"Hermes Replaced by McDonald's" Changing Chinese Tourists... Hong Kong Tourism Industry Flustered

"Showing off Hermes handbag in past SNS photos"
"These days, photos holding McDonald's bags are popular"

As travel and consumption patterns of Chinese tourists change, Hong Kong's tourism industry is reportedly taking a hit. In the past, Chinese tourists were known as major luxury goods buyers, but as China's economic growth slows, their tourism patterns have shifted to reduced luxury consumption and more sightseeing, according to analysis.

'Special Boost from Chinese Tourists' Expected by Hong Kong

According to Bloomberg on the 13th, Hong Kong had high hopes for a surge in visitors from mainland China during the eight-day National Day Golden Week holiday (September 29 to October 6) earlier this month.

However, the number of mainland Chinese visitors to Hong Kong during this National Day holiday was recorded at 970,000, which is significantly fewer than the 1.5 million Hong Kong residents who traveled abroad during the same period. Furthermore, most Chinese tourists visiting Hong Kong took day trips.

As a result, Hong Kong's accommodation and food service revenues did not increase as much as expected. Instead, many Hong Kong residents traveled to nearby Shenzhen in China, benefiting Shenzhen's tourism industry with a 'Hong Kong resident boom.'

Chinese Tourists Not Buying Luxury Goods... "Hong Kong Tourism Industry Hit"

[Image source=Pixabay]

In the past, Hong Kong was perceived by Chinese tourists as a 'shopping paradise' where luxury goods could be purchased cheaply. However, after the COVID-19 pandemic, Hainan's duty-free shops became more competitive, and Chinese tourists, facing high exchange rates, no longer felt the need to shop in Hong Kong. In fact, Hainan's duty-free sales increased about 11 times over six years, from $840 million in 2015 to $9.47 billion in 2021.

Additionally, the slowdown in China's economy has led Chinese consumers to tighten their wallets. A representative from a Hong Kong real estate consulting firm said, "Retail sales in Hong Kong during the Golden Week holiday were similar to those on regular weekends," adding, "Although store visitors increased by 20-30%, it did not translate into sales."

Bloomberg explained that Chinese tourists are showing different travel patterns compared to the past. Since COVID-19, Chinese tourists visiting Hong Kong have favored taking photos at locations featured in Hong Kong movies or scenic spots rather than purchasing luxury goods.

Bloomberg stated, "Mainland Chinese tourists choosing McDonald's over Herm?s are impacting Hong Kong's tourism industry," and explained, "In the past, Chinese tourists flaunted Herm?s handbags at Hong Kong shopping malls for social media photos, but nowadays, the most popular social media posts related to Hong Kong tourism show photos holding McDonald's takeout bags on Hong Kong streets."

According to Hong Kong government data, luxury goods sales in August, including jewelry and watches, amounted to HKD 5.2 billion (approximately 897.2 billion KRW), a 31% decrease compared to the same month in 2018 before COVID-19.

As Chinese Tourists Change, World's No.1 Luxury Company LVMH Also Sees Growth Slowdown

On the 2nd, Chinese group tourists are enjoying shopping at the Lotte Duty Free World Tower store in Songpa-gu, Seoul. [Image source=Yonhap News]

France's Louis Vuitton Mo?t Hennessy (LVMH), the world's leading luxury company, also reported third-quarter (July-September) results below market expectations. The main reason for LVMH's slowed growth is the decline in luxury consumption in China, its key market.

According to The Wall Street Journal (WSJ), before the COVID-19 pandemic in 2019, China accounted for one-third of global luxury market consumption. However, last year, its share dropped to around 17-19%.

Last year's third quarter saw LVMH's sales in China increase by 40% compared to the third quarter of 2020, raising hopes for a rebound in Chinese luxury consumption. However, as concerns about an economic downturn in China grew, consumers again reduced their luxury spending. Jean-Jacques Guiony, LVMH's Chief Financial Officer (CFO), told WSJ in an interview, "We expected strong sales in China during the long 'eight-day Golden Week' holiday that included the Mid-Autumn Festival and National Day, but the results were not as expected."

This content was produced with the assistance of AI translation services.