Hong Kong resumed normal border crossings over a year ago, becoming one of the last regions globally to lift pandemic restrictions. Despite the government’s repeated emphasis on “returning to normal,” and the introduction of initiatives such as “Hello Hong Kong,” “Happy Hong Kong,” and “Hong Kong Night Extravaganza” since early last year to attract both residents and tourists to spend, the results have been lackluster. Domestic spending by travelers, excluding figures from the pandemic period, hit a new low not seen since the 2009 financial crisis.
Retail sales and restaurant earnings, reflecting the local market, have still not recovered to pre-pandemic levels, with some even performing worse compared to the period just after the restrictions were lifted last year.
The government vigorously promoted tourism, with the Hong Kong Tourism Board allocating a significant budget for market promotion post-pandemic. The tourism promotion expenditure surged from HK$1.138 billion in the 2021-22 fiscal year to HK$1.075 billion in the 2022-23 fiscal year, reaching HK$1.2062 billion in the 2023-24 fiscal year.
However, after over a year, the number of visitors has yet to fully recover. In March this year, the number of non-mainland visitors to Hong Kong (excluding those from mainland China) reached nearly 940,000, a monthly peak post-pandemic, but still below the over 1.1 million visitors during the same period before the pandemic.
For the entire year of 2023, the total number of non-mainland visitors stood at only 6.0153 million, a decrease of 54% and 45% compared to the full years of 2018 and 2019, respectively.
If mainland Chinese visitors are considered separately, there were 2.4624 million visitors in March, accounting for only 55% of the nearly 4.48 million visitors during the same period in 2019.
In 2023, the total number of mainland Chinese visitors was only 26.76 million, representing 52% of the 51.0382 million visitors in 2018 and 61% of the 43.7747 million visitors in 2019.
Since November last year, the Tourism Board distributed one million “Hong Kong Gourmet Delights” dining vouchers to visiting tourists, each valued at HK$100. With these vouchers, tourists could dine at around 1,200 designated restaurants and bars after 6 pm with no minimum spending requirement. Additionally, starting from December last year, the Tourism Board also distributed a total of 200,000 “Hong Kong Gourmet Delights” dining vouchers to local residents.
The Commerce, Cultural and Tourism Bureau revealed that all dining vouchers had been distributed. Of the one million tourist vouchers, 60% were picked up by mainland Chinese visitors, yet the overall redemption rate was only 20%, amounting to a total expenditure of HK$24 million.
Despite the government’s incentives for tourists, the domestic spending by travelers in 2023 fell behind that of 2019. According to government statistics, overnight visitor domestic spending in 2023 was HK$119.07 billion, excluding the pandemic period, marking a new low not seen since 2009, and falling short of the HK$138.195 billion spent in 2019.
As for non-overnight visitors, the spending in 2023 was only HK$22.164 billion, reaching a new low since 2008 and less than half of the figure in 2019.
In terms of per capita spending, mainland overnight visitors spent HK$6,495 per person last year, slightly higher than the HK$5,990 spent in 2019 but still the second lowest since 2008, representing a 27% decrease from the peak of HK$8,937 in 2013.
With challenges in the mainland’s economy in recent years, there has been a rise in “day-trip tourism” with many visitors not staying overnight in Hong Kong. The data shows that non-overnight mainland visitors spent an average of only HK$1,383 per person last year, a 37% drop from the HK$2,410 spent in 2019, also marking a new low since 2008. Compared to the peak of HK$2,721 in 2013, this represents nearly a halving of spending.
In terms of overall market performance in Hong Kong, the retail industry’s sales value in 2023 was HK$406.649 billion, except for the pandemic years in the period from 2020 to 2022, this was the lowest since 2011 and had not returned to pre-pandemic levels.
Based on the latest figures, the retail sales value in Hong Kong reached HK$31.191 billion (temporary figure) in March this year, slightly lower than the HK$33.522 billion in the same period last year. Comparing March figures, excluding those during the pandemic years from 2020 to 2022, this March saw the lowest retail sales value since 2010.
As for restaurant earnings, it totaled HK$109.538 billion last year, excluding the pandemic years from 2020 to 2022, marking the lowest since 2016.
In the post-pandemic period from 2023 to March this year, the highest monthly earnings for restaurants were recorded in January last year. In January, with the cancellation of the vaccine pass at the end of December 2022 and along with Chinese and Western New Year celebrations, restaurant earnings reached nearly HK$9.6 billion. However, in February, despite the full reopening of the border with mainland China, restaurant earnings dropped to HK$8.61 billion. The following months of 2023 fluctuated between HK$9 billion and HK$9.5 billion. Yet, in September and November, earnings dropped to around HK$8.61 billion and HK$8.914 billion, respectively.
Beginning this year, based on government temporary figures, restaurant earnings in January and March were only HK$9.571 billion and HK$9.329 billion respectively, slightly lower than the HK$9.597 billion and HK$9.361 billion in the same periods last year.
Regarding the nightlife industry, only the earnings from October to December last year since the cancellation of the vaccine pass in late December 2022 met or exceeded the levels from 2019. The total earnings for the bar industry in 2023 were HK$1.34 billion, except for the pandemic period, the lowest since 2009.
Entering 2024, the first quarter’s bar earnings were only HK$0.274 billion, representing 82% of the HK$0.332 billion from the same period last year.