The Arabs are coming with money and tourism

Mark Pinkstone/Former Chief Information Officer of HK government

Hong Kong has done it again, this time in the Arab world where it has been deemed the “Most Promising Muslim-Friendly Destination for the Year” and placed third among the non-Organization of Islamic Cooperation Destinations (non-OIC), according to the Global Muslim Travel Index (GMTI).

It was also placed first in the Muslim-Friendly Accessible Destination (non-OIC) category and second place in the Muslim Women Friendly Destination (non-IOC) category.

According to Hong Kong’s Chief Executive John Lee Ka-chiu, these international accolades fully recognize Hong Kong’s efforts in promoting Halal tourism.

And indeed, it does. The number of Halal-certified restaurants has surged from about 100 at the beginning of 2024 to about 190 today. Additionally, more than 60 hotels, attractions, and convention venues have received the “Crescent Rating” for Muslim-friendly services. Crescent Rating is a Singapore-based organization that researches Halal travel. The service predicts that by 2030, the Muslim traveller expenditure will reach US$235 billion world-wide.

During a trip to the Middle East in February, Lee met Vice-President and Prime Minister of the United Arab Emirates (UAE) and Ruler of Dubai HH Sheikh Mohammed bin Rashid Al Maktoum to discuss bilateral trade arrangements. The trip was so successful that Lee has decided to establish a Hong Kong Economic and Trade Office in Dubai.

He said the UAE is a key partner in China’s Belt and Road Initiative, which has developed several major projects in the Middle East, adding that Hong Kong possesses the necessary supporting facilities for the projects and can provide financing support, as well as any architectural design and related professional services that are required.

The UAE was Hong Kong’s 11th largest trading partner in the world, with bilateral trade exceeding US$135 billion and surpassing all European countries.

As of November 2022, there were 36 companies in Hong Kong representing parent companies located in the UAE, in which four of them are regional headquarters.

Hong Kong has become such an important trading and financial hub for the Arab countries that they have even established their own financial index linked to the Hong Kong Stock Exchange.

Known as the HK Islamic Index (HKII), it was established by the Arab Chamber of Commerce to support Hong Kong's ambitions to develop it into a Shariah-compliant, Islamic banking and financial centre and was the first time a chamber of commerce had taken the initiative to create its own equity index. Reuters, Bloomberg, and Quamnet have been contracted to disseminate the HK Islamic Index. The HKII comprises of 78 companies listed on the Hong Kong Stock Exchange, with 39 each from Hong Kong and mainland China. It has a market capitalization of HK$9,483.4 billion.

Shariah-compliant refers to financial practices and investments that adhere to Islamic law, prohibiting interest and unethical activities while promoting social responsibility. Its investments are governed by the principles of Shariah law, which is derived from the Quran and Hadith. It includes, among other things, prohibition of riba (interest) meaning that the charging or paying interest is strictly forbidden in Shariah-compliant finance. Instead, profit-sharing arrangements are encouraged, where investors share in the profits and losses of their investments.

According to the last 2016 census, Islam is practiced by 4.1 per cent of Hong Kong’s population, or about 300,000 Muslims, of which, 50,000 are Chinese, 150,000 are Indonesians and 30,000 are Pakistanis, with the rest from the Middle East and other parts of the world.

Lee and the Hong Kong Stock Exchange, which has made a couple of trips to the Middle East in recent times can see the value of the Arab countries to Hong Kong in bilaterial relations to boost the Belt and Road Initiative. But more has to be done to instill confidence in trading with Hong Kong.

Lee has suggested increased training with hotel receptionists and waiters learning Arabic as well as those in airline check-in counters. However, if the government is sincere in promoting Arabic language courses, perhaps it can reconsider its policy to provide subsidies to the Continuing Education Fund to reimburse those picking up the language at HKU SPACE as it does with other languages such as English, Japanese, Korean etc.

There have also been suggestions from the Arab Chamber of Commerce that banks could be more Arab-friendly and Chinese Embassies stationed in the Middle East could be more forthcoming in issuing visas to visit Hong Kong.

Mark Pinkstone

** The blog article is the sole responsibility of the author and does not represent the position of our company. **

Hong Kong is facing a dilemma as more locals are spending their dollars outside of the city than what the visitors are bringing in.

Relaxed visa/permit restrictions for locals and foreign residents alike is making it easier for travel to the mainland while inbound traffic crossing the boundary is low budget and spending less on accommodation and food.

Tourism is an important pillar for Hong Kong’s economy. In pre-COVID times, tourism accounted for about four per cent of the territory’s Gross Domestic Product (GDP) and provided for about six per cent of total employment.

In Hong Kong’s heydays, the city saw about 65 million tourists in 2018, of which 51 million came from the mainland. It was boom time for retailers and restaurants. Long queues of mainland shoppers would line the streets along Canton Road and elsewhere waiting to buy luxury items from Gucci, Prada, Tiffany’s and other high-end stores which set up shop in Hong Kong to tap this lucrative market.

Today many restaurants and retail outlets are closing down, especially in the boundary towns of Sheung Shui and Yuen Long. The market is no longer there, and high rental costs make it almost impossible to survive.

During the 2025/2026 festive season, Hong Kong saw a 25.6 per cent rise in inbound trips on New Year’s Day 2026 (664,338 trips), but this was still countered by a massive 515,954 outbound exits on the same day.

Winston Yeung, chair of the Hong Kong Federation of Restaurants & Related Trades, told local media that business was sluggish during the Christmas holiday, with some restaurant owners calling it “the slowest business at Christmas over the past 10 years.”

Unfortunately, the local market is not propping up the tourism outlets. Instead, the locals are traveling in large numbers to Shenzhen and Macau and other parts of China for day trips or extended holidays, thereby providing a leakage in the local economy.

While Hong Kong received more than an estimated 45 million visitors last year, more than about 100 million departures were recorded by the Immigration Department of locals leaving Hong Kong by plane, train or bus mainly to the mainland (75 per cent), and to other major Asian destinations.

Hong Kong has 320 hotels offering 92,907 rooms, according to the Hong Kong Tourism Board. Despite mainlanders’ choice of more budget accommodation, occupancy rates for the hotel industry remained high at 88 per cent last year. The major hotels are not affected by the change in mainlanders’ preferences as they rely more on the affluent international tourist, visiting Hong Kong for business, conventions or holidays.

Property developer, Caldwell Banker Richard Ellis (CBRE) says Hong Kong’s hospitality market currently presents various investment-ready assets including rare investment opportunities for upper upscale and luxury hotels. These high-end properties are particularly attractive due to their resilience, as they are less reliant on Chinese group travelers and enjoy sustained spending power among affluent individual travelers and international visitors. This makes them attractive for investors seeking stable returns in a dynamic market.

To encourage locals to spend more at home and at the same time provide a bonus for tourists, Hong Kong has organised a series of mega events, many held in the new sports stadium on the site of the old Kai Tak airport in Kowloon. Traditional events in 2026 will include the French May Arts festival in March, Hong Kong Book Fair in July, Hong Kong performing Arts Expo in October, the World Snooker Grand Prix in February, and, of course, the international dragon boat races in June.

Blockbusters will include BlackPink World tour in January, the Hong Kong marathon, which draws in runners and their supports from around the world, and the Hong Kong Tennis Open also in January.

That is good for the inbound and outbound tourists alike. But more needs to be done to tip the tourism scales to a surplus for Hong Kong’s economy to grow at a faster pace. As the saying goes charity starts at home, so it is up to us as local residents who have reaped the benefits of the city to spend more in local restaurants and retail outlets than spend it elsewhere. Support local enterprises. After all, the restaurants in Hong Kong are ranked among the best in the world and are tax free as against a value-added tax applied to restaurants and shops in the mainland.