With anti-pandemic measures gradually relaxed or even scrapped, Hong Kong has fully reopened her borders. It is expected to give many industries a much needed boost and put us on the road to full-scale recovery.
Annie Tse: Multi-pronged Approach to Revive Retail; Cautiously Optimistic about Post-Covid Normalcy
Three years of COVID-19 had crippling impact on Hong Kong's retail industry. Annie Tse, Chairman of the Hong Kong Retail Management Association (HKRMA), says retailers leveraging tourism have taken the biggest blow. However, business is gradually improving for retail shops now that Hong Kong has reopened her borders with the mainland.
Tse adds, “At the moment we are seeing acceptable footfall in popular tourist districts. HKRMA interviewed some members earlier and the general view was that it would take at least nine months for the overall retail landscape to regain momentum.”
Consumption Voucher Scheme a good stimulus
As for retailers serving mainly local consumers, Tse says the worst time is over and the market is slowly recovering. “With the long public holidays over Ching Ming Festival and Easter coming up in early April, we expect more local consumers to take overseas trips.”
However, crisis and opportunity always go glove in hand. Tse is pleased that the Financial Secretary announced a new round of the Consumption Voucher Scheme in the latest Budget, which will be complemented by the Hong Kong Tourism Board's Visitor Consumption Voucher Scheme. These incentives are expected to drive spending of both domestic and overseas consumers to benefit the retail industry.
Re-launching retail and attracting new blood
According to Tse, manpower crunch is one of the biggest challenges on the trade's road to recovery. “In fact, many chain stores are facing manpower shortage even though they have closed outlets in certain districts. As the economy rebounds, the situation will deteriorate when retailers re-open all their shops.”
“Many retail workers chose to change professions in the past three years. These lost hands might not want to take up their old jobs.” Tse believes the retail trade should re-engineer its image. Aided by active promotion by the government, it can attract more young people to the retail trade to fill the manpower gap.
Tse continues to say that the Guangdong-Hong Kong-Macao Greater Bay Area one-hour living circle can expediate the flow of people within the area. She hopes the authorities can provide assistance to Greater Bay Area workers interested in joining Hong Kong's retail sector. Many of them can speak Cantonese and can quite easily adapt to working as retail sales representatives in Hong Kong.
Rolling out events to boost consumer sentiment
This year marks the 40th anniversary of HKRMA. Tse reveals that the association is launching a series of events to support the retail industry's progressive recovery and provide vitality and momentum.
Tse says as we step out of the pandemic, HKRMA is planning a shopping week campaign in July which will coincide with the second phase of government's Consumption Voucher Scheme. She hopes the program will encourage people to go out shopping and attract more visitors from the mainland and abroad to spend in Hong Kong.
Simon Wong: Hoping to See Government Support Measures to Accelerate Recovery of Various sectors
The local catering industry has been hard hit by three years of COVID-19. Simon Wong, President of Hong Kong Federation of Restaurants and Related Trades, points out that restaurants relying mainly on tourists have borne the brunt of the pandemic, and the complete reopening of borders is expected to bring new hope to the sector.
Mainland tourists are main recovery drivers for the catering industry
“Judging by data available after border reopening, there is still a long way to go before business returns to normal.” Some members of the sector estimate that boom times seen in the past will not return until the end of this year or the beginning of next year, but Wong believes the number of Mainland tourists visiting Hong Kong will continue to rise from the middle of this year. Business will return to pre-COVID levels for the catering industry.
Wong welcomes the government's timely action in launching support measures to drive post-pandemic recovery. Externally, Hong Kong will offer free air tickets and tourist consumption vouchers to attract more overseas visitors to Hong Kong. Locally, there is the consumption voucher scheme which is expected to benefit the catering industry.
Manpower crunch and high rents affect recovery progress
Wong admits the catering industry still faces many operational challenges, and manpower shortage is the biggest problem. To make ends meet during the pandemic, many restaurant workers chose to change careers. At present, the overall number of catering workers in Hong Kong is about 200,000, much lower than 300,000 recorded at peak times. When business returns to normal and the demand for local catering services increase significantly, it would be difficult to cope with such a small workforce. “It was reported earlier that a hotel was unable to provide necessary service to a Mainland tour group that arrived in Hong Kong. Eventually, the whole group had to go back to Shenzhen for the night. Likewise, manpower shortage in the catering industry might affect service quality.”
Wong points out that high rents pose another major operational challenge. As the market recovers, many landlords are considering rent increases. “Rent rises at this particular time is a huge burden for us.” He hopes all sectors of the society can support each other. For example, owners of large shopping malls and commercial buildings can delay rent increases until the economy has fully recovered.
Government measures anticipated to address manpower shortage
Wong says many companies have laid off staff or cut wages to survive, which has dampened spending desires of wage earners. In addition, after extended stay-home periods during COVID-19, many people in Hong Kong have become accustomed to preparing their own meals, which has slowed down recovery for the catering industry. With the launch of a new consumption voucher scheme, Wong hopes it will motivate more spending and dining and in turn benefit the sector.
According to Wong, the catering sector is still some distance away from full recovery. He suggests the government to consider further measures to help restaurants speed up recovery, such as providing subsidies for small and medium-sized restaurants to leverage new technology to replace manpower or streamline processes. The government can also consider attracting workers from the Mainland and abroad to alleviate the manpower crunch, with a view to moving towards full recovery as soon as possible.
Fanny Yeung: Make Good Preparations As Travel Industry Takes Its Time to Recover
Hong Kong has lifted many anti-pandemic travel restrictions. According to Fanny Yeung, Executive Director of the Travel Industry Council of Hong Kong (TIC), daily inbound arrivals have increased to more than 90,000 in March. In addition to continuous growth in arrival numbers, Hong Kong residents making overseas trips are also on the rise.
Yeung admits that the number of arrivals is way below pre-COVID levels. Similarly, outbound traffic is restricted by flight availability and high air ticket prices. To retailers, current business turnover is not sufficient to support full recovery across the board.
Government low-interest loans a timely relief
Nevertheless, Yeung believes business prospects of the travel industry will gradually improve as overseas arrivals steadily increase, although recovery might take longer than other sectors. For example, in Japan and Thailand where life returned to normal in the second quarter last year, tourist figures have not reached pre-COVID levels in almost a year. Evidently, tourism in Hong Kong still has to go through a rough patch in the near future.
“Many travel service operators understand that recovery does not happen overnight. The right thing to do now is to treat the original operation as a new business and be prepared not to see any profit for quite a while.” Yeung adds that the government is offering 100% guarantee loans. Borrowers are only required to repay interests for the first year and repay the principals over ten years subsequently. This scheme is a timely lifesaver for the travel industry that requires significant capital input.
Filling the manpower gap is top priority
Meanwhile, the travel industry is in a quagmire of serious manpower shortage. Yeung indicates that many travel workers have changed jobs in the last three years. Even if some of them are willing to rejoin the market, employers cannot offer competitive wages because currently business still falls short of pre-COVID levels. Manpower shortage will therefore remain a highly challenging issue.
“To attract more quality visitors, the trade must first address the manpower issue. Only then can they enhance service quality and develop more diverse tourist products. However, talents are reluctant to take up jobs because business recovery takes time and companies are unable to raise pay packages at this moment.” Yeung hopes the government can mull more short-term support measures to accelerate recovery by offering some subsidies for staff remuneration.
Tourism resource matching platform
To support the progressive recovery of Hong Kong's travel industry, TIC launched the tourism resource platform “GreaterGo”. Yeung explains this is mainly a platform for sharing travel information, event promotion and business matching for members of the trade.
For example, overseas travel agents organizing group tours to Hong Kong can connect with Hong Kong peers through the platform to help arrange itinerary. “We hope members of the trade will make best use of the ‛GreaterGo' platform to strengthen their ties with industry peers in ‛Belt and Road' regions and the Greater Bay Area, so as to further expand overseas markets and operations, as well as seizing the development opportunities created by tourism recovery.”
