Hong Kong tourism in distress: retail and hotel bosses try to go digital

Hong Kong Television Network’s HKTVmall is thriving and expecting an unaudited profit of at least HK$90 million (US$11.6 million) for January to June – its first time in the black, after chalking up accumulated losses of HK$1.7 billion since 2015.

Business boomed as stay-at-home Hongkongers switched to buying more online. It hired more than 260 full-timers since March, and started recruiting close to 200 more from May.

Run by entrepreneur Ricky Wong Wai-kay, the online mall is a rare bright spot in Hong Kong’s ravaged tourism, retail, and food and drink scene. Already hurt by last year’s anti-government protests, the sector has been devastated as the Covid-19 pandemic halted international air travels, keeping visitors away.

From tour agencies to hotels, shops and restaurants, 2020 is proving a struggle to reinvent their businesses, go online or risk going bust.

Online baking classes, anyone?

In June, the Hong Kong Tourism Board launched a “Holiday at Home” campaign, offering more than 10,000 deals online for dining, shopping and entertainment.

Change was forced on the Taiwan Good Travel Company, which previously thrived on taking groups of visitors around Hong Kong or leading tours abroad. At peak periods, its three full-time staff plus about 10 freelance guides ran more than 100 coach trips a month.

After travels ended abruptly, it switched in late June to offering tours designed for locals, and hosted about 400 people in 10 groups until Covid-19 cases surged again in mid-July.

One of its packages included a visit to a mask factory and a tour to take in the architecture around Tai Kwun, the arts centre in Central that used to be a police station. The fee of HK$98 per person included a meal.

Race to sell more online

The retail sector has seen a scramble to downsize physical operations and move towards e-commerce, as sales slumped by 33.3 per cent to HK$160.8 billion in the first half of this year.

Hong Kong Retail Management Association chairwoman Annie Tse Yau On-yee said online sales did not come close to making up for massive losses, but added: “Everyone wants to develop technologically, hoping for a breakthrough.”

Staycations don’t make up for losses

The collapse of tourism in 2020 has seen Hong Kong hotel occupancy dive from as high as 90 per cent last year to below 40 per cent this year.

With no end in sight to the pandemic, Hong Kong’s battered hotels remain in bad shape, with hotel groups already reporting massive losses for the first half of 2020.

Brian King, associate dean of the school of hospitality and tourism management at Polytechnic University, said staycations could not replace the more lucrative earnings from business travellers, conferences and wedding banquets.

There was simply no way Hongkongers could make up for mainland tourists, who made nearly 44 million trips to Hong Kong last year and represented nearly four out of five visitors overall.