Mainland tourists boost Hong Kong retail

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Hong Kong's downtown retail sales declined for the fifth month in a row in July, but the rate of decline slowed as a surge in tourist arrivals from China helped offset the downward trend in domestic spending

Hong Kong is highly dependent on tourists who account for 20% of sales in its entire retail sector.

According to figures just released by the Hong Kong Census and Statistics Department, the value of retail sales fell 4% year-to-year to HK$15bn ($1.9bn) in July 2002, while in volume terms sales dropped 2.8%.  Local retailers have been struggling for more than a year as an economic slump forced shoppers to become price sensitive. Luxury goods spending suffered most in July dropping by almost 20%, and the drop in sales came despite the Hong Kong Tourism Board's HSBC Mega Sale promotion launched in June (TRW 19/06/02).

Total visitor arrivals rose 16.5% in July from a year earlier to 1.37m, according to the Hong Kong Tourism Board (HKTB). They grew just 6% in June. China was the biggest contributor, with mainland tourists up 41.3% to 565,322 visitors - mostly travelling in tour groups. This has contributed to the crush at immigration checkpoints on the city's border with China. Last month thousands of returning Hong Kong citizens and Chinese tourists nearly rioted after queueing for hours to enter Hong Kong.