Hong Kong retailers typically wait with anticipation for Chinese vacation periods, when mainland citizens flood into the city to take advantage of significantly lower taxes on imported goods. However, as statistics come out about China’s May 1 to May 3 holiday, it appears that Hong Kong lost out to Macau as more Chinese tourists headed to the world’s top gambling location.
Lasting only three days, China’s “mini Golden Week” vacation period isn’t long enough for travelers to venture great distances, meaning nearby locations like Hong Kong and Macau compete to become a chosen destination for tourists who don’t want to join massive crowds at the Forbidden City or Great Wall.
Hong Kong saw a decidedly lackluster holiday period this year, with a 2 percent drop in the number of mainland tourists compared to last year. This marks the first time since 2005 that their numbers have declined, and the slump may be related to growing tensions between Hong Kong residents and mainland visitors that have boiled over in recent months. Hong Kongers have been increasingly prone to protest against Chinese tourists: in February, a group of around 100 angry Hong Kong residents descended upon the luxury Tsim Tsa Tsui shopping district to harass Chinese visitors, calling them the derogatory term “locusts” and getting into scuffles with police.
According to Kyodo News International the protests were an extreme example of ongoing frustrations with Chinese tourists among many Hong Kong residents:
The protesters claim that the massive influx of mainland visitors is affecting daily life by increasing congestion of public transportation, thinning supplies of daily necessities such as baby milk powder and raising property prices as rich Chinese investors have favored Hong Kong real estate.
In contrast to Hong Kong’s slowdown, Macau’s growing number of options for mass-market visitors led to a 20.3 percent year-on-year increase in the number of tourists over the holiday period. According to Cameron McKnight and Rich Cummings from investment bank Wells Fargo & Co in a statement to Macau Business Daily published today, “Our channel checks suggest May Golden Week is off to a very strong start, with record mass market crowds in Macau over the past four days. Even our most skeptical contacts in Macau are surprised at the crowds they’ve seen this week.”
Aware of the fierce global competition for Chinese tourist revenue, Hong Kong’s government has condemned residents’ anti-mainland behavior. Secretary for Commerce and Economic Development Gregory So stated, “The harassment of the tourists…is very regrettable and we strongly condemn this sort of action.” If slumping visitor numbers continue, the Hong Kong government will likely feel the need to take concrete actions to smooth tensions and make the city more welcoming to mainlanders—or risk losing more Chinese tourist revenue to eager neighbors.