over the three-day holiday weekend.
Each source also predicted that Hong Kong’s economy would only get worse as the protest crisis grinds on.
Financial Secretary Paul Chan Mo-po on Sunday swiftly quashed the rumours, saying the government had no plan to impose foreign exchange controls and was committed to keeping a free flow of capital in the city.
In August, Chan unveiled a basket of economic measures worth more than HK$19 billion for small and medium enterprises to mitigate the effects of the economic headwinds.
Extensive vandalism at MTR stations on Saturday caused the city’s rail system to completely shut down for the first time in its 40-year history. Most malls, supermarkets and even convenience stores were also closed for the day.
On Monday, the rail giant shut down 54 of its 94 stations and closed all services at 6pm – except the Airport Express. Many shops and malls, including MegaBox in Kowloon Bay, closed early on Monday despite it being the annual Chung Yeung Festival.
The number of visitor arrivals on Sunday, which reached about 83,000, fell by 62 per cent compared to the same day last year.
The decline in visitor numbers is more than our original forecast of about 40 per cent. We did not expect the situation to be so bad.
Yiu said Hong Kong’s hotel occupancy rate had fallen to about 50 per cent from over 95 per cent during the same period last year.
“The decline in visitor numbers is more than our original forecast of about 40 per cent. We did not expect the situation to be so bad, and many hotels have already cut prices to attract visitors,” he said.
“The market outlook is dim because there’s still no sign of the protests easing. So far, nobody can tell us when this social unrest will die down, not even the government.”
“The impact of the protests on the economy is only short-term,” he said. “After all, I think not all the troublemakers are real protesters. Some are disguised as protesters.”
He continued: “But invoking the emergency law will have a long-term damaging impact on Hong Kong’s economy. It will cause a crisis of confidence among people, including investors, as many doubt its lawfulness and justification.”
The confidence crisis would lead to an exodus of capital, which would lead to a currency crisis in Hong Kong and seriously cripple China’s economy.
“People may think there will be more occasions of applying this law,” he said. “It gives the impression that the excellence of Hong Kong’s system has been eroded by bad governance.”
Kwan said the worst scenario could be a collapse of the city’s economy.
“The confidence crisis would lead to an exodus of capital, which would lead to a currency crisis in Hong Kong and seriously cripple China’s economy,” he said.
Francis Lun Sheung-nim, chief executive of the brokerage Geo Securities, estimated the MTR Corp suffered a loss of HK$500 million over the weekend, factoring in HK$300 million from the damaged facilities and HK$200 million from loss of revenue.
“The MTR station facilities have been repeatedly damaged and the repairs cannot keep pace with the destruction,” he said.
“I think, in the end, the MTR may suffer a deficit this year.”
