HONG KONG – Tourist arrivals in Hong Kong dived to a new low in February, prompting the government to resort to injecting millions to support the sector hit by the coronavirus outbreak, fuelling a growing chorus urging Chief Executive Carrie Lam’s administration to turn away all tourists.
The Hong Kong Tourism Board (HKTB) on Monday (March 16) announced that the provisional figure for visitor arrivals to Hong Kong last month plummeted 96.4 per cent from the year-ago period to 199,000 – the daily average during peak season in 2019.
This figure is far lower than the 427,000 arrivals in May 2003, during the severe acute respiratory syndrome (Sars) outbreak.
Before the government’s major border closures on Feb 8 to curb the spread of Covid-19, average daily arrivals ranged between 10,000 and 20,000.
After Feb 8, it fell to 3,300, where around 80 per cent were non-mainland Chinese visitors.
The worst is not over for Hong Kong’s tourism sector, HKTB warned, saying it expects “a further drop in arrivals in March” as the Covid-19 pandemic adds more pressure.
So far, 47 countries and jurisdictions have issued advisories against travel to mainland China, with Hong Kong included in 28 of those.
HKTB executive director Dane Cheng said the latest figures are “a clear sign” that the travel and related industries have been hit very hard.
To speed up the recovery of Hong Kong tourism, he said HKTB will fork out HK$400 million (S$73 million) to strengthen support for trade and joint promotions.
This year, funding proposed in the Budget for HKTB is about HK$1.1 billion.
Measures will cover local and overseas travel agencies, hotels, airlines and attractions, as well as the retail, food and beverage,and Meetings, Incentives, Conventions and Exhibitions (Mice) industries, Mr Cheng noted.
The initiatives include offering subsidies to retail and catering sectors, waiving participation fees for the more than 40 trade activities organised by HKTB, and subsidising Mice organisers’ bid for large-scale conventions and exhibitions.
The development comes as the government faces mounting pressure to take more drastic actions, such as the banning of all tourists to Hong Kong, as worries grow over the recent rise in imported Covid-19 cases.
MICROBIOLOGIST CALLS FOR MORE RESTRICTIONS
On Monday, the Centre for Health Protection said Hong Kong was seeing a “second wave” of Covid-19 infections, as all but one of the nine new cases involve people who are believed to have been infected while overseas in places such as Europe, Japan and Dubai.
These nine comprise confirmed cases and those who preliminarily tested positive.
There are now 155 confirmed cases in Hong Kong, including four patients who have died.
On Monday, microbiologist Ho Pak Leung of Hong Kong University urged the government to immediately ban non-Hong Kong residents who have been to countries issued with red travel alerts.
This comes as around 70 per cent of the more than 40 new cases in the past two weeks involve people who have recently gone abroad during their incubation period, said Dr Ho, adding that there could be a steep spike in confirmed cases that will put pressure on the city’s hospitals.
Pro-Beijing lawmaker Michael Tien on Monday said Hong Kong should ban all tourists from the city until there are enough electronic wristbands to monitor people in self-quarantine.
In recent weeks, Hong Kong has ramped up its quarantine measures to slow the spread of the virus.
On Sunday, it expanded its mandatory two-week quarantine to include visitors and Hong Kong residents coming from the United Kingdom, Ireland, United States and Egypt.
Those who have been to these countries the past 14 days will be subjected to the measure from Thursday.
Quarantine measures announced previously remain. They apply to people who have been to the mainland, South Korea, Iran, Hokkaido in Japan, and the Schengen Area in Europe, which comprises 26 states such as Austria, Finland, Greece, Portugal and Switzerland.
Following tougher quarantine measures, Cathay Pacific said it would add more flights to the US and London this week to bring residents back to Hong Kong.
On Monday, local media RTHK reported that parents are scrambling to evacuate their children studying in the UK ahead of the mandatory quarantine, as all direct flights to Hong Kong have been snapped up.
Meanwhile, the government said it would start charging people HK$200 for lodging and meals from Tuesday for staying in temporary accommodation it provides for those from the mainland who have to undergo quarantine.
This is to ensure the scheme benefits people with genuine need.
In a statement issued on Monday, the government said three temporary quarantine sites housing people who have returned to the city from the mainland are now close to maximum capacity.
It noted that some Hong Kong residents who often travelled between the mainland and Hong Kong have stayed in the temporary housing repeatedly, while others with local residences have also insisted on staying there.
SCHEME TO HELP RETAIL SECTOR
Besides relief measures to help the tourism sector, the government also said it would launch a HK$5.6 billion Retail Sector Subsidy Scheme on March 23 to help retailers.
The scheme comes under the Anti-epidemic Fund and is expected to benefit around 70,000 retailers.
Each eligible retail store will receive a one-off subsidy of HK$80,000, and the first tranche aid will be made next month.
OCBC Wing Hang’s economist Carie Li said that with more travel restrictions around the globe, the government’s efforts to attract tourists will not be effective.
“At this moment, the subsidy and cash handouts may help to prevent some companies from going out of business and therefore buy some time to save jobs.
“However, if travel restrictions remain in place for several more months or even get implemented by more countries, more small and medium-sized enterprises in tourism, hotel, retail, and catering sectors could be put out of business, which may result in an increase in layoffs, as some employees currently on no-pay leave may lose their jobs ultimately.”
And if smaller firms start to shutter, there will be a considerable spillover effect.
“First, the retail property sector will take a hit. Retail shop rent and price in January dropped by 4.7 per cent year on year and 10.1 per cent year on year respectively, and are likely to fall further if more retail stores close,” said Ms Li.
The housing market will also slow down due to rising concerns about the labour market and Hong Kong economic outlooks, she said.
This will, in turn, mean that loan and investment demands may remain muted despite lower borrowing costs, which would be unfavourable to the financial sector.
On Monday, the Hang Seng Index fell more than 4 per cent or 969 points to close at 23,063.57 on fresh US interest rate cut and jitters about Covid-19.