By Donny Kwok
HONG KONG (Reuters) – The impact of the novel coronavirus on Hong Kong’s tourism sector is unprecedented and the city can hope to start seeing things returning to normal by July, in part by trying to develop new markets, the head of the tourism board told Reuters.
The coronavirus crisis has paralysed the global financial hub’s economy, which was already reeling from months of anti-government protests, with travel restrictions to curb the spread of infection grinding tourism to a halt.
Dane Cheng, executive director of the Hong Kong Tourism Board, said it would focus on boosting local consumer spending and promoting the city to new markets such as India and Vietnam and to Muslim tourists.
“The best we can hope for would be in June, July,” Cheng said in an interview on Wednesday evening.
“By that time, you could see things resume to normal. The border of Hong Kong reopening, air services resuming, that is the time for us to move on and start our recovery plan.”
The tourism sector accounts for about 4.5% of Hong Kong’s gross domestic product and employs around 260,000 people.
Cheng was speaking hours before the government announced relief measures worth HK$137.5 billion ($17.7 billion) to help businesses and people crippled by the coronavirus outbreak to stay on their feet.
In a bid to stamp out the disease COVID-19 caused by the virus, Hong Kong leader Carrie Lam has already imposed tough restrictions, including banning all tourist arrivals and prohibiting gatherings of more than four people.
The city’s tourist arrivals plunged 96.4% year-on-year in February to 199,123 visitors, the latest data shows, compared with a 52.7% year-on-year drop in January. The number of mainland visitors fell 97.8% year-on-year in February to 98,804.
“This is something we have never seen before,” Cheng said.
The drop in tourism helped to send retail sales plunging by a record 44% in February from a year earlier. Sales of jewellery, watches, clocks and valuable gifts, which rely heavily on mainland tourists, plunged 78.5% year-on-year in February, compared with a 41.5% drop in January, underscoring the depth of the demand destruction.
“We have experience of ups and downs in Hong Kong during different crises. Obviously this one is the most severe that we have ever encountered,” Cheng said.
“I would say that survival is important but let’s have faith.”
(Corrects to remove reference to mainland visitors in third paragraph.)
(Reporting by Donny Kwok; Editing by Anne Marie Roantree and Tom Hogue)