Businesses brace for misery at Christmas

Source: South China Morning Post | Published: December 9, 2020

After months of protests, tourist arrivals could fall by up to 40pc on last year, blowing a hole in the takings of restaurants, shops and hotels

Hong Kong’s tourism, retail and dining sectors are bracing for the most dismal Christmas in decades, a slump brought on by the city’s worst political crisis since its return to Chinese sovereignty in 1997.

Shops could suffer at least a 15 per cent drop in revenue, experts said, and restaurant takings could fall as much as 30 per cent.

Tourism sector lawmaker Yiu Si-wing estimated the number of visitors arriving during the holiday would drop by 30 to 40 per cent. “Even during Sars, the effects only took place in the first half of the year. There hasn’t ever been such a drop for Christmas,” Yiu said, referring to the 2003 outbreak of severe acute respiratory syndrome.

Yiu said hotel occupancy rates were above 90 per cent at this time last year, but levels in protest zones such as Tsim Sha Tsui and Mong Kok would likely be about 30 to 40 per cent. He said that last year a room at a three- or four-star hotel could cost more than HK$1,200, but this season prices could drop 30 to 50 per cent.

Anti-government protests have transformed from peaceful demonstrations into outbreaks of violence, notably in tourist, commercial and residential districts. More than 40 countries and regions have issued travel warnings or alerts about the city.

Alice Chan Cheung Lok-yee, of the Travel Industry Council, expected an average of 40 mainland tour groups to arrive each day in the festive season, similar to November, because Christmas is not a holiday for mainland visitors.

Even so, that would still be a huge drop from last year, when she said 277 groups visited on December 25 and 334 came the next day.

There was a similar slump in visitors from other nations, Paul Chan Chi-yuen, co-founder of guided-tour company Walk in Hong Kong, said.

He said up to 70 per cent of bookings for individual visitors, mainly from the United States, were cancelled for Christmas and new year. “The unrest will subside a bit, but the situation is going to be the new normal,” he said.

To boost attendance, Ocean Park has launched offers allowing residents to buy two tickets for HK$700, almost 30 per cent below the original price. It also launched a new ride called “Wild Twister”.

Lantau Island’s cable car attraction, Ngong Ping 360, has also lowered prices, offering a round-trip ticket for HK$30 for children, a deduction of HK$80.

Hong Kong Disneyland Resort offered 15 per cent off for locals who buy three annual passes.

Simon Wong Ka-wo, president of the Hong Kong Federation of Restaurants and Related Trades, said this Christmas season was the worst he had seen in over 50 years in the industry. Wong said revenues could drop by 30 per cent compared with last year because residents would be reluctant to dine out and there were fewer visitors. He predicted restaurants would lose HK$3.5 billion in revenue this month.

“If December continues to be this bad, I don’t know how many restaurants can survive the Lunar New Year [in January],” he said.

But economist Andy Kwan Cheuk-chiu, director of the ACE Centre for Business and Economic Research, said retail sales in December would not be as bad as some expected – falling by around 15 to 20 per cent on last year. Still, it could be the worst year-on-year decline since 1998, he said, when sales fell 17 per cent.

Alan Cheung Ho-lun, the 40-year-old owner of Sands Medicine Shop in Wan Chai, estimated December revenues would be halved at least. He said his shop usually made over HK$15,000 a day at the same period last year.

“I had to delay my rent payment. I really have no money. I am not joking,” Cheung said.

He said mainland visitors were his main customers. Now, he must resort to selling his goods on WeChat and mailing products to his clients across the border.

Yet a few businesses have benefited from sharing the political views of protesters.

Charles Yip, owner of Let’s Jam, has “Lennon Walls” in his two restaurants for guests to write pro-democracy comments on Post-it stickers. He predicted they would be full during the holiday.

“Our income on normal weekends is equal to the revenue during last Christmas,” he said, adding that he was even considering opening a new branch.

Additional reporting by Denise Tsang