Hong Kong expects tourism to drive further economic growth this year, as GDP rises 2.7% in first quarter

He also expected goods exports to improve further if external demand held up, despite the uncertainties brought about by geopolitical tensions.

But Leung warned of challenges arising from residents’ changing consumption habits even though the government had launched initiatives to improve market sentiment, as he added that wages were also rising.

“However, a longer period of tight financial conditions may affect local economic confidence and activities,” he said, without specifying the financial conditions.

The city has been facing the double whammy of a downturn in the property and stock markets for months, which has hampered the “wealth effect” of residents.

Leung said exports of services continued to grow notably by 8.4 per cent year on year in real terms in the first quarter, with exports of travel services jumping higher thanks to the continued revival of visitor arrivals.

Hong Kong’s economy rebounded by a slower-than-expected 3.2 per cent growth in 2023, following a 3.5 per cent contraction in 2022 from 2021.

In the first three months of this year, Hong Kong’s tourism arrivals jumped 154.3 per cent to 11.22 million, led by growth in mainland Chinese visitors whose arrivals surged 159.1 per cent to 8.69 million. They accounted for 77.4 per cent of total arrivals.

The post-Covid pandemic recovery in tourism continued in April, with visitor numbers jumping 100 per cent to 14.62 million. Seventy six per cent or 11.17 million of them were mainland travellers.

Xia Baolong, the director of the Hong Kong and Macau Affairs Office, had last week urged the Hong Kong government to overhaul its tourism offerings amid “profound changes” in the market and explore every corner of the city as a potential spot to attract visitors.

Following Xia’s comments, Beijing announced the next day it would allow solo travellers from eight more mainland cities to visit Hong Kong.

From May 27, residents from Taiyuan, Hohhot, Harbin, Lhasa, Lanzhou, Xining, Yinchuan, and Urumqi will be able to apply to visit Hong Kong on a solo basis instead of being restricted to tour groups.