Hong Kong braces for tourism "winter" as China visitors stay away

Oriental Watch Holdings

20/01/2016 10:24

* Mainland inbound tours seen down 60 pct in H1 - industry 
expert 
    * HK's tourist arrivals fall 2.5 pct, 1st decline since 
2003-govt 
    * Chinese tourists move away from pure shopping trip - CLSA 
 
    By Donny Kwok 
    HONG KONG, Jan 20 (Reuters) - Tour groups to Hong Kong could 
shrink by as much as two-thirds in the first half of this year, 
an industry executive said, dealing another blow to retailers 
and an economy facing pressure from slowing growth in China. 
    China accounts for almost three-quarters of all visitors to 
Hong Kong, which relies on tourism for about 5 percent of its 
GDP. 
    Tourism numbers, however, fell last year for the first time 
in more than a decade and Ricky Tse, chairman of the Hong Kong 
Inbound Tour Operators Association, told Reuters he expects a 
further decline this year as the strong Hong Kong dollar 
continues to drive mainland Chinese to comparatively cheaper 
destinations such as Japan and South Korea. 
    "The drop will continue for sure. The winter has just 
begun," Tse said, adding that he expected the number of tours by 
Chinese visitors to fall by as much as 60 percent in the first 
half of this year after halving in 2015. 
    Government data shows tourist arrivals to Hong Kong fell 2.5 
percent year-on-year in 2015 to 59.32 million, the first decline 
since 2003 when the city was hit by an outbreak of Severe Acute 
Respiratory Syndrome (SARS). (http://bit.ly/1WtuPZN)[nL3N0UT23G] 
    This decline has hit luxury retailers including Chow Tai 
Fook Jewellery  1929.HK , Cartier owner Richemont  CFR.VX  and 
Burberry Group PLC  BRBY.L , with the latest available data 
showing overall retail sales falling for the ninth consecutive 
month in November, the longest period of decline in 13 years. 
 urn:newsml:reuters.com:*:nL3N14J1C8 
    Chow Tai Fook, China's largest jewellery retailer by market 
value, said this month it will close 5-6 stores this fiscal year 
as tourism remains weak. 
    Brokerage CLSA report, forecast trips by mainland Chinese to 
Hong Kong and the neighbouring gambling hub of Macau to average 
3 percent growth over the next five years, compared with 16 
percent growth for all other markets.   
    "The move away from pure shopping trips is one of the main 
reasons that led to the slowdown in Hong Kong," CLSA said in a 
recent report. "Looking into 2016, we believe the trend will 
continue." 
 
 (Reporting By Donny Kwok; Writing by Anne Marie Roantree; 
Editing by Miral Fahmy) 
 ((annemarie.roantree@thomsonreuters.com; +852 97387151; Reuters 
Messaging: annemarie.roantree.thomsonreuters.com@reuters.net)) 
 
Keywords: HONGKONG RETAIL/