Retail in Asia

Featured

Overnight visitor spending softens in Hong Kong despite rising arrivals

Overnight visitor numbers rising steadily but their spending levels plummeting.

That’s the distinctly mixed message for retailers arising from two new Hong Kong Tourism Board (HKTB) reports related to tourism arrivals and spending habits.

SEE ALSO: Hong Kong’s upcoming Kai Tak Mall achieves nearly 70 percent occupancy rate

Spending by overnight visitors plunged by nearly -40 percent year-on-year in 2023 with a further decline expected in 2024, the Tourism Board said. This would mean a return to pre-pandemic levels this year.

The Hong Kong government is planning to hold fireworks shows every month in a bid to revitalise the tourism sector. Source: Hong Kong Tourism Board

Citing HKTB, the South China Morning Post reported last week that per capita spending by the group hit HKD9,700 (USD1,240) in Q1 2023 but steadily declined throughout the year to HKD7,400 (USD946) in Q2, HKD6,200 (USD792) in Q3 and HKD6,100 (USD780) in Q4, a -37 percent fall between the first and final quarters.

HKTB officials blamed a strong Hong Kong dollar, uncertain economic conditions and a change in tourists’ behaviour.

The Mainland China/Hong Kong border fully reopened in February 2023.

HKTB statistics showed that same-day visitor spending was essentially flat throughout 2023, peaking at HKD1,400 (USD179) in Q3. The full-year HKD1,300 (USD166) average was well short of the pre-pandemic 2019 HKD2,000 (USD255) level, the South China Morning Post observed.

Total Hong Kong retail sales in January 2024 edged up +0.9 percent year-on-year to HKD36.5 billion (USD4.7 billion). But the volume of sales was down -1.2 percent over the comparative period.

In a separate report, again citing data from the Hong Kong Tourism Board, the South China Morning Post reported that the city is to welcome 46 million visitors this year, roughly 70 percent of pre-pandemic levels. In 2023, Hong Kong recorded 33.9 million travellers but retail spending slowed, particularly by visitors from the Mainland.

SEE ALSO: Hong Kong retail sales growth slows in January as tourism numbers drop

Hong Kong’s tourism has seen a sluggish recovery despite the full restoration of flight capacity last year and the government launching a marketing blitz.

Visitors from across the border – who account for the majority – have also changed their spending patterns and no longer spend as much on luxury retail.