HONG KONG, Oct 3 – Hong Kong’s pro-democracy protests may have cost the city’s retailers more than $2bn Hong Kong dollars (£175.7m), ANZ bank estimates. The demonstrations have coincided with mainland China’s Golden week holiday, which usually prompts a huge influx of shoppers from the mainland. Chinese tourists account for two-thirds of all visitors to Hong Kong. But China suspended travel permits for domestic tour groups looking to visit Hong Kong because of the protests. The China National Tourism Administration told travel agencies on Monday to stop organising Hong Kong-bound tours until further notice.
Closures, The decision doesn’t affect tours that have already been sold, but nonetheless, there are concerns the move will lead to a further dip in business. Hong Kong retailers located near the protest sites such as Causeway Bay and Mong Kok have had to close stores because of the unrest. Some restaurants and bars are also said to be suffering from slower business and closing early. “Sales of luxury goods, cosmetic products, and consumer durables are definitely hard hit,” Raymond Yeung, senior economist at ANZ wrote in a report.
“However, the top line of convenience stores and supermarkets likely hold up. The launch of a new smartphone also offers some additional support in October. We cannot label domestic consumption as having collapsed.” Luxury, Hundreds of thousands of Mainland Chinese typically travel to Hong Kong during their “Golden Week” holiday, which starts on Oct 1. Mainland group tours account for up to 10% of Chinese visitors to the city, according to Hong Kong’s Travel Industry Council. They flock to the city’s luxury goods stores, such as Louis Vuitton and Fendi, and are the main cause of the city’s spike in retail sales.
Hong Kong’s tourism industry is worth more than $38bn and accounted for about 3.9% of Hong Kong’s gross domestic product in 2012. However, that is expected to take a hit after thousands of protestors took over the heart of the city demanding more democratic powers. The US, UK, Canada, France, Italy, Germany and Australia have also issued travel warnings to their citizens travelling to Hong Kong, telling them to avoid the protest areas.