Tourists stay away from Hong Kong during China's Golden Week

In this photo taken on July 26, 2019, demonstrators offer leaflets to arriving tourists during a protest at Hong Kong airport. Paranoid they could be targeted and wary after seeing footage of the protests, many Chinese tourists are staying away from
In this photo taken on July 26, 2019, demonstrators offer leaflets to arriving tourists during a protest at Hong Kong airport. Paranoid they could be targeted and wary after seeing footage of the protests, many Chinese tourists are staying away from the city.PHOTO: REUTERS

HONG KONG (BLOOMBERG) - The first week of October - China's national holiday break during which millions head out on vacation - marks one of the busiest periods for Hong Kong's tourism and retail industry.

As this year's "Golden Week" holiday approaches, the city's tour guides, hotel owners and shop assistants are staring down an abyss of empty planes, vacant hotel rooms and ghostly theme parks as anti-China protests enter their 17th week, scaring tourists away.

Chinese group tours for the Golden Week are set to plunge 86 per cent compared to the same period last year, according to the city's Travel Industry Council. Flight prices from Shanghai to Hong Kong are 38 per cent cheaper than last year's fares and only 30 per cent of hotel rooms are booked for the holiday period.

Paranoid they could be targeted in the leaderless protests and wary after seeing footage of vandalised subway stations and flaming barricades, Chinese tourists - who swelled Hong Kong's population by a fifth during last year's Golden Week as 1.5 million visitors streamed in - are staying away this year.

Losing its biggest source of tourist traffic will deal a body blow to the city's already hurting industries.

WEIGHING DOWN

It's also a worrying sign for consumer brands and luxury retailers that rely on Hong Kong as a top destination for millions of mainland shoppers. It is the biggest export market for Swiss watches and the regional base for luxury giants like Kering and Prada. Retail sales by value dropped 11.4 per cent in July and are likely to plunge further.

Mr Sam Lau, the owner of five hostels in the bustling shopping district of Tsim Sha Tsui in South Kowloon, has deployed two employees to approach passers-by, especially those with suitcases, and hawk rooms at negotiable rates.

"We have to accept the reality now," Mr Lau said. "I can't see the future. I need to pay my employees."

 
 
 

In past years, his rooms have always been full of Chinese visitors during Golden Week, but only 40 per cent of rooms are booked right now, and he worries that even those may not show up.

He's thinking of converting hostel rooms into apartments for long-term rental to pivot his business away from tourism.

Across the city, only around 30 per cent of hotel rooms are booked a week before the start of Golden Week, compared to the usual 70 per cent, said Mr Yiu Si Wing, a Hong Kong lawmaker representing the tourism industry. He expects tourism arrivals to plunge 40 per cent this Golden Week compared to the same period last year.

The National Day fireworks next week have been cancelled citing public safety concerns, along with a golf tournament later in the month.

The chill over this year's Golden Week is also pressuring airlines. Even with carriers like Cathay Pacific Airways reducing and re-routing flights after protesters disrupted airport operations last month, prices and bookings are down compared to Golden Week last year.

According to figures from Chinese travel portal Qunar.com, the price of a flight from Shanghai to Hong Kong has dropped nearly 38 per cent for this year's Golden Week compared to the same period last year, while the number of bookings has slipped by nearly 22 per cent. For flights from Beijing, prices are unchanged, but bookings have plunged 46 per cent.

"There has not been a single inquiry about travelling to Hong Kong in the past two months," said Ms Mingxin Li, manager of Shunyuan Holidays, a retail travel agency in Beijing. "It's a huge blow to companies that rely heavily on Hong Kong tours."

Fifteen tour groups are scheduled per day for this year's Golden Week, a fraction of the 110 last year, according to the Travel Industry Council.

In the Chinese city of Hengqin, about two hours from Hong Kong, 40 tour guides sat in a lecture hall this week taking a three-day class to qualify for a tour guide licence in mainland China.

They are the lucky ones: 1,000 Hong Kong guides had applied for those 40 spots, said Ms Alice Chan, the Council's executive director.

"There are 6,100 licensed tour guides in Hong Kong and many of them have no work now," she said. "They have the time to go to Hengqin to take the course and then they get one more chance to work. You can see how desperate they are."

Hengqin has promised a 3,000 yuan (S$580) cash incentive for Hong Kong or Macau guides who get a licence in the district.

Hotel workers are also worried for their jobs. About 77 per cent of people working in hotels have been asked to take unpaid leave of up to three days while about 43 per cent believe hotels will cut jobs if the situation worsens, according to a survey of 438 Hong Kong hotel workers conducted at the end of August.

 
 

ADVANTAGE MACAU

Macau, the world's largest gaming hub, is emerging as an alternative to Hong Kong for tourists during Golden Week, said Mr Stephen Lau, president of Power of the Macau Gaming Association, an organisation that represents casino workers.

If the protests continues, the Macau government may start marketing campaigns to attract visitors from China, Europe and the United States directly, he said.

Some Chinese consumers are also looking for the opportunities in the crisis.

"Hong Kong has never been so affordable," said Ms Michelle Zhang, a finance executive based in Fuzhou who frequents the city for its luxury shops.

She's ready to seize a last-minute flight to the city if no major disruption erupts over the Golden Week. "Unlike previous years, there's no need to scramble to book a room or an air ticket."

Still, many have shelved their plans.

Ms Xia Chen, a 50 year-old taxi driver in Rizhao, a city in China's eastern Shandong province, was going to visit Hong Kong with her husband, as they planned to be in neighbouring Guangzhou for the holiday, but has put off the plan.

"We were worried about our safety and decided in the end to wait for a safer Hong Kong," she said.