“I am very happy to see many industries, which include tourism, food and beverages, and retail operators, clearly understand and bravely embrace these changes.

“They have changed their operational and service focus, or even added new ways of attracting people.”

Hong Kong’s retail and catering sectors experienced a lacklustre Easter holiday as the city recorded an outflow of 1.7 million people. Only about 400,000 tourists came over from mainland China and abroad during the four-day break.

Lee on Tuesday argued that this was the result of shifting economic trends, noting changes in how various industries operated and consumption patterns, such as whether residents opted to travel during holidays or how they spent their money.

He pointed to businesses that had adapted and found new ways to attract customers, referring to a special Korean tour that offered yoga, hiking and jogging in their itineraries, as well as local bakeries going viral online for their egg tarts.

Lee did not specify the name of the tour operator.

“I am very happy to see that the operators of different industries have come to terms with the reality of the changing environment,” he said.

“Hong Kong people are creative and flexible. As long as they are courageous enough to handle and adapt to changes in consumption and demand, Hongkongers, who have always been known as good at brainstorming new ideas, will surely be able to find new advantages and momentum amid the change.”

No Easter joy for Hong Kong retailers as trade group warns of tough times

Lee said the government would create a variety of opportunities for businesses to make money, such as next month’s fireworks display along the Kowloon waterfront to mark the start of the Labour Day “golden week” holiday on the mainland.

But he said it was up to businesses to take advantage of the coming events.

The chief executive also said the city remained popular and vibrant, citing data from the Art March drive. The Hong Kong Sevens rugby tournament also drew more than 100,000 attendees over three days, about a third more than last year’s event, he said.

Lee also touched on a series of finance industry events held at the end of March that brought high-spending guests to the city, arguing it showed what the conference economy could bring to the table.

But nightlife tycoon Allan Zeman said the local economy was facing a structural issue as residents engaged in “revenge” travel following the pandemic and headed to the mainland in pursuit of goods and services viewed as better value.

“This is a structural problem that is affecting Hong Kong for sure and I don’t think it is going to get better,” he said.

Zeman, founder of the popular Lan Kwai Fong nightlife district, said that local businesses could consider revamping their image to appeal to more consumers or introducing new brands.

But the government would still need to contribute to a certain extent by organising events to encourage local consumption and draw visitors who would not normally visit Hong Kong, he argued.

“You can redecorate your restaurant … you can have a great club, but we need the government to keep doing events in order to draw in not the normal international tourists, but the tourists who are coming to events in Hong Kong,” Zeman said.

Hong Kong to light up skies for Labour Day ‘golden week’ holiday

Simon Wong Ka-wo, the president of the Hong Kong Federation of Restaurants and Related Trades, agreed with the city leader that a need existed for the food and beverage industry to develop new ideas, but he maintained the same requirement applied to authorities as well.

“The government hosting more events will help bring more tourists to Hong Kong, but in this regard, the government and the Hong Kong Tourism Board has not done enough,” he said. “Just releasing fireworks or something similar will not bring anything special. It will only put us in a state of self-delusion and provide benefits limited to certain areas like Tsim Sha Tsui.”

Wong stressed industry players had been trying hard to come up with ways to boost customer traffic, noting they needed to find new sources to offset those residents who were spending outside Hong Kong.