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Tourists visits the Avenue of Stars in Tsim Sha Tsui. Photo: Sam Tsang

US-China trade war and stronger US dollar will cause Hong Kong’s tourism industry to slow in 2019

  • While total visitors to the city is expected to top last year’s record, officials say mainland China’s slowing economy will influence spending
  • About 66.4 million visitors expected to come to Hong Kong in 2019

The US-China trade war and a stronger US dollar will cause the growth in Hong Kong’s tourist arrivals to slow down abruptly this year, the city’s tourist board has said.

About 66.4 million visitors are expected in Hong Kong in 2019, topping last year’s record high of 65.1 million. But the 1.9 per cent increase would mean a significant slowdown from the 11.4 per cent rise between 2017 and 2018.

“Tourism is very much affected by the larger environment,” Anthony Lau Chun-hon, the Hong Kong Tourism Board’s executive director, said. He added that a slowing Chinese economy was also a factor.

The board said a stronger US dollar – to which Hong Kong’s currency is pegged – had made the city a more expensive destination than other countries.

While overnight visitors are expected to rise 2.1 per cent, per-capita spending is predicted to fall 6.2 per cent to HK$6,195 in 2019, following a 2.5 per cent increase last year.

Financial Secretary Paul Chan has said the city’s economic growth was expected to slow to a two-year low in 2018. Photo: Winson Wong

Lau said the opening of Hong Kong-Zhuhai-Macau Bridge and express rail link across the border late last year had boosted mainland tourist arrivals, but the effects might begin to weaken this year. That was also a factor dragging the growth in overall visitors.

“There is always a limitation to anything,” he said. “We had a very good last quarter basically driven by the novelty of the bridge and also the high-speed rail system ... It will probably start to slow down after the first quarter.”

Mainland Chinese visitors accounted for nearly 80 per cent, or 51 million, of the city’s total tourism arrivals in 2018.

The board’s conservative estimate came a day after Financial Secretary Paul Chan Mo-po predicted a 3 per cent growth rate for the city in 2018 – the slowest pace of expansion in two years.

But industry experts were more optimistic, saying the board had underestimated the overall tourist figures.

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Polytechnic University’s School of Hotel and Tourism Management forecast that 66.9 million visitors, or about 3 per cent more year on year, would come to Hong Kong in 2019.

“They obviously have reasons for being conservative, we are only in February at the moment, but I think the figures for 2019 are already looking good,” said Brian King, the university’s associate dean.

Tourism sector lawmaker Yiu Si-wing echoed those comments, predicting the overall tourist figure would grow 5 per cent.

He said the city would still see an increase of 5 to 8 per cent in the number of arrivals for the first nine months of this year, while the momentum would only start to ease in the fourth quarter.

Looking ahead, the board said it would focus on attracting overnight visitors, investing about HK$130 million, or 77 per cent of its promotion budget, on countries other than the mainland, whose visitors are more likely to stay for longer than a day.

Of the 23 per cent of its resources it spends on attracting visitors from the mainland, 90 per cent is aimed at people outside the nearby Guangdong province.

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The authority plans to push green tourism, marketing five hidden gems such as the supervolcano in Hong Kong’s Unesco Global Geopark, the beaches of Southern district, and the possibility of spectacular sunsets in Ha Pak Nai and Lau Fau Shan.

Lau believes these sites will appeal to non-mainland visitors, who come on an individual basis and love greenery so would not damage the environment.

“It is not about the number of tourists going to a certain place, but it’s a number of them going to a certain place at the same time,” he said. “If we can spread them out, we surely have the capacity.”

The authority is also looking into three to four districts to turn into neighbourhoods for tourism.

But Lau said the board would talk to residents and the district councils first, to reduce the impact on people’s daily lives.

“If they do not welcome it, then we will find another district,” he said.

Currently, Central and Sham Shui Po are part of the scheme.

Image of mainland Chinese tourists in Tung Chung. Photo: Winson Wong

While the tourism sector championed the high figures, Hong Kong’s long-running influx of mainland tourists has been a cause of disruption for residents of areas such as Tung Chung, To Kwa Wan and Kowloon City. Their frustration prompted concern groups to call on the government to cap the number of mainlanders allowed to visit the city.

Activist Roy Tam Hoi-pong, a member of the NeoDemocrats party, voiced concerns that promotion of green areas and other local districts would another cause another headache for residents.

“Unless the tourism board is very confident that the promotion information of the green areas would not reach mainlanders, this could be a problem” he said.

“Individual travellers from the mainland have already packed the urban areas. When Hongkongers go to the countryside and yearn for some fresh air, will they still have to compete with mainlanders?”

This article appeared in the South China Morning Post print edition as: Slowdown in tourist numbers predicted
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