As global travel and tourism braces for a long slump, can Hong Kong overcome this existential challenge?

With no quick recovery in sight, Hong Kong’s massive hospitality sector is in peril. Economies with a big domestic tourism sector can hope for some respite – but will Hong Kong roll out the welcome mat for mainlanders?

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A woman wearing a face mask and traditional Chinese clothing visits Gubei Water Town on the first day of the five-day Labour Day holiday, on the outskirts of Beijing, on May 1. Domestic tourism offers opportunities for economies in recovery. Photo: Reuters

Published: 6:30am, 9 May 2020Updated: 6:54am, 9 May 2020

International tourism as we know it has disappeared, and that will be the case for the coming six months – maybe a year. With it have gone millions of jobs worldwide, thousands of companies, and billions in earnings spread across almost every segment of our economies.

What is plain in Hong Kong, as the daily influx of 200,000 mainland tourists has dwindled to a dribble, is just as evident worldwide. While big economies such as the United States are expected to lose the most in dollar terms (according to the World Travel and Tourism Council about US$214 billion this year), the biggest casualties are actually small island economies such as the British Virgin Islands, which get 92 per cent of its gross domestic product from tourism, and the Maldives (75 per cent) and Seychelles (64 per cent).

Other larger Asian casualties in dollar terms include Thailand, which earned about US$63 billion from tourism in 2018, or about 22 per cent of its GDP – but its economy is expected to fall by 6.7 per cent this year as tourism crashes.

But again, it is our smaller Asian economies that look likely to be hardest hit: Macau’s mainland-driven gambling business earned over US$40 billion in 2018, accounting for almost 59 per cent of its GDP, but has reported a 97 per cent revenue drop this year. Even Hong Kong, which the United Nations World Tourism Organisation says earns US$36.8 billion directly from tourism, is set to be a big casualty.

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With over 270,000 deaths from the pandemic and the early, innocent expectations of a quick V-shaped recovery long forgotten, governments worldwide have grimly recognised that the travel and tourism sector, and all the trade fairs, restaurants, hotels and retail shops that are driven by it, are looking deep into 2021 before any kind of recovery is possible.

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