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Wednesday, May 18, 2022

Commentary: Are Hong Kong protests taking a toll on the city’s businesses

The ongoing protests have affected Hong Kong’s stability, economy and how companies and workers operate.

Although Hong Kong is still considered a safe destination for those who live in the city, the escalating security situation has seen countries such as Singapore and the US issue travel warnings. 

Media reports indicate that domestic airline Cathay Pacific Airways – which controls half of all take-off and landing slots at the Hong Kong International Airport – saw passenger numbers fall 7 per cent in October. It has since reduced capacity due to the escalations.

On the other hand, other airlines recently reported that passenger levels have returned to pre-protest levels, including US-based carrier United Airlines, which recently launched its second daily flight from San Francisco to the city. 

FILE PHOTO:  A Cathay Pacific flight flies over the city of Hong Kong
FILE PHOTO: A Cathay Pacific flight flies over the city of Hong Kong, China on Sep 6, 2019. (Photo: Reuters/Amr Abdallah Dalsh)

However, with protests growing increasingly violent, several Asian airlines have since cut flights to Hong Kong. 

As of November, Garuda Indonesia adjusted its flight frequency from Jakarta to Hong Kong from 14 flights to two flights per week, while AirAsia decreased the number of flights coming into the city from Kuala Lumpur and Kota Kinabalu for December and January.

Other airlines have also followed suit, reporting a challenging and uncertain business outlook.

Hotel bookings remain depressed, with occupancy rates down in tandem with the drop in visitor arrivals in July. This extends to four- and five-star accommodations normally frequented by business travellers. 

Demand for other services such as transport, food and beverage and tourist activities have been hit as a consequence. 

Transportation disruptions are commonplace, and some shopping centres and other businesses close early when the unrest worsens. 

Inevitably, the tourism sector has been affected, with the city’s tourist arrivals plummeting by nearly 50 per cent in October, which in part led to Hong Kong’s current technical recession. 

The recession is Hong Kong’s first in a decade, with the economy shrinking by 3.2 per cent in July to September from the previous quarter.

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