'Golden era' for Hong Kong retail is over as Chinese tourists continue to tighten their purse strings

Hong Kong's retail sector has languished since the pandemic and analysts say it could be years before it bounces back.

The city's retail sales have plunged 7.3% in the first seven months of the year compared with 2023, according to government data published Friday. That's despite a massive 52.2% rebound in visitor arrivals during the period.

The city was once lauded as a shopping paradise, particularly for mainland Chinese tourists, often seen exiting luxury stores with multiple bags in hand. Mainland China accounted for nearly 90% of the 22.16 billion Hong Kong dollars ($2.84 billion) spent by same-day visitors and 67% of the HK$119.1 billion spent by overnight visitors in 2023.

But analysts said the golden days will not return "for a long, long time" as mainland Chinese tighten their purse strings under the cloud of economic uncertainty.

"The reduced spending of middle class Chinese tourists in Hong Kong can be attributed to the economic slowdown — started by the property downturn, shift in consumption patterns, increased focus on savings due to challenging employment prospects and changing travel preferences," said Christine Li, head of research for Asia-Pacific at Knight Frank.

In 2023, overnight tourists from the mainland spent 6,495 Hong Kong dollars ($833) per capita, rising 8.4% from 2019 levels. But same-day mainland Chinese visitor spending fell 37% to just HK$1,383 in 2023.

"Post-Covid, mainland Chinese consumers are prioritizing experiences over material goods, driven by a desire to reconnect, make up for lost time, and live in the moment," Li said. "This shift in values has led to weaker sales in high-end luxury sales, particularly noticeable in Chinese consumer spending."

Concerns about the economic situation on