Retailers in Hong Kong preparing to welcome Chinese mainland tourists over the Lunar New Year festive period face a real crisis: Canny shoppers don't think the special administrative region is cool enough.
HSBC's global co-head of consumer and retail research, Erwan Rambourg, said luxury goods are now cheaper in other markets, bringing the wealthy, sophisticated Chinese travelers to places such as Japan, Korea, and Australia.
"There were a lot of attractions in Hong Kong for mainlanders to come in and purchase here," Rambourg told CNBC's "Squawk Box". "It used to be cheaper than a lot of other places in the region. That's not the case anymore, given the strength of the Hong Kong dollar."
The Hong Kong dollar is pegged to the U.S. dollar, which implies if the latter strengthens, the former follows.