Hong Kong retailers expected to gain from China-South Korea tension
THE ongoing spat between China and South Korea over a controversial US military-deployed missile in South Korea is worrying the tourism industry.
South Korea depends heavily on China for tourism revenues and an arbitrary ban of group tours, airlines, and cruises to South Korea could prove detrimental to the country’s inbound tourist numbers.
However, as a short-term result of the tension, Hong Kong is expected to gain as mainland Chinese tourists redirect to the island.
Mariana Kou, head of Hong Kong consumer research with CLSA, told South China Morning Post (SCMP), “Hong Kong may be one of the major beneficiaries of the latest movement.
“South Korea, Southeast Asia and Hong Kong are all short-haul attractions favored by mainlanders. Often if one market faces headwinds, it can have a knock-on effect on the others.”
Hong Kong retailers have been affected by an economic slump and an influx of Chinese tourists could help turn things around.
The SCMP report said US clothing line Abercrombie & Fitch was forced to shut its four-story flagship store due to the economic slowdown.
Meanwhile, the cost of a trip to Hong Kong for Chinese travelers is roughly about the same as a trip to South Korea, both recording approximately US$260 for a five-day trip.
Walter Woo, a consumer analyst with China Merchant Bank International, said, “For many Chinese people who would otherwise head to South Korea for vacation, they may have a second thought and pick another destination not too far away from what they can afford and not too different from what they are expecting.”
Data from the Hong Kong Tourism Board revealed individual spending of visitors in Hong Kong has taken a downward spiral with average overnight spend last year falling to HK$6,602 (US$850) from HK$7,234 (US$931) the year before.
Also projected to reap benefits from a redirection of Chinese tourists are Thailand and Japan.