Golden Week Loses Its Shine for Hong Kong

Hong Kong, China
Image Source | Getty Images
Hong Kong, China

"This might be a good week to stay off the streets", I quipped today on my show "The Call" to Emily Chan, my Hong Kong colleague and co-host. "The city may be crowded."

We're in the midst of yet another Chinese "Golden Week," the weeklong holidays that are peculiar to the mainland China. Three times a year, during Lunar New Year, this time of year, and the National Day holidays in October, a wide swath of the country essentially shuts down as people venture around the nation and beyond.

(Read More: Li Ka-Shing Sounds Warning Over Volatile Hong Kong Property)

But this time, I might find it less claustrophobic getting out and about. Hong Kong's hopes for a windfall from tourists may be waning. The Travel Industry Council says the number of tour groups is down around 15 percent from last year to around 1200 junket bookings. And spending is falling too. The Retail Management Association says sales volume per person is down, citing more visitors from smaller cities in China, who tend to splurge less. The Federation of Hong Kong Hotel Owners corroborates the trend, saying many of their member hotels have had to cut rates by 10 percent this year to try to lure guests.

Chinese visitors may be hesitant to come here after seeing bad press during the Lunar New Year holidays in February. Local television news, which is widely available in a large part of China, was filled with stories of crooked tour operators who short-changed tour groups by herding them into shopping malls and pressuring them to buy things. One story highlighted the plight of one particular group who had to sleep on the tour bus after the operator failed to confirm accommodation for them. Another drag on the industry is premature visits by mainlanders a couple weeks ago during the gold price meltdown to snap up cheaper bullion. Gold, true to its name, is typically a big purchase item for Golden Week visitors. Stephen Chan, owner of Perfect Jewellery, told the South China Morning Post that business had dwindled after the initial gold rush sparked by prices sinking to a 2 year low.

(Read More: Chinese Give Luxury Goods a Pass, Go on Holiday Instead)

Chinese tourists are also showing signs of feature fatigue. Manpreet Gill, Sr. Investment Strategist with Standard Chartered Bank told me the issue is new attractions, "in Hong Kong one of the biggest challenges is coming up with new reasons to draw in the tourists."

I know what he means. After a visit to The Peak, Ocean Park, Disneyland, roaming around the older parts of Hong Kong, be it Wanchai, Kennedy Town, or Kowloon City, and maybe a visit to the Temple Street night market, maybe a horse race or two at The Jockey Club, we start looking a little light on the funfare. Macau has the casinos so they have that pull. Singapore them too, along with Universal Studios and a very nice Sentosa complex; the Night Safari is always a rush. Tourism will never go away in Hong Kong, but to expect year after year after year of straight up expansion is probably a fantasy.

(Read More: Record-Breaking Imperial Chinese Bowl Shines at Hong Kong Sale)

But not to worry. If I don't feel I have to avoid the crowds, I'll be out shopping and holding up the consumer space, along with the other 7.2 million people here.