Pandemic regulations flatten Hong Kong's once-thriving tourism industry
November 23, 2020
Business

Pandemic regulations flatten Hong Kong’s once-thriving tourism industry

HONG KONG – At a port in northern Hong Kong, hundreds of tour buses are gathering dust as they have been off the road for 10 months since city authorities have prohibited tourists from visiting the financial hub because of the pandemic.

According to Freddy Yip, president of Hong Kong’s Travel Agent Owners Association, the port has turned into a “bus cemetery”. Hong Kong used to be the leading tourist city destination in the world last year. To add to the woes, the government will end a wage subsidy programme that has helped about 2 million employees.

The initiative was introduced in September and the government has announced that it will not be extended beyond November given its high cost. This leaves many businesses dependent on tourism on the brink of collapse.

“If they cannot see any light ahead of them, they will just stop and cut their losses,” said Yip, 70, who has worked in the trade for nearly 50 years. 

According to a government spokesman, authorities are “keeping a close watch on the latest situation and will respond in a timely manner”.

Last year, there were 56 million visitors in the city, which was ranked number one for arrivals globally in 2019 by research company Euromonitor International. Most of the visitors, who hail from mainland China, prefer the city for its melting pot of cultures, harbour views and shopping destinations.

Tourism accounts for 5% of gross domestic product, or about $18 billion, of the global financial hub and the sector provides employment to 260,000 people.

Visitors from mainland China shop for baby formula, cosmetics and luxury goods under the perception that they have better quality in Hong Kong than at home.

Government figures show that visitor arrivals in Hong Kong have gone down by 99% year-on-year every month since February. Despite the fact that a travel bubble with Singapore allowing a certain number of tourists to travel between both cities after testing for the pandemic will begin this week, it will not stem the decline.

As per the travel bubble, there will be only one flight a day carrying 200 passengers. Last year, there were 6.8 million visitors in January, including 5.5 million from mainland China.

According to tour guide Mimi Cheung, 46, the bubble is not viable given the limited number of visitors, strict rules and exorbitant charges – HK$2,000 ($260) for coronavirus tests and HK$6,000 ($774) to buy a tour in either city.

“The government should open the mainland border under safe conditions. It will bring some hope,” said Cheung, who works as a night security guard.

Reopening the border with mainland China remains a top priority, said Hong Kong leader Carrie Lam. However, Chinese officials will not budget unless the city marks zero cases.

To boost local tourism, city authorities have been offering free tours for small groups. But it has done little to make the situation better, say tour operators.

Several travel agencies in the city have instructed their employees to go on unpaid leave from December as they lack funds to pay salaries or rent.

The city was rocked by violent anti-government protests in the second-half of last year and that affected the flow of tourists, leaving many tour operators without cash reserves to weather the pandemic crisis.

The MICE segment will witness a 90% revenue dip this year and it is to the tune of HK$50 billion ($6.45 billion), said Stuart Bailey, chairman of the Hong Kong Exhibition & Convention Industry Association.

This segment employing around 80,000 people suffered greatly as most events were cancelled this year.

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