Chinese Opt for Trendy McDonald’s Over Hermes in Blow to Hong Kong Tourism
Mainland Hermes purses were once displayed in malls by Chinese tourists to Hong Kong for Instagram photographs. Nowadays, a visitor clutching a McDonald's takeaway bag on a quiet street in the city's Mid-Levels neighborhood is the most common type of post.
A new class of post-pandemic Chinese travelers is being welcomed to Hong Kong; this traveler prefers more low-key activities over splurging on luxury goods. Many people take pictures on streets with unusual names or in dense residential areas, taking cues from influencers on the Instagram-like app Xiaohongshu. Others pose in front of a police station that has been extensively featured in vintage Hong Kong movies.
Younger social media users are responsible for changing travel behaviors as China's economy falters. Younger consumers in particular are changing their consumption habits while youth unemployment is still prevalent. During the recent Golden Week vacation, shoppers traveled less than anticipated and spent less money.
After shooting shots next to a road sign in the Kennedy Town district, Beijing visitor Mike Guo stated, "Most of my time in Hong Kong now is for taking photos by following the footsteps of influencers on Xiaohongshu." The vicinity of the sea and the area's hip coffee shops have drawn a lot of Chinese tourists.
Hong Kong's aspirations that it may rely on tourists from mainland China to boost its weak economy are damaged by this. According to the government, before COVID-19, the tourism sector made up around 3.6% of Hong Kong's GDP and employed roughly 232,700 people, or about 6% of the labor force.
Despite a 20% to 30% increase in foot traffic, Oliver Tong, head of retail in Hong Kong at JLL, reported that citywide retail sales over Golden Week were comparable to those of a typical weekend in Hong Kong. He continued, "The pessimism is even extending to the upcoming Lunar New Year holiday."
According to the Census and Statistics Department, the sale value of luxury items, such as jewelry and watches, was HK$5.2 billion ($665 million) in August, a 31% decrease from the same month in 2018 when widespread political protests and COVID-19 struck the city.
As more Hong Kong people left the city than came from the mainland, the retail and service sectors also suffered. According to information from the Immigration Department, there were around 970,000 travelers from the mainland, compared to a total of 1.5 million departures.
The strength of the dollar-pegged local currency, coupled with the offshore Chinese yuan's approximately 5% decline against the Hong Kong dollar since the year's beginning, is another significant aspect that is detracting from Hong Kong's luster. Right now, the two currencies are almost equal.
Guo used to go to Hong Kong once a month for shopping and insurance purchases but now believes there is little to no price difference between the two locations for luxury products. "Very few people come to Hong Kong for shopping because it is not very cheap under the
And while Hong Kong used to be without a doubt China's top shopping destination, Hainan province is now posing a serious threat. Global companies are expanding their presence on the tax-free tropical island in the country's south, making it the hottest spot for luxury shopping. The duty-free division of LVMH, DFS Group, revealed this week that it would construct a mega- mall there, the enterprise's first in mainland China.
Jiaxing Shi, who was making her first trip to Hong Kong from Guangzhou, a city just one hour away by high-speed train, claimed that she now only purchases luxury goods in Sanya, Hainan since she can get a better bargain there. She spent the afternoon with her friends taking pictures at a Kennedy Town coffee shop that overlooked the harbor.
The largest group of tourists in Hong Kong is changing their behavior, which is a wake-up call for the city's tourism industry, which has come under fire recently for being complacent and slow to change beyond pushing consumption-driven attractions. By setting up night markets offering regional delicacies and trinkets, for instance, the government recently started a push to promote Hong Kong's nightlife, which drew more residents than tourists.
Paul Chan, a co-founder of the walking tour provider Walk in Hong Kong, thinks that the tourism sector should seize the chance for transformation. Beyond stores and eateries, the city boasts unique cultural attractions including its older districts and more rural parts, according to him.
To show the rest of the world that we have a lot more to offer, we urgently need to broaden our image, Chan said.
