The balancing act of tourism: outbound versus inbound travelers

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.

Mark Pinkstone

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

The move by the Central Government to reprimand the US Consul General in Hong Kong over her interpretation of a recent amendment to National Security Law (NSL) is necessary to correct a misconception that the city is not a safe place to travel.

Last month, Hong Kong’s legislature passed laws empowering the police to demand suspects of a crime to reveal the passwords to their mobile phones and other electronic devices.

But the newly appointed US Consul General Hong Kong Julie Eadeh went a step further and issued a travel advisory warning all Americans that they could be arrested if they failed to release their passwords. She insinuated that Hong Kong is a police state. It is not! In fact, it is one of the safest places in the world to travel.

A government spokesman was quick to respond to erroneous press reports after the legislative motion that under normal circumstances, police officers must have reasonable grounds to suspect that an electronic equipment may contain evidence of an offence endangering national security, and they must apply for a warrant and obtain authorisation from a magistrate before they can search the electronic equipment to obtain relevant criminal evidence in accordance with the warrant. 

Only after being legally authorised to search the equipment can the police require a suspect to provide the password or decryption method of the equipment. Therefore, it is not until legal authorisation to search an electronic equipment has been obtained can the police really require a suspect to provide the password or decryption method of the electronic equipment. 

The spokesman added that there is no case that the police can randomly ask ordinary citizens on the street for their electronic devices (such as their mobile phones) and their password. 

The Berkshire Hathaway Travel Protection agency, which placed Hong Kong 10th as one of the world’s safest places to travel last year, advised travellers to read the US State Department’s travel advisories which currently advises travellers to exercise caution in Hong Kong due to the “arbitrary enforcement of local laws and ongoing restrictions on civil liberties” following the enactment of the National Security Law and the 2024 Safeguarding National Security Ordinance. US citizens are also encouraged to avoid demonstrations, protests and large gathering, as “even peaceful events can escalate and lead to legal consequences.” 

The commissioner of China’s foreign ministry office in Hong Kong, Cui Jianchun, gave Eadeh a slap over the wrist and expressed strong dissatisfaction and firm opposition, urging the US to immediately cease interfering in Hong Kong affairs and China’s internal affairs in any form. 

Of the 70-consular corps in Hong Kong, the US was the only one to purposely misinterpret the amendment to the NSL. It is in the DNA of the US. All other foreign diplomats know exactly what it means because the same proviso applies to their own countries.

Eadeh is a career diplomat having served in Ankara, Doha, Bagdad, Shanghai, Riyadh and Beirut. In Hong Kong she was the consulate’s political director under Gregory May, who has been promoted to US Deputy Chief of Mission in Beijing.

Unlike other consulates in Hong Kong which answer to their embassies in Beijing, the US Consulate General in Hong Kong answers directly to the US State Department run by China hawk and Secretary of State Marco Rubio, who has been quiet on China issues recently due to his distraction in the Middle East.

The US is not in a position to criticise Hong Kong at the moment as it has lost all credibility as a sovereign state. It is a broken country, ostracized by the world’s powers as they scramble to mend the fences dismantled by President Trump and his cronies.

Commissioner Cui will be keeping a watchful eye on Eadeh as she steps her way through Hong Kong, its flooring still holding the shards of broken glass from the 2019-20 riots in which she was complicit. Cui will continue to reprimand her for every indiscretion she makes.