Tourists From Chinese Mainland Rose To 28 Million In 2011, 67% Of Total
From waiting in hours-long lines to stock up on luxury goods to causing controversies at the Dolce & Gabbana flagship in Tsim Sha Tsui to making a rental-space bidding war break out between Abercrombie & Fitch and Shanghai Tang, the effects of more visits (and more spending) by mainland Chinese in Hong Kong are being felt throughout the city’s retail landscape. Last year, 28 million mainland Chinese visited the former British colony, a 24 percent rise over 2010, accounting for 67 percent of all tourists visiting the city and helping spending by visitors rise 21 percent to HK$253 billion (US$33 billion), according to the Hong Kong Tourism Board. Drawn by factors — covered regularly by Jing Daily — that include duty-free shopping and greater prestige, spending by mainland Chinese tourists has led virtually every brand (from mass-market to luxury) around the world to rush into the city, causing rents to skyrocket. According to London-based Savills, rents in Hong Kong have risen for seven of the past eight years, due primarily to growing Chinese spending and the resulting war for prime retail space.
This week, Bloomberg looks at the spiraling prices in Hong Kong, where ground-floor rents rose an average of 5.23 percent in the first quarter of the year and are expected to rise a further 12 percent in the next 12 months and where tenants “have little bargaining power.”