The Hong Kong quarterly economic growth is stagnant with the decline of Chinese tourism.
A drop of Chinese tourists in Hong Kong
The Hong Kong economy barely grew in the first quarter of this year, exports dropped and there were fewer chinese tourist visits from the mainland.
In March 2015, the number of Chinese tourists has fallen by 80%! Recent events, including the umbrellas movement cut the urge to continental China to cross the border.
Chinese tourists prefer to avoid to walk into town for shopping because they don’t feel welcome. That’s why, they choose other destinations for their holidays.
A slower growth
The Hong Kong government said on May 15 that the economy of the Asian financial center rose 0.4% in January-March from the previous quarter. He also announced “a visibly slower growth on visits of Chinese tourists and lower expenses in the territory.”
The decline in watch market
Watch exports were down 2% in February 2015, while they were rather increased over the first two months. Exports to China decreased by 21.8%.
Richemont, rich Swiss luxury watch company has just suffered this Hong Kong’s economic downturn. The group faced little luxury watch demand in Hong Kong. The luxury sector through difficult times and events have reinforced the concern linked to the slowdown of Chinese growth. The fight against corruption also has a negative impact on sales. Asia is a big market for Richemont and a quarter of its sales.
Foreign brands such as Burberry, have also seen their numbers reduced late 2014, early 2015.
With the turmoil pro-Hong Kong earlier this year and last year the decrease in Chinese inbound tourists doesn’t come as a surprise. Before choosing any given destination Chinese tourists take three criteria into account :
The harbor city sorely lacks the latter, scarring away the biggest spenders : Chinese tourists and their $3000 spending per travel.
How could Hong Kong address the issue?
From where I stand the only way to address the issue, aside from the obvious improving the situation would be launching an online campaign with a widespread PR campaign and massive use of social media to rebuild Hong Kong as a premium destination while diminishing the impact the massive PR blow dealt by Hong Kong’s protests.
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