The ongoing protests in Hong Kong, now in their 15th week, have delivered a blow to the territory’s tourism industry not seen since the 2003 SARS epidemic.
Tourist arrivals in the territory declined almost 40 percent last month from a year earlier, Hong Kong Financial Secretary Paul Chan (陳茂波) wrote in a blog post on Sunday.
That is the biggest year-on-year decrease in visitor numbers since May 2003, when arrivals sank almost 70 percent in the midst of the disease outbreak that ultimately claimed hundreds of lives in the territory, according to data compiled by Bloomberg from the Hong Kong Tourism Board.
“Social issues in the past few months, especially the continued violent clashes and blockading of airport and roads, have seriously impacted Hong Kong’s international image as a safe city,” Chan said in his post, which was written in traditional Chinese. “The most worrying thing is that the situation is not likely to turn around in the near future.”
The territory’s tourism, retail and hotel industries have been particularly hard hit, Chan said. Occupancy rates of hotels in some districts fell more than half, while room rates decreased 40 to 70 percent. Many meetings and business trips have been postponed or moved to other places, he said.
The protests, which morphed from opposition to a proposed extradition law to a broader challenge against Beijing’s authority, have placed a growing toll on the territory’s economy.
Retail sales by value dropped 11.4 percent in July, the first full month affected by the protests, while sentiment among small businesses has hit record lows. Hong Kong’s economy overall contracted 0.4 percent in the second quarter from the previous period, raising the prospect of a technical recession.
The protests show few signs of resolution despite Hong Kong Chief Executive Carrie Lam’s (林鄭月娥) decision last week to formally withdraw the extradition bill that sparked the movement in the first place.
Based on tourism figures from August last year, a 40 percent drop would result in about 3.5 million visitors, the lowest level in more than seven years.
Shares of Hysan Development Co (希慎) and Wharf Holdings Ltd (九龍倉), which operate malls in Causeway Bay, dropped more than 1.6 percent on Monday trading after police fired tear gas in the district on Sunday night.
Wynn Macau Ltd (永利澳門) slid as much as 3.3 percent, and hotel operator Shangri-la Asia Ltd (香格里拉酒店) lost 2.4 percent.
MTR Corp (港鐵) fell 1.4 percent after protesters again vandalized a number of train stations. The MSCI Hong Kong Index was down 0.4 percent.
Retailers are making plans to ride out the disruption. Sa Sa International Holdings Ltd (莎莎國際), a cosmetics retailer, has asked some managers in its back office to take no-pay leave for as many as four days each month from this month, Ming Pao reported yesterday, citing people familiar with the matter.
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