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    Passengers In Hong Kong And Macau Declined By More Than 90%, And Tourism And Retail Businesses Were Under Heavy Pressure.

    2020/2/5 9:14:00 2

    PassengerTourismRetail Business

    Contributing author Julia Hongkong Report

    The number of people crossing Hong Kong and Macao has dropped sharply.

    On February 3rd, Lin Zhengyuee, chief executive of the Hongkong Special Administrative Region, announced that in order to further reduce cross-border flows, the government will further close 4 ports at the beginning of 4 hours, including Luohu, Lok Ma Chau Spur Line, Lok Ma Chau Huanggang and Hong Kong and Macao port ports.

    Since January 30th, Hongkong has once again declared "closing the customs". Hongkong announced in January 28th that 49 cities in the mainland would suspend the issuance of the "free travel" visa to Hongkong, and suspend the 6 major ports such as West Kowloon and Hung Hom from the beginning of January 30th, and suspend the high-speed rail Hongkong section, intercity trains and cross-border bus and ferry services. In addition, other travel endorsements such as team tours in Hong Kong and Shenzhen on Monday were suspended.

    Hongkong has 14 ports connecting the mainland and overseas. At present, 10 ports have been suspended, leaving only Shenzhen bay port and Hongkong port of Hong Kong Zhuhai Macao Bridge, Hong Kong International Airport and Eic cruise terminal.

    According to the data of the Hongkong Department of health, 15 cases of new crown pneumonia were diagnosed in Hongkong as at 12 noon on February 3rd.

    The number of passengers entering Hongkong has been significantly reduced due to persistent pneumonia and new "closures" measures. According to the statistics released by the Immigration Department of Hongkong, it should be the annual "tourist peak season" from 24 to 31 January. However, the number of mainland tourists entering Hongkong daily is only 27 thousand and 500. Among them, the number of mainland tourists entering the country for the first time fell below 20 thousand to 19 thousand and 600 passengers in January 30th. By contrast, the number of inbound passengers exceeded 200 thousand on the thirty day of last year.

    Owing to the reduction or suspension of a number of transport services and port passenger services, the chief executive of the Hongkong Special Administrative Region, Lin Zhengyuee, said in January 31st that compared with 14 days ago, the number of mainland tourists arriving from the airport outside the port dropped by 91%. Most of the arrivals from airports outside the ports are Hongkong residents, while mainland passengers account for only 9.7%. Since January 27th, the number of mainland visitors entering Hongkong has been decreasing. The latest data show that in February 2nd, the number of mainland visitors entering Hongkong has dropped to 11715.

    According to the data released by the Macao Tourism Administration, the number of passengers entering Macao in from January 24th to 30th dropped to 261 thousand, a sharp decrease of 78.3% compared with the same period last year, of which the number of passengers from the mainland plummeted from 83.3% to 149 thousand and 200. In January 30th, the number of passengers from the mainland dropped by 92.6%, or 9664.

    Hong Kong Hotel occupancy fell to 20%

    Tourism has always been one of the four pillar industries in Hongkong. The rapid growth of tourism has brought significant support to Hongkong's economy and employment market since the implementation of personal tourism in the mainland in July 2003. In 2016, the economic value added and employment of the tourist industry reached HK $112 billion 400 million and 259 thousand and 800 respectively, accounting for 4.7% and 6.8% of the total economic and labour market.

    Affected by the outbreak of the new crown pneumonia, according to the twenty-first Century economic report, as of February 4th, the 3400 tour groups scheduled to go to the mainland between January 24th and February 29th were cancelled, involving a total of 119 thousand passengers. Hongkong Tourism Industry Council stakeholders told reporters that at present, about 30 travel agencies have canceled the mainland group, the epidemic will no doubt make Hongkong tourism worse. It is still difficult to get out of the predicament before Easter holidays.

    It is understood that at present, Hongkong's two leading travel agencies, Kangtai and Yongan, have announced the cancellation of all the ground tours to February 29th. China Travel Service announced the cancellation of all tours to the mainland from now until February 10th, and the morning tour has been cancelled to the mainland tour group starting in February 15th.

    Due to the sharp decrease in hotel occupancy rate, the major star hotels in Hongkong had to reduce their prices significantly. According to the twenty-first Century economic report, Marco Polo Hong Kong Hotel in the five star hotel in Tsim Sha Tsui, Harbour City, has a room charge of HK $2000 during the summer vacation, but the lowest price is just 762 Hong Kong dollars per night. The price of the guestroom in Hong Kong Island has fallen from about HK $4000 to HK $1600 per night. Hong Kong Ocean Park Marriott big bed room with two breakfast price is only HK $878.

    Yao Sirong, a member of the Hongkong Legislative Council tourism group, told reporters that the number of visitors to Hong Kong has dropped sharply since the second half of last year, which has brought a heavy blow to Hong Kong Hotel and retailing. Before the Spring Festival, the occupancy rate of many hotels was only around 30%. The industry hoped that the situation during the Spring Festival improved. However, affected by the epidemic, the occupancy rate of the whole Spring Festival period was only 20%. Many guests cancelled their booking and the hotel industry suffered a general loss.

    He pointed out that due to the reduction of flights by airlines and restrictions on entry and other factors, the decline of outbound tour groups is expected to continue to expand to more than 60%. Some travel agencies have begun to encourage employees to pay unpaid leave and save money.

    Hongkong's GDP growth rate has dropped for the first time in ten years.

    Data released by the Hongkong Special Administrative Region Statistical Office in February 3rd showed that GDP fell 2.9% in the fourth quarter of last year, down two consecutive quarters. GDP fell 1.2% last year, the first annual decline since 2009.

    In February 3rd, Deng Weishen, an economist at UBS Investment Bank, Greater China and North Asia, said that the GDP growth forecast for Hongkong in 2020 would be reduced to -1.8%. "In order to cope with the new crown pneumonia, the government has adopted a series of measures to reduce cross-border passenger flow. The total number of inbound tourists has dropped by 81% over the same period of the Spring Festival. We expect that the number of passengers in the coming months will be reduced by about 90%, which will bring a heavy blow to retail, hotel, service and other service industries."

    Chen Maobo, the financial secretary of Hongkong, admitted in February 2nd: before the outbreak of the epidemic, the market forecast of different agencies in Hongkong increased from 2% to 4.1%. The median forecast is zero growth. "The risk of this year's economic contraction will be greatly increased by the epidemic. This will also affect the decrease in government revenue and increase in expenditure, which means that the fiscal deficit may rise further."

    According to Ernst & Young's forecast, Hongkong's fiscal deficit will reach HK $70 billion in 2019-2020, equivalent to 2.5% of GDP in 2019, and the first deficit in Hongkong in 15 years.

    Chen Maobo pointed out that the negative impact of Hongkong's economic growth in 2019 and the threat of the epidemic will surely cause a double blow to the economy. In the past half year, the pressure of catering, retail, tourism and consumer industries will fall into a deeper winter.

    Xie Chiu an, chairman of Hongkong Retail Management Association, told reporters in February 4th that during the 2 months of January 24th -2, members of the association generally indicated that retail sales fell by 40%-60%, and retailers who had more dependent on mainland tourists even indicated a drop of more than 60% or even 80%. "These 10 days can be said that the retail industry has entered another super cold winter. We expect similar circumstances in the next one or two months. Many retailers have considered reducing wages and layoffs."

    She said frankly whether there is enough rent reduction for retailers to continue to survive is crucial. "We call on owners to cancel fixed rents and change to a certain percentage of rents, so as to get through the difficulties. Otherwise, we expect that there will be serious closing UPS in the next few months, especially for some small and medium-sized retailers.

    Rescue measures: rent free, tax reduction and subsidy

    As of February 4th, there were 10 confirmed cases in Macao.

    In February 4th, the chief executive of the Macao Special Administrative Region, Mr Ho Yicheng, announced that the gambling industry and related entertainment industry were suspended for half a month. He said that Macao's economy could bear losses at this stage. He Yicheng described the current period as painful, and the economy was definitely affected, because the number of people was greatly reduced. He appealed to the business community to appropriately reduce economic activities, to tide over difficulties and resist epidemic situations in difficult times, because once the outbreak of the outbreak occurs, the business environment will be worse in the future, and the government will increase infrastructure to promote employment and economy.

    In order to hedge against the impact of the epidemic on Macao's economy, Li Weinong, Secretary for economic and financial affairs of the Macao Special Economic Zone, announced that the shopping centres, kiosks, restaurants and commercial establishments that the government departments would rent from February 1st will be rent free for 3 months. At the same time, the government appealed to owners of small and medium-sized enterprises to rent relations to make appropriate adjustments to the rent and to tide over the hardships. Macao residents' cash sharing will also be advanced to April this year.

    In February 2nd, the Macao Association of banks announced that banks were allowed to provide convenience to affected customers on the basis of their own risk tolerance, allowing local loan customers, including individual customers, merchants and company customers, to pay interest only to the local banks, including the individual customers, merchants and company customers, with a maximum period of 6 months.

    Deng Weishen believes that compared with the SARS period in 2003, the Hongkong SAR government has more financial reserves and more room to provide financial support. "It is expected that the government will provide more support, including livelihood, business environment and employment," he said.

    In fact, as the economy of Hongkong entered a cold winter, the SAR government announced the launch of a new round of rescue measures in January 14th, amounting to HK $10 billion 200 million. This is also rarely seen by the government before launching the annual budget in February each year.

    Since last February, the Hong Kong government has launched four rounds of rescue measures in succession, with a total value of HK $68 billion. The main measures include wide salary reduction tax, personal income tax and profits tax, waiver of government fees for 12 months, subsidies to transportation and tourism industries.

     

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