Chinese tourists are rapidly deserting Hong Kong, leaving retailers who built businesses around once insatiable demand from mainland neighbors with bigger but emptier stores and squeezing the whole city's visitor-dependent economy.
With cross-border tensions exacerbated by pro-democracy Hong Kong protests, tour groups visiting Hong Kong from China plunged about 80 percent in early March. A Beijing crackdown on conspicuous spending by mainlanders also shows no signs of letting up, sending tourists further afield.
While daytrippers from just outside Hong Kong continue to buy daily essentials there, Chinese travelers with cash to burn are homing in on places like South Korea and Japan. According to the Japan National Tourism Organization, Chinese visitors lured by the weaker yen and easier visa rules nearly tripled in February to a monthly record: With one in four tourists in Japan, Chinese became the biggest visitor group in a country with which relations have often been fraught.
That's bad news for Hong Kong retailers like Chow Tai Fook Jewellery and cosmetics chain Sa Sa International Holdings Ltd. To the chagrin of some Hong Kongers, these firms expanded networks in the former British colony by about 50 percent over the past five years to cater to then-surging demand from Chinese tourists.