Hong Kong’s retail ‘golden age’ is over as Chinese tourists continue to tighten wallets | Wilnesh News

Hong Kong’s retail sector has been languishing since the outbreak, and analysts say it could take years to rebound.

According to statistics, in the first seven months of this year, the city’s retail sales fell by 7.3% compared with 2023 Government data released on Friday. Although there are a lot of Tourist arrivals rebounded 52.2% period.

The city was once known as a shopping paradise, especially for mainland Chinese tourists, who could often be seen walking out of luxury stores with multiple bags in hand. Mainland China accounts for nearly 90% of the HK$22.16 billion (US$2.84 billion) Tourist consumption on the day In 2023, overnight visitor spending will reach HK$119.1 billion, accounting for 67%.

But analysts say the golden years won’t return “for a long time” as mainland China tightens its purse strings under a cloud of economic uncertainty.

“The decrease in spending by Chinese middle-class tourists in Hong Kong can be attributed to the economic slowdown – triggered by the real estate downturn, shifting consumption patterns, challenges in employment prospects and a greater focus on savings due to changes in travel preferences,” said Christine Li. Head of Research, Asia Pacific.

In 2023, spending by mainland overnight tourists HKD 6,495 ($833) per capita, an increase of 8.4% compared with 2019. However, in 2023, the same-day consumption of mainland Chinese tourists dropped by 37%, to only HK$1,383.

“Post-COVID-19, mainland Chinese consumers are more focused on experiences than material products as they are eager to reconnect, make up for lost time and live in the present,” Li said. “This shift in values ​​has led to weak sales of high-end luxury goods, This is particularly evident in Chinese consumer spending.”

Concerns about the mainland’s economic situation have spread to how money is spent elsewhere. Analysts point out that “zero dollar” tours are popular, with tourists paying for transportation, accommodation and meals in advance. Travelers on a budget may not spend much beyond the upfront cost covered by these packages.

“They take photos for their online accounts, but they don’t spend money. They don’t spend the same amount of money in shops or restaurants as they used to,” said Simon Smith, regional director of Asia research and consulting at Savills. Smith) Pacific told CNBC. “The golden age of Hong Kong’s retail market is over. That’s the reality.”

Figures from the Hong Kong Tourism Board show the city’s popularity It received 34 million tourists last yearof which 26.8 million are from mainland China. This is a significant drop The number of outbound tourists in 2019 was 55.91 millionof which 43.77 million are from mainland China.

Even Hong Kong residents are increasingly shopping in neighboring Shenzhen, which is only a 14-minute high-speed train ride away, Smith noted.

“The price is one-third that of Shenzhen. You can enjoy good food, great service and modern shopping malls,” Smith said, adding that many young professionals – often the biggest shoppers – have moved on from Immigrate from Hong Kong.

Even wealthy Chinese are spending less on luxury goods when they visit Hong Kong, noted Knight Frank’s Lee.

“The decline in luxury goods consumption by mainland Chinese tourists has had a profound impact on Hong Kong’s retail industry. Hong Kong’s retail industry relies heavily on mainland Chinese tourists to buy high-end products such as watches, handbags and jewelry, and is therefore facing tremendous pressure. A major challenge,” she said. Said in an interview with CNBC.

Nick Bradstreet, head of Asia Pacific retail at Savills, told CNBC: “Unfortunately, Hong Kong is going through some challenging adjustments, and tourists and locals now have very different mindsets. .