Hong Kong’s free tickets will spur tourism recovery

Until recently, Hong Kong had some of the world's toughest rules as it followed China's ‘zero-Covid-19’ policies.

Hong Kong has said it will give away 500,000 airline tickets, worth HK$2bn ($254.8m), in an attempt to boost its tourism industry, which was impacted severely by the pandemic.

The free tickets, which were bought to support Hong Kong’s airlines during the pandemic, will be distributed next year to inbound and outbound travellers by the city’s airport authority.

The Chinese market is key for Hong Kong’s recovery

According to GlobalData’s Demands and Flows Database, prior to the effects of the pandemic in 2019, Hong Kong saw the arrival of 23.75 million international travellers.

However, following the restrictions imposed as a reaction to Covid-19, this number fell considerably, to 1.36 million travellers in 2020, and fell further to just 85,944 travellers in 2021. Of these travellers, Chinese arrivals accounted for 68.42% in 2019, 65.75% in 2020, and 61.36% is 2021.

This shows that the Chinese source market for Hong Kong is of paramount importance when planning a recovery strategy. This also shows that, due to the measures and restrictions put in place to combat Covid-19 by both Hong Kong and China, visitation has fallen disproportionately when comparing Chinese travellers to the rest of the world.

This is potentially due to other countries’ lighter restrictions making them more appealing to those Chinese tourists that are travelling. Therefore, this free air ticket initiative could be the boost that Hong Kong’s tourism industry needs through making the destination more fiscally attractive.

Ease of access can affect travel flows

Until recently, Hong Kong had some of the world’s toughest rules as it followed China’s ‘zero-Covid-19’ policies. After being effectively closed for the past 30 months, 26 September 2022 saw the Hong Kong Government stating it would no longer require people arriving in the city to go into hotel quarantine or show a negative PCR test before boarding flights to Hong Kong.

Instead, travellers to the area now have to monitor themselves for possible infection for three days after arriving in Hong Kong. The government has not yet committed to a road map or timetable for a full reopening of the city, which many are asking for, considering that most of the world’s tourism industry has begun to recover due to reduced or removed restrictions.

The airport authority will finalise the arrangement with airline companies once the government announces the removal all Covid-19 restrictions for inbound travellers. Following this, the Hong Kong Tourism Board will launch advertising campaigns for the free air tickets.

Airlines serving Hong Kong have been struggling to recover flight schedules. For example, Cathay Pacific expecting to run just a third of its pre-pandemic passenger capacity by the end of this year.

The pre-pandemic status of Hong Kong represents the potential of a full recovery, however, this is highly dependent on when mainland Chinese tourists will return, as mainland China contributes to more than half of Hong Kong’s inbound arrivals and travel receipts.