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Tourism in trouble: HK demos hit econ
Published on: Monday, August 12, 2019

HONG KONG: Empty hotel rooms, struggling shops and even disruption at Disneyland: months of protests in Hong Kong have taken a major toll on the city’s economy, with no end in sight.

City leader Carrie Lam has warned that the international financial hub is facing an economic crisis worse than either the 2003 SARS outbreak that paralysed Hong Kong or the 2008 financial crisis.

“The situation this time is more severe,” she said. “In other words, the economic recovery will take a very long time.”

The private sector, in particular the tourism industry, has begun counting the cost of more than two months of demonstrations that erupted in opposition to a bill allowing extraditions to China but have morphed into a broader pro-democracy movement.

The figures are stark: hotel occupancy rates are down “double-digit” percentages, as were visitor arrivals in July. Group tour bookings from the short-haul market have plunged up to 50 percent.

“In recent months, what has happened in Hong Kong has indeed put local people’s livelihoods as well as the economy in a worrying, or even dangerous situation,” warned Edward Yau, Hong Kong’s secretary for commerce and economic development.

The city’s tourism industry says it feels under siege.

“I think the situation is getting more and more serious,” Jason Wong, chairman of the Travel Industry Council of Hong Kong, said. 

The impact is so bad that travel agents are considering putting staff on unpaid leave as they try to weather the storm, he warned.

Images of increasingly violent clashes between masked protesters and police firing tear gas in the city’s streets have made global headlines, with protesters announcing new demonstrations throughout August as they press their demands.

A Hong Kong Tourism Board spokesperson said that the number of forward bookings in August and September has “dropped significantly,” suggesting the economic toll will linger throughout the summer season.

A string of travel warnings issued by countries including the United States, Australia and Japan is likely to compound the industry’s woes.

The fall in arrivals has hurt Hong Kong’s carrier Cathay Pacific, which was also forced to cancel flights this week during a general strike that caused chaos in the city.

And even Disneyland Hong Kong has been hit, with CEO Bob Iger telling reporters: “We have seen an impact from the protests.”

“There’s definitely been disruption. That has impacted our visitation there.”

The retail sector has also been hit by the drop in arriving visitors hunting for bargains, shops often forced to shutter during the sometimes daily protests. 

Experts say the crisis is compounding the economic downturn Hong Kong was already experiencing as a result of being caught up in the US-China trade war.

It’s a “double whammy,” warned Stephen Innes, Managing Partner of Valour Markets.” 

“We always take a view that oh, this too will pass. But so far that view is not holding any water... and now it seems like every weekend we’re dealing with further escalations,” he said. 

The property market, which fell over 20 percent during the 2008 financial crash, remains strong. – AFP



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