Weak Yen Drives Hong Kong Tourists to Japan, Retail Sector Eyes Recovery Through Mainland Visitors

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The weak yen continues to fuel outbound travel from Hong Kong to Japan, with tourism representatives predicting a surge in visitors this year following a record-breaking 36.9 million foreign arrivals in Japan in 2024.

Among these, Hong Kong contributed about 2.7 million visitors, marking a significant increase from 2.1 million in 2023 and 2.3 million pre-pandemic in 2019.

Hongkongers Flock to Japan Amid Cost Advantages

Steve Huen Kwok-chuen, executive director of EGL Tours, highlighted the appeal of the weak yen, which has made shopping and dining in Japan more affordable.

Additionally, the increased capacity of flights between Hong Kong and Japan is expected to further bolster travel.

The upcoming World Expo in Osaka from April to October is also anticipated to attract more visitors. Huen projects a 10% rise in Hong Kong tourists to Japan in 2025, reaching approximately 3 million.

Impact on Local Retail Sector

While the surge in outbound travel has benefited the tourism industry, it has posed challenges for Hong Kong’s retail sector. Lawmaker Peter Shiu Ka-fai, representing the retail industry, acknowledged that increased travel to Japan has affected local consumption. However, he pointed to the resumption of multiple-entry visas for Shenzhen residents as a key factor in mitigating the decline.

Mainland Visitors to Bolster Local Spending

The reintroduction of the visa scheme, which had been suspended for nine years, allows Shenzhen residents to make multiple trips to Hong Kong.

Since its resumption last month, Shenzhen residents have made over 1.04 million trips to Hong Kong, a 22.3% year-on-year increase, according to mainland authorities.

Shiu emphasized that mega-events and the renewed flow of mainland visitors would drive local spending and boost retail sales.

Call for Innovation in Retail and Tourism

Lam Chi-chung, general officer of the Hong Kong Department Stores and Commercial Staff General Union, noted that outbound travel to Japan and mainland China has contributed to sluggish retail sales in Hong Kong.

Retail sales fell for the ninth consecutive month in November 2024, dropping 7.3% year-on-year to HK$31.7 billion (US$4.1 billion).

Lam urged retailers to adopt innovative strategies and called on the government to develop new tourist attractions to enhance Hong Kong’s appeal. He expressed optimism that the retail sector would improve in 2025, driven by mega-events, increased visitation from mainland China, and creative initiatives.

Looking Ahead

As Hong Kong’s tourism and retail sectors navigate the challenges posed by outbound travel, the resumption of multiple-entry visas for mainland visitors offers a glimmer of hope.

With the anticipated economic boost from events and enhanced connectivity, the city aims to strike a balance between encouraging outbound tourism and revitalizing local consumption.