The social unrest which blocked airport and roads spooked tourists.
Visitor arrivals in Hong Kong continued to shrink, plunging by nearly 40% in August, Financial Secretary Paul Chan wrote in his blog post. This represents the biggest YoY decline in numbers since May 2003 when the SARS outbreak hit the city and arrivals sank 70%.
“Social issues in the past few months, especially the continued violent clashes and blockading of airport and roads, have seriously impacted Hong Kong’s international image as a safe city,” Chan said in his post, which was written in traditional Chinese.
The city’s tourism, retail and hotel industries have been particularly hard hit, Chan said, with occupancy rates of hotels in some districts dropping by more than half and room rates decreasing 40% to 70%.
Retail sales by value dropped 11.4% in July, the first full month affected by the protests, while sentiment among small businesses has hit record lows. Hong Kong’s economy overall contracted 0.4% in Q2, raising the prospect of a technical recession.
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