Damien Green

Opinion | Hong Kong’s small but colourful businesses can lead tourism recovery

Big shift from luxury tourism means glitzy retail outlets in prestigious locations simply won’t deliver the tourist dollars they once did

Reading Time:4 minutes

Why you can trust SCMP

Damien Green

Published: 5:30am, 24 Jun 2024Updated: 4:44pm, 25 Jun 2024

To start winning again in tourism, Hong Kong needs to face a new normal in which lower-cost business models have the advantage in attracting leisure travellers. A heavier emphasis on business travel, as opposed to luxury travel, may yield better results for the city too.

The big shift away from luxury tourism is a trend that our city’s prevailing high-cost business models are not geared to profitably harness.

Specifically, luxury retail outlets in prestigious locations are simply not going to deliver the sustained economic benefit they once did. This is not a declaration that the luxury travel segment is over in Hong Kong. It remains important – but it’s increasingly apparent that the city cannot rely on luxury the way it used to.

Fortunately, Hong Kong has the economic foundations in place to foster a thriving parallel low-cost tourism ecosystem, represented by its 362,000 small to medium-sized enterprises (SMEs).

SMEs have been identified as “an important driving force in Hong Kong’s economic development” by the city’s Trade and Industry Department for good reason. Today, the segment represents 45 per cent of private-sector employment in the city and accounts for 99 per cent of all its businesses.

Importantly, in terms of physical distribution and cultural authenticity, Hong Kong SMEs span every corner of the city, from the tourism hotspots to the bustling neighbourhoods.