The eight-week protests in Hong Kong began to take a toll on tourist arrivals in the former British colony. HKTB newly released for June -the first month where protests were signalled- show a marked slowdown in total tourists’ arrivals (the overnighting in the territory). They only grew by 1.2% in June compared to 10.5% in May. Devoid of Mainland China tourists’ arrivals, June performance is even more mediocre with total foreign tourists’ arrivals down by 1,1%. Surprisingly, tourists from ASEAN showed incredible resilience. But for how long?
Protests in Hong Kong in June and increasing political uncertainties began to affect tourist arrivals as anticipated by experts. In June, Hong Kong still recorded a growth in total visitors’ arrivals by 8.5%, but the progression was just divided by two compared to May (up by 19.5%). For Non-Mainland China markets, total visitors’ arrivals grew by 3.2% In June, down from 5.6% in May.
However, most notable are arrivals of overnight travellers -defined as tourists by UNWTO standards. June figures are characterised by a collapse in the growth rate. Last month, Hong Kong welcomed 1.2% more tourists than in June 2018. In May, the growth rate compared to the previous year still stood at 10.5%. While long-haul markets are characterised with a decline in both May and June, short-haul markets (Asian regional markets) showed surprising resilience. Tourists’ arrivals from all short-haul markets were up by 0.2% in June.
ASEAN countries were even showing an acceleration in a total number of tourist arrivals. Except for the Philippines, Thailand and Malaysia -the first two showing a slowdown in growth and the second a decline compared to May 2019- ASEAN countries recorded stellar performances in a rather stressful environment. Vietnam sees a total number of tourists topped the list with a jump of 42.8% followed by the Philippines, up by 15%. The Philippines generates the most significant number of tourists from Southeast Asia with 429,000 arrivals during the first half of 2019, a result primarily due to the importance of VFR as many Filipinos work in Hong Kong. In total, ASEAN tourist arrivals from the six HKTB-monitored countries were up by 4.9% to 1.29 million between January and June 2019.
However, the future might be less promising as the violence increased in July with televisions and social media echoing largely the violence in the former British colony. There were already reports of a decline in demand by 5% in both Singapore and Thailand in July with a further slowdown for the months to come as some countries start to advise travellers “to remain on alert” if visiting Hong Kong.
A clear sign that Hong Kong tourism will brace harder times is the decline in the occupancy rate in the hotel industry. In June, the occupancy rate at hotels was down by three points to 87%. It is still a very high rate, but hoteliers in Hong Kong are bracing for possible gloomy times ahead.
According to Reuters, by the end of June, hotel occupancy had already dropped by 20% compared to last year, and in July, hoteliers expect that the occupancy could be down by 40%. Two weeks ago, Hong Kong retailers warned that July and August sales could drop by double-digits compared to last year as tourists put off their visits. So far, the HKTB has remained silent over possible measures to stimulate markets. The tourism agency is undoubtedly monitoring the situation until it finally stabilises.